‘Careful thought must be given before withdrawing from two-pot’

Finance Minister Enoch Godongwana says he would advise people not to withdraw with ease from their pension when the two-pot system becomes effective from next week.

Godongwana was speaking on the sidelines of the nineth annual meeting of the New Development Bank that kicks off in Cape Town on Friday. The Bank was formed in 2015.

“If you ask me, I will not encourage anybody to jump for it with ease. People must think carefully because this is their future savings. So, it’s not an emergency.”

And he also appears to be unfazed about those complaining about taxing the withdrawals, making an example that he even taxes tips of waiters.

“Any tip that goes through a credit card, I treat it as an additional income and they pay it why would the people for some reason decide to take their savings earlier that is required not pay a tax on it as additional income.”

Summit

Eight countries will gather for the Summit over the weekend. As they aim to mobilize resources for infrastructure and sustainable development projects for emerging markets and developing countries.

The countries include Brazil, Russia, India, China, South Africa, Bangladesh, United Arab Emirates and Egypt.

Godongwana, who is one of the governors of the bank, says South Africa has already benefitted from the institution, funding infrastructure projects.

“We are aggressive for instance for upgrading our grid looking at new capacity for generation. We think we’ll be utilizing sources from this bank and a clear for example the minister from Lesotho will be here to sign funding for the hydro project in Lesotho. Because they are not a member but the beneficiaries of that project are members like South Africa, we’ve been able to persuade the bank to fund that project as well,” says Godongwana.

National Treasury is also tallying the costs for infrastructure projects that are in the pipeline.

“It’s massive. I mean if you look at the thousands, 14 000 kilometres of transmission grid alone that massive let alone roads infrastructure, the water infrastructure which we are preparing to fund. We’ll be able to on the 30th of October to kind of give an indication in the Medium-Term Budget Policy Statement on these issues,” Godongwana added.

The Summit will focus on energy and financing infrastructure development.

Former Brazilian President and now President bank, Dilma Rousseff, is expected to officially open this Summit on Friday.