Parliament – MPs on Tuesday passed legislation which allows for contested provisions of the Taxation Laws Amendment Act to be deferred for two years.
The Revenue Laws Amendment Bill was approved in the National Assembly despite objections from the Democratic Alliance. It allows that provisions in the new law limiting direct access to retirement savings, a provision that was meant to come into effect on March 1, be postponed for two years while government conducts further consultation with those opposed to it, most notably ruling party alliance partner Cosatu (Congress of South African Trade Unions).
Finance Minister Pravin Gordhan said the consultations were necessary to find consensus.
“We would prefer from government’s point of view consensus on this matter rather than an adversarial approach to this question,” Gordhan told MPs.
But, the minister insisted that Cosatu was consulted, despite the union making claims to the contrary.
“Consultation did take place…but let’s allow for a further period if that’s what’s actually required at this point in time,” he said.
Gordhan said already a campaign had been launched to inform workers how they could “balance the requirement for savings and the requirement for expenditure either at a day to day level or for unusual events.”
Unions have complained that the new provisions of the taxation law would make it impossible for workers to access their provident funds should they encounter unintended events which required money.
Gordhan denied allegations that it was part of a government plan to nationalise workers’ pensions.
The bill was passed despite objections from the Democratic Alliance. DA MP David Maynier called the postponement of the provisions regarding the annuitisation of provident funds a “political equivalent of a foot massage” for Cosatu.
“As usual the ANC government shivered and caved to Cosatu demands and within two weeks tabled this bill in Parliament,” said Maynier.
“It proves who really calls the shots when it come to economic policy within the ANC/SACP/Cosatu alliance.”