26 Feb 2022 Budget speech, how it affects you
South Africa has been experiencing an economic drought for the past two years. As the pandemic looms over us, we are still taking strain in terms of unimaginable debt. With the passing of the latest budget speech, bad news lingers with a few dollops of some positivity to all consumers in SA.
Although hope may be burning bright, the current debt situation South Africa finds itself in is shockingly appalling. Debt has reached a figure of R4.3 trillion -and is expected to reach a monumental amount of R5.4 trillion. Although incredibly high revenue was accumulated from personal tax and the mining boom, our economy has a long way to go before we can ease our concerns.
State-owned entities, such as Eskom, have been forced to contribute towards paying off debt. In finance minister Enoch’s own words: “We spent more time on Eskom than fixing electricity supply. There’s a difference between the two. I don’t care who brings the electricity.” Enoch disclosed that R290 Billion has been paid into Eskom since 2013, yet seeing minimal improvement has led to Enoch clamping down on the company’s shortcomings. It is a small, yet, noble effort towards alleviating the ongoing corruption here in SA.
Now that this has been implemented, resources can be poured back into infrastructure and frontline services. After discussing all of these good and bad points, let us talk about the price hikes that we currently face.
Due to tax brackets being pushed downwards, income tax will become payable from R7,679.00
This means that consumers earning this income or more will be subject to paying income tax.
The raising of Sin tax for both alcohol and tobacco is expected to be detrimental to all that are reliant or consume these substances regularly. This can lead to some major psychological side effects amongst those dealing with debt-related issues.
In essence, the price of every product on the market will be going up. Luxuries, staple foods, electricity/fuel and even imports will be raised in price. This affects consumers who are already financially stable in a noticeable manner. Those that are struggling will be undoubtedly forced to make sacrifices to avoid falling behind on payments.
So, what does this mean for consumers who are already struggling with debt and looking to get out of the debt trap?
Although it might sound hopeless at first, reaching out to a trustworthy debt counsellor might just be your best bet.
For now, there are a few things you can do as a consumer battling debt-related issues.
By assessing your expenditure, from luxuries to necessities, you can already see where you can cut some corners. Try and pay off that dental bill and then celebrate with your favourite bottle of scotch. Perhaps try limiting your tobacco consumption or even try cutting down on those terrible, yet, tantalisingly addictive sugary treats.
Despite the budget speech spreading many facets of hope and despair, it is never too late to get yourself back to a place of financial freedom.
If you find yourself overwhelmed or perhaps unsure as to how you can change your situation – Debtco Group will be more than happy to assist. With our team of knowledgeable debt counsellors, we can pull you from the depths of debt and into the light of financial freedom. If you have any further questions as to how we can make a change, contact us today.