Fix potholes before tackling pensions

By Zoubair Ayoob Time of article published Aug 21, 2021

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INCOME tax, VAT, fuel levies, mandatory pensions, taxes on payouts, inheritance and property purchases, toll fees ‒ there is no end to the government’s ingenuity when it comes to squeezing the taxpaying population for money to prop up its failing municipalities, state-owned enterprises and social security network.

Now comes another scheme in the form of a centralised National Social Security Fund, to be managed by a government which has proven itself woefully inept at managing finances.

Money for the fund will, naturally, come from the taxpayer, in the form of contributions of 8% to 12% of income, up to an annual ceiling of R276 000.

According to the proposal put forward, this would be used to provide pensions to formal, informal, and self-employed workers who reach retirement, disability benefits to those physically unable to work, and survivor benefits to dependants should they not live until retirement.

It is not in dispute that this is a necessary and highly desirable initiative, as far too many South Africans are unable to sustain themselves beyond retirement. Along with the proposed basic income grant, it sounds like a decent philanthropic initiative.

However, it is also not in dispute that the government has a poor record in managing public funds and that the taxpayer has little confidence that its contributions will be gainfully spent, and not end up in one or more corrupt officials' pockets.

We need look no further than the VBS scandal and the number of civil servants caught collecting Sassa grants for examples. To ask South Africans to plough more into the bottomless pit of government expenditure before the leaks are plugged is therefore unconscionable.

Already the government is looking to tap pension funds to feed the corruption-riddled SOEs, and is now looking to create another kitty to be raided further in future.

With elections looming, this is another example of the ANC promising to deliver unicorns and asking the country’s few taxpayers to deliver them.

Rather than dreaming up patently unworkable pie-in-the-sky vote-catching proposals, Messrs ANC should rather focus on first getting the basics right.

Fix the potholes before tackling pensions.

The Independent on Saturday

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