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More unions blast new tax, retirement changes

Jan 17 2016 15:59
Carin Smith

Cape Town -  More unions have joined the Congress of South African Trade Unions (Cosatu) in expressing their displeasure with - and possible strike action against - new tax law amendments signed into law by President Jacob Zuma.

This means all retirement reforms related to tax harmonisation on retirement contributions and benefits will come into effect on March 1 2016.

Cosatu regards the legislation as an offence against all working people, who have their deferred wages to look forward to after retirement.

According to Finance Minister Pravin Gordhan, however, the amendments are about the welfare of workers and encouraging saving in SA economy. He said he is willing to sit around the table with those who have concerns about the new laws.

READ: Govt not taking over people's pensions - presidency

The Food and Allied Workers Union (Fawu) condemns with strongest possible terms the signing into law the Tax Laws Amendment and Tax Administration Acts by President Jacob Zuma, as nothing but the declaration of war against the working people of this country by government.

"As Fawu, we think this is a war we will fight and it is a war that must be won, because failure in reversing the effective application of these acts would amount to defeat of the working class by the state, currently on an aggressive neoliberal policy path and development trajectory," Fawu said in a statement.

"We believe these amendments amount to the undue meddling in what is dear to the employed, particularly low paid workers, being their hard-earned and deferred wages (savings) that should never be controlled by the state."

The union said it holds this view especially because of poverty, persistent income inequality and the 37% unemployment rate, which, in its view, is worsened by the absence of a meaningful and comprehensive social security system and re-distributional fiscal policy.

Fawu undertook to call for a 3-day national strike within two weeks of the implementation of the amendments.

It urged all workers - both in the private and public sectors - to resist resigning their jobs to access retirement savings "as this will give carte blanche and cheap opportunity to employers to embark on largescale restructuring and to lower the standards when employing new crop of workers".

READ: New tax laws will 'poison' Zuma's relationship with workers - Cosatu

The National Union of Mineworkers (NUM) said it is deeply shocked and saddened by Zuma's signing of the tax legislation into law.

"The workers are tired of being undermined and disrespected by this government," NUM said in a statement.

"This is despite the fact that there have been engagements at Nedlac, where organised labour had meaningful participation and submissions made, and requests advanced by them over ten years."

NUM said requests made to government included a comprehensive social security and retirement reforms discussion paper.

"Current and future retirement savings are the only monies that workers have saved and to alter how these deferred salaries will be used - including forced preservation by the government - lacks any democratic consultation process," said NUM.

NUM said the mining  industry is currently faced with massive job losses through retrenchments and the retirement savings are used by workers to support themselves as well as their extended families.

"NUM still has scars over the Fidentia saga, where a lot of blame and accusation were made to the union, even though it had no control over what happens in the running of the retirement funds, as this is the sole function of the fund trustees," the union said.

"NUM does not want to witness the repeat of this painful saga, where members' dependants lost millions of rand."

The union demands that government scrap the act and engage with labour.

The South African State and Allied Workers Union (Sasawu) - with most membership in the public service and government parastatals - views the amendments as a sign that government is "aloof to the people who since 1994 and before have ensured its victory".

"While we appreciate the situation of those who opt for resignation so as to access their hard earned savings and possible hoping to mitigate the challenges of our economy, we want to urge all the working people to remain resolute against all odds and stay put on board," the union said.

The Presidency said in a statement South Africa has had a persistently low savings rate in the last two decades.

"Low savings create a shortage of funds for investments, resulting in South Africa having to rely excessively on volatile short-term capital inflows, which can affect the rand’s purchasing power," said the presidency.

"A low savings rate creates a funding gap for investments – investments are important for economic development and growth."

ALSO READ: Govt explains how new tax updates impact retirement savings

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fawu  |  cosatu  |  jacob zuma  |  tax  |  retirement  |  labour

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