Cape Town - The controversial Green Paper that proposed a compulsory social security tax of up to 12% has been withdrawn for now, but the department of Social Development said it would be back.
Following the national outrage at the plans unveiled less than two weeks ago, Social Development Minster Lindiwe Zulu on Monday night withdrew the Green Paper to much relief.
Department spokesperson Lumka Oliphant said in a statement on Wednesday that the decision to withdraw the Green Paper was taken so as to allow the department to provide better clarity on some of the matters included in the paper.
“By virtue of this being a discussion paper, the department is pleased by the level of public discourse on this subject matter, as it reinforces the fact that society should be involved in the policy-making space.
“The department expects to release the paper as soon as these issues have been addressed,” said Oliphant.
Non-profit civil rights body, the Organisation Undoing Tax Abuse (Outa), said they hoped that the minister had recognised her mistake of not consulting more widely when it came to introducing such policies.
Outa’s chief executive, Wayne Duvenage, said: “Outa does recognise that, unfortunately, we have a low savings rate in South Africa, which leaves many people unable to survive with dignity in their retirement years.
“This in turn adds more pressure to the state’s ability to provide for citizens. Thus, while the state’s intention with this fund appears to be noble, in that it will force people to save and assist with more relief in other situations of need, the reality is that there are far too many questions with this complex issue.”
Cosatu provincial secretary Malvern De Bruyn said: “From the beginning there were mixed reactions and the majority reactions were opposing the document.
“We expect that they will maybe work on fine-tuning the document and reissue it again this time ensuring that all parties are consulted prior to making that decision.”
Political science lecturer Ntsikelelo Breakfast said: “One of the hallmarks of democracy is public participation in policy making. If you are introducing such measures, you must take public views into account.”
Economist Dawie Roodt said: “The main reason she (the minister) withdrew it, is she must have been rapped over the knuckles by her colleagues. I know that Nedlac was unhappy because while the subject of such a fund has been discussed for years, they hadn’t agreed to any such Green Paper.”
Political analyst Ralph Mathegka said: “I think the opposition to the Green Paper had a lot to do with the public’s legitimate fear of the government wanting to extract more tax and have more and more responsibility with regards to managing money while it cannot properly manage budgets.”
Policy advisor and member of the social security standing committee of the Association for Savings and Investment South Africa (Asisa), Stephen Smith, said: “While the Green Paper has been withdrawn, it did open the door for public dialogue on a number of critical topics and we hope that this continues with urgency.”