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Numsa to strike over tax amendments on retirement funding

Wednesday, 20 January 2016   (0 Comments)
Posted by: Author: Karl Gernetzky
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Author: Karl Gernetzky (BDlive)

The National Union of Metalworkers of SA (Numsa) said on Tuesday it would embark on two days of socioeconomic strikes, demanding that recent tax amendment provisions signed into law by President Jacob Zuma be immediately repealed, and that billions of rand of retirement funds be placed under worker control.

Briefing the media in Johannesburg on Tuesday on issues facing the union and broader worker class, Numsa general secretary Irvin Jim said the prospect of rolling mass action could not be ruled out in what was a "declaration of war" by the African National Congress (ANC).

No date has been set for the strike, which will be based on a section 77 notice from the National Economic Development and Labour Council (Nedlac).

This month, Mr Zuma signed into law changes to tax legislation governing retirement funds. The move sparked outrage by the Congress of South African Trade Unions (Cosatu), which had staunchly opposed the passage of the legislation through Parliament.

Cosatu maintains its members will be prejudiced by the law changes, and has demanded consultation on broader social security reform before any handover of control of their pension.

From March the reforms will simplify the broader retirement regime, ensure less tax on contributions and further ensure preservation of a large portion of retirement savings post-retirement.

Pension, provident and retirement annuity fund members will now be allowed to take one-third of their retirement benefit as a lump sum, and required to take two-thirds of their retirement as an annuity. Those older than 55 years and whose retirements funds were less than R247,500 would not be required to purchase an annuity.

The Treasury, along with ANC MPs, have previously maintained that attempts to consult Cosatu on the reforms and gain their support were extensive, but fruitless. Over months of delays meanwhile, numerous concessions such as raised thresholds were agreed to, while the Treasury had maintained that many younger workers would not feel the effect of the changes for some years.

Numsa is gearing up for another year at odds with Cosatu, but has faced numerous delays in launching a long-expected alternative federation.

Mr Jim said yesterday the establishment of a political party that agitated for the interests of workers was likewise still critical given that the South African Communist Party had been "subsumed" within the tripartite alliance.

The building of United Front would continue while the "socioeconomic" strike would likewise build unity among workers, Numsa said.

"This could end up being a rolling mass action that could be very disruptive to the economy," said Mr Jim, who challenged the ANC to travel around the country to explain the legal changes to workers.

The changes prejudiced those who had plans for their savings, and would be rejected with contempt by those "with a government that has not developed a social security net," he said.

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