Cosatu challenges ruling party on retirement savings
THE Congress of South African Trade Unions (Cosatu) yesterday warned the African National Congress (ANC) that its members are unlikely to support or vote for the party in next year’s local government elections, should Parliament pass an amendment bill restricting direct access to retirement savings.
The federation said it was preparing a campaign against the Treasury and a less intense electoral campaign for the ANC should changes to pension laws proceed despite worker opposition.
The National Assembly is expected to pass the Taxation Laws Amendment Bill this week, to be followed by approval in the National Council of Provinces.
Among the key provisions in the bill is a requirement that two-thirds of any provident fund be used to buy an annuity, which Cosatu describes as an attempt to coerce its members to save.
“We want to warn the ANC that this will have severe consequences, because workers will not campaign or vote for the movement if they feel that its government is on the offensive against them,” the federation said in a statement. Cosatu will consider a “battle plan” against the Treasury at its national elective congress this month, it said.
It accused the Treasury of bypassing the National Economic Development and Labour Council and going to Parliament. Cosatu wants comprehensive social security considered before such amendments are effected.
Tinkering with existing social security rules may work in Sweden, which has comprehensive social welfare, but in SA, where such savings could mean the difference between losing and keeping your home, such changes would create turmoil, said Cosatu’s parliamentary representative, Matthew Parks. “It is therefore a very different thing (in SA) if you come at these things so bluntly.”
The ANC yesterday requested a copy of Cosatu’s statement, and had not commented at the time of going to print.
The Federation of Unions of SA supported the bill in its current format, with its general secretary Dennis George saying it was long overdue. He said the bill did protect members’ interests, although the discussion on comprehensive social security also needed to happen.
The Treasury said yesterday it would appear before the parliamentary committee today to give feedback in line with the requirement for public comment. Amendments were up to Parliament, but the Treasury would continue to engage with Cosatu and others to improve SA’s retirement system.