Johann van Tonder - Economist for Group Strategy: Momentum Metropolitan‍

The government is back to being a going concern – which is good news. The revenue exceeded non-interest expenditure and it was able to provide personal income tax relief to consumers as well as incentives for consumers to purchase solar panels. This is almost R20bn back into the pockets of South Africans – and this is not to mention the transfer duty relief. He also addressed Eskom’s debt problem by government agreeing to take on 60% of Eskom’s debt, on condition that the SOE doesn’t borrow any additional funds and that they don’t grant salary increases that will be detrimental to Eskom’s financial position.

Overall = The Minister dealt very well with the Eskom situation.

Hannes van den Berg: CEO: Consult by Momentum‍

On the energy support packages – the overall intention is welcomed. The support package for business was very pleasing, while the support package for individuals was somewhat lacking. I found the maximum deduction of R15K to be too low. If you look at the real cost – it is much more than R15K, and it also doesn’t look like inverters or generators have been provided for, which is a real solution for many South Africans.

I am also very concerned about what seems to be an imminent grey listing. The minister’s closing comments implied that this would soon be a reality, which will make offshore investment far more challenging for South Africans. In addition, it will place a massive administrative burden on the financial services sector.

Rowan Burger - Head of Strategic Finance: Momentum Metropolitan ‍

I found today’s Budget disappointing from a retirement reform perspective as we didn’t get the detail we need to ensure that we can land the two-pot system efficiently come 1 March 2024. As a result, I expect that many stakeholders will argue for an extension to 1 March 2025.

An increase in the tax-free amount at retirement to R550K is welcomed, however I would like to have seen the contribution deductibility cap increase by a similar margin.

There also wasn’t much detail on the improvement to the social security funds - especially in addressing the deficit in the Road Accident Fund, by reducing the cost of the legal process in resolving claims and increasing road levies to improve the projected deficit of R350bn. To put this into perspective, the SRD grant costs one-tenth of that – to offer some sense of its scale.

On the SRD grant, it will apply for one more year only, and the long-term unaffordability of this benefit has been highlighted.

Nkosinathi Mahlangu - Portfolio Head of Youth Employment: Momentum Metropolitan ‍

The Budget left me feeling hopeful. What caught my attention was the skills emigration review – this will help us take stock of the existing skills potential in the country, and we don’t find ourselves importing skills that could be readily found here – especially when youth unemployment is so high. As a developing country, our infrastructure development could be a catalyst in creating job opportunities, as there are projects lined up where we could potentially partner with SMEs and utilise those skills already in our country. On the social relief of distress grant – it is good to know that there is budget provision for those in need, but we need to plan with a clear exit in mind. What happens after the extension? How can we redirect funds into something that can bridge the unemployment gap and service the Not in Employment, Education or Training (NEET) group?

Damian McHugh – CMO: Momentum Metropolitan Health ‍

While NHI was not detailed in this year’s Budget, using health to unlock wealth is key for individuals, as well as the country. Momentum Metropolitan Health believes that over time, the public & private sectors can work together to deliver affordable universal healthcare. In the interim (& while NHI is being finalised), we can alleviate the burden on the state by covering more employed South Africans on private solutions. This will reduce public health expenditure & these funds can be redirected to other critical areas of our economy. Private solutions also generally include incentives to encourage people to get & stay healthy, which helps bolster the economy by improving productivity. Healthier people = healthier economy.

Janine Horn - Financial Adviser at Momentum

What stood out for me in the budget was the minister’s increase in the retirement tax lumpsum hoping to encourage South Africans to save more for retirement. Also, the energy incentive many businesses business clients and entrepreneurs are battling with load shedding. This shows that the government is willing to assist. The fact that medical tax credit is the only one that was increased. This should increase by 10% and not 4,9% because true consumer inflation is way more than 4,9%. Lastly, the bit about eradicating poverty stands out for me because it gives hope to the inequality of the country and the youth. What is profoundly very clear is having a professional assisting you with your money plans is key. Structure, goals and knowing what your rights are according to the NCA are very important.

Bertie Nel - Head: Financial Planning and Advice at Momentum

A big positive is the efficiency of tax collection. The concern is the discipline needed to efficiently spend that money. The question to ask how sustainable is the revenue we are collecting. I feel that if you can get the efficiency levels up you can have funds to spend on essentials in future.

This in turn gives leeway to not have to increase consumer taxes. This will give consumers in an already pressured environment (interest rates, food, electricity) some relief as they won’t have to pay additional taxes.

My advice: It is critical to partner with somebody to guide you through these complexities. Consumers are already heavily indebted and saving less for retirement. This can cause a lot of dependence on family members and communities in the future, only 6% can retire at the moment so it is critical to partner with a financial adviser to guide you through the restructuring and planning for your financial future. ‍

Jeffrey Wiseman - CEO at Momentum Trust

Good News

• The good news is that most of the tax changes came about in the form of tax relief. From an estate planning point of view, no changes were announced to things like estate duty or capital gains tax, which are normally associated with wealthy individuals who use the existing structures to plan their estates. The fine print indicates that SARS is looking more carefully into some of the legislation loopholes that are open to exploitation. There are going to be measures to tighten up some of the identified provision, which will include minor changes to low-interest and interest-free loans to certain trusts and some changes to the taxation of the distribution of income from trusts to non-resident beneficiaries. These are some of the things we can look out for from an estate planning perspective.

Downside

• One would have hoped for more generous incentives for the individual to implement solar solutions at home. Also, without saying so, the minister alluded to the fact that we should prepare for a greylisting on Friday, which will make it more difficult for South Africans to deal with international institutions.

Rob Southey - Head: Investment Advisory at Momentum Corporate

I found the budget disappointing as there was no further detail given on the two-pot system. We were hoping to get more information and detail to make sure that we meet the deadline which is looming. We don’t have much more insight than we had this morning as the processes and infrastructure around the administration of this system is complex.

The R900 billion investment into water and transport infrastructure is positive but, we will see where the partial funding comes from retirement funds.

Another positive is the 13 billion tax relief for businesses which is supportive of companies enabling them to survive