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Faizel Patel – 25/08/2021
The deputy editor of Business Day says the Green Paper has huge implications because it demands money from the country’s fiscus to subsidise certain sections of the poor.
Carol Paton was speaking to Radio Islam about the government’s new plan to implement a mandatory pension and insurance system that will see employers and employees paying up to 12% of their earnings into a state-run national social security fund.
The green paper proposal which is now open for public comment until December is outlined in the Comprehensive social security and retirement reform document.
Paton says the implications of the green paper has far reaching consequences.
“It also has huge implications for the taxes and also for the retirement industry. The retirement industry and the savings that people make is what the government uses to borrow and run itself on a day to day basis, so there are huge implications.”
Paton says Social Development Minister Lindiwe Zulu did not take the proposal to cabinet.
“Why she did that, I’ve got no idea. I really don’t know if it was a factional thing or it was just her feeling, her officials feeling where ‘we’ve had enough discussion on this now, let’s put it out. We’ve got KPA’s, performance agreements in place and we need to achieve these things so let’s just put it out.’ That may have been the case.”
Paton says the decision perpetuates the perception that cabinet may be a house that is divided.
“Under the Jacob Zuma Foundation administration, what we had was a cabinet in which everyone just did their own thing. They weren’t ready enough, didn’t really function as a collective and everybody was out just to pursue their thing and to see what they could get out of it for themselves personally. That sort of working as individuals just pursuing your own agenda has not changed in the Cyril Ramaphosa cabinet and that really does need to change if we are going to have a government that works optimally.”
The Congress of South African of Trade Unions (Cosatu) meanwhile said it is in favour of the idea of a mandatory pension and insurance system but warns that some of the proposals would be “unworkable” for the federation.
Listen to the interview with Carol Paton
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