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The Congress of South African Trade Unions (COSATU) calls on all South African workers not to resign from their jobs; following the signing into law of the tax reform bill that imposes preservation on their retirement’s savings without consultation. We are issuing a rallying cry to all COSATU members and workers in general to join the federation in its mobilisation efforts for the upcoming campaign to crush this law.

While there is no imminent threat that workers will lose their retirement funds, this law means that workers starting on the 1st of March 2016 , will no longer have a control over their retirement savings. The Estate Tax Clause stipulates that when you die your asserts gets taken over by the state and this law means that workers cannot write their money on their individual wills to be inherited by their adult children. They are literally taking money out of the workers pockets.

Our opposition to this law remains unwavering and we remain determined to implement our federation’s congress resolution, of fighting the National Treasury’s unilateral decision to control and manage workers deferred wages.

The federation is issuing a call to all its affiliates to mobilise workers and their families, to come out and protect their savings and livelihoods. We are determined to wage and win this fight and we call for worker unity around this particular issue. We are busy finalising our application for a Section 77 Notice that will allow us to go on a full blown strike.

Our federation has been very patient on this issue and we believe that the National Treasury’s intransigence signals that the worse is yet to come. We are going to see more laws enacted not only to intervene in workers’ rights but individual citizen’s lives. An overbearing state is dangerous ,especially if it is unilaterally taking decision and undermining democratic institutions like it has done with NEDLAC. The best defence against all this is an assertive and united workforce.

After the Taylor Commission ,that was tasked with conducting research and advising  government on a social security policy reform process issues , released its report in 2002 , it identified critical issues that needed to be addressed as a matter of priority.

The report also made it clear that there was a need for a comprehensive social security system to address those problems. There was clear consensus that any retirement reform without the comprehensive and retirement reform paper will be unacceptable. This law undermines that consensus.

The federation also wants to address the government’s assertion that there were proper consultations during the enactment of this law. We want to put it on record that there was never any proper consultation process over this issue at NEDLAC, which is the only recognized structure for all social partners to discuss issues of this nature.

There was an informal bilateral between the federation and Treasury , where they told us that they were preparing a draft bill to only address the issue of tax harmonization, which was going to benefit provident fund members , who are currently taxed at a much higher rate as compared to pension fund members.

We only discovered during those informal discussions that they had deceitfully smuggled “preservation” in this draft bill and that is when we made it clear that we were opposed to the draft bill.
Tax harmonization had our support ,as the federation, because it was about workers paying low taxes, the same as pensions. To prove that there was never any consultation at NEDLAC, there is no NEDLAC report on this law.

The reality is that workers are not saving enough because they are earning peanuts and are highly indebted. The reason why workers prefer provident funds is because they can withdraw all their money in a lump sum. They are able to pay off their debts and government is criminalising that choice by passing this law and denying them that right to choose.

This law is going to undermine the value of the workers’ savings, whilst securing easy profits for fund managers, who are after profits and are not concerned about the welfare of the workers. This law is now used as a cash cow by the unscrupulous service providers, who are ill advising workers to cash in their money and promise to help them invest it or buy annuities for them, failing to advise them about the tax implication and their brokerage’s massive fees. The law as it stands will destroy all provident finds as we know them

They want poor black workers to subsidise white people because white people live longer that black people and they are the ones , who will benefit the most.
We reiterate our rejection of this piecemeal approach to these social security and retirement reforms and demand a total scrapping of this legislation ,to allow for genuine engagements as agreed at NEDLAC.  We reject the notion that workers, black workers in particular can’t manage their financial affairs. This condescending law is not only an insult to workers but smacks of colonial attitude of saving natives from themselves.

The South African policy development is not for sale. We have serious issues with the foreign or semi-foreign consultants, who have no clue of our labour market and political dynamics but have been allowed to lead government discussions on this very important matter.

The parliamentarians should revisit their  decision to pass this law because they have passed a law that was not discussed at NEDLAC. They have indirectly undermined this democratic institutions and bare guilty of dereliction of duty.

We are ready to sit down with government as soon as they scrap this law. Workers are called to put their differences and sectarian attitudes aside and unite behind the goal of pushing for this law to be scrapped. We are calling on all our unions and workers in general to start mobilizing for the upcoming rolling mass action that will be announced after our upcoming Central Executive Committee meeting.

Workers unite because the power is in your hands!
Hands off worker’s retirement savings  hands off!

Issued by COSATU