Alongside the impact of tax on take-home pay, Honourable Members, there are also contributions to pension and provident funds, group life arrangements and medical schemes. Not everyone makes these contributions, and so their benefits are not universally enjoyed.

Our policy commitment is to achieve universal health coverage, and comprehensive social security. These contribute to the broader framework for inclusive growth, decent work, income security and social protection that forms part of the National Development Plan.

These are not straightforward reforms. Health financing is complex, because the demands unavoidably exceed available funds. This is the case even in advanced rich countries. Retirement and social security reform is complex, because existing arrangements create long-term obligations, and the needs of today all too easily crowd out provision for tomorrow.

Yet we must confront these challenges.

Minister Motsoaledi has published the White Paper on National Health Insurance. He has rightly emphasised that public health service delivery improvements must be prioritised, and reform of the private health and medical scheme environment is needed. In order to take the White paper’s proposals forward, the Treasury will shortly release further details on financing aspects.

In taking the comprehensive social security agenda forward, we have to recognise that existing social security arrangements are fragmented, which raises costs and leaves several social needs unaddressed.

Minister Dlamini and I have a shared responsibility for the social security reform programme, which has to draw on both international good practice and interdepartmental work of recent years.

Tighter regulation of the retirement funding industry is part of this reform effort. The intention is to protect members’ interest and ensure that funds are not dissipated by unnecessary administration and financial costs, and that an income in retirement is assured. Our engagements with stakeholders will continue this year.

To support a greater national savings effort, we introduced Tax Free Savings Accounts last year. The response has been most gratifying – about 150 000 accounts have been opened, with savings totalling R1 billion. For those who have not yet taken this opportunity, you have until the end of this month to take advantage of this year’s R30 000 limit for special tax treatment in these accounts.

Let me assure public servants, again, that reform of the retirement system will not affect their accrued pension rights. Indeed, I am pleased to report that the investment portfolio of the Government Employees’ Pension Fund grew by 12.2 per cent to R1.6 trillion in the year to March 2015. GEPF pensioners will receive a 5.3 per cent increase in April this year.

The Revenue Laws Amendment Bill 2016 introduced today gives effect to the decision by Cabinet last week to postpone the annuitisation requirement for provident fund members for two years to allow for further consultation with key stakeholders. The tax benefits will continue to be implemented from 1 March 2016 for all retirement fund contributions, including for provident funds.