The Congress of South African Trade Union (Cosatu) has expressed its satisfaction that the South African government has been forced to postpone the implementation of tax laws of the Pension Fund. Cosatu Western Cape’s Mike Louw says it is a victory and as a result it will be cancelling plans for protests.
The trade federation said it was pleased that the state had attended to their demands by cancelling the Tax and Pension Fund reform.
The law anticipated to commence on 1 March 2016 will be postponed for two years to March 2018, a decision taken at Wednesday’s Cabinet meeing.
Parties involved were given two years to liaise to negotiate an outcome.
In a statement, Cosatu expressed its dissatisfaction with the reforms, saying it would be taking away workers’ right to choose whether to withdraw their retirement savings as lump sums, by limiting them to only a third while two-thirds had to be invested in annuities.
“The law encourage a culture of saving among workers, but workers had very little to save,” says Louw.
Finance Minister Pravin Gordhan appealed to Cosatu not to continue with its mass action. The minister warned that if the reforms were completely scrapped, it would mean that employees would not benefit from new tax benefits contained in the law. In a statement he said that confusion on the effects nationalisation of savings led to the job losses of many labourers.
“Thousands of workers resigned from their jobs in fear that their savings would be nationalised. It was due to this confusion that the government had decided to hold back on some of the changes,” says Gordhan.
However Louw says that the party will be perusing further action to have all its demands adhered to.
“Further action to have all our demands exceeded to will be planned but for now our protest scheduled to take place on 21 February has been cancelled,” says Louw.
The union said the decision was just an election ploy by the ANC. VOC (Nailah Cornelissen)