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Social development minister Lindiwe Zulu has withdrawn the controversial green paper on comprehensive social security and retirement reform, without providing reasons.
The green paper was roundly condemned by business, labour, and opposition parties, while National Treasury insisted it was not government policy.
There was also concern that the proposed mandatory social security system would upend the private savings sector, which provides coverage to more than 60% of South Africa’s workforce – all of it voluntary.
The green paper proposed setting up a new National Social Security Fund into which employers and employees would have to pay up to 12% of their earnings, with a ceiling of R276 ?000 per year or R2 760 per month.
The mandatory savings proposal was widely regarded as yet another tax on the middle class that would give more power to the ANC and allow corrupt politicians to tap into the country’s private savings.
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