MINISTER of Finance Pravin Gordhan will probably be remembered for the strong angle he took during his Fiscal Year 2017/2018 address, most commonly known as the Budget Speech 2017. He indicated that there are tough times ahead for super-earners – those who earn more than R1.5 million per year. Although Gordhan’s economic transformation theme: “Those who earn more will pay more” is doing the rounds, working class consumers are not going to find actual relief for their pockets.
According to Wikus Olivier, debt management expert at DebtSafe, there is no relief from fiscal drag:
• If you are a working class consumer your salary can get a boost but your ‘buying power’ is going to dip.
• Although inflation is staying the same, taxes are increasing, which means you’ll get less bang for your buck.
• Debt-stressed consumers with a household debt ratio that is pretty high can fall even further into debt.
• With the additional strain on their household income, over-indebted consumers might be pressured to look for options like debt review to get rid of their spiralling debt.
Gordhan’s message may make him a modern-day Robin Hood to some, but if you look at the facts behind what was said, our general South African population will also be hit by some tough financial realities.
Also Read:
Infograph: 5 things you need to know about the Budget Speech
Video: The 2017 Budget Speech explained
Highlights from the 2017 Budget Speech
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