Hilary Joffe
1 December 2008
Johannesburg — THE government might have to look at implementing its planned new social security system on a "more modest" scale because of the world financial crisis, says Social Development Minister Zola Skweyiya.
But he still hopes he can release details of the new scheme before next year's elections, and promises that the government and the African National Congress (ANC) will not make decisions on their own, but will consult with labour and business through Nedlac.
Former president Thabo Mbeki announced plans in last year's state of the nation address for a social security system that would make it compulsory for all working people to save a proportion of their income for retirement. It would guarantee that everyone got at least a minimum monthly pension and was entitled to death and disability benefits.
The treasury released a document outlining the proposals, and more details were promised this year. But decisions have been held up by differences between the social development department and the treasury on the design of the new scheme, as well as by the complexities involved in a system that could entail sweeping changes to SA's extensive private pension and provident fund industry. Plans to include a new national health insurance scheme, in line with ANC Polokwane conference resolutions, have further complicated the process and added to the potential cost.
Though Mbeki said last year the new system would be implemented from 2010, social development and treasury officials said earlier this year that the government was unlikely to meet the 2010 deadline. But in an interview with Business Day last week, Skweyiya said that all the proposals were there, at least from the social development and labour departments.
"We are now perfecting plans for health insurance, which we are doing with the ANC so it can be included in the election manifesto, and we hope to be able to make it public in a few weeks' times," Skweyiya said.
He sits on an interministerial task team on the proposed social security system, along with the finance, labour and health ministers. He would not comment on what the differences of opinion were, but said they were being ironed out and the process was advanced enough to make decisions.
But Skweyiya said the ANC did not want to be seen taking unilateral decisions. The government and ANC would not do anything without consulting trade unions and the private sector.
He also declined to say what implementing the system on a more modest scale might entail. This would have to be discussed. It has been suggested, however, that the government could start with a default savings scheme that would cover people not already covered by existing private schemes, especially those working for smaller employers with no private retirement or benefit funds for employees.
Skweyiya has long been a supporter of the basic income grant, and he said he had "no problem" with it, but faced with the financial crisis he doubted SA could afford it.
Skweyiya also offered little comment on the proposal for a new social security department that came out of the recent alliance economic summit, though he did say he would support it in that social development had tended to concentrate on social grants rather than on broader welfare issues.
The social grants system has been hugely expanded in the past few years, with 12,6-million people, including more than 8-million children, now getting grants.
Numbers will increase further in coming years as the government phases in the maximum age for the child support grant from 14 up to 18 -- children up to age 15 will be entitled to it from January -- and equalises the pensionable age (for the state old age pension) between men and women .
Speaking of the Congress of the People (COPE), Skweyiya, who came in at number three on the ANC's national executive committee list at the party's Polokwane conference in December, said he did not believe the new party could get more than 10% of the vote.
There was shock when these comrades left the ANC, but "it was one of those things we should have calculated on".
The ANC had failed to manage conditions created by the black empowerment policies after 1994. COPE, he said, was speaking for that group of people who had become rich "and think they are entitled to be leaders because they are rich".
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