<strong>By: Kenosi Magosha, Head of Client Solutions Savings at Sanlam Personal Finance</strong>

Finance Minister Tito Mboweni yesterday said, “We are masters of our own destiny”, as he outlined a number of fiscal prudence measures aimed at assisting SA’s economic recovery. For the South African consumer there is a mix of good and bad news. The bad news is that all South Africans with income above the slightly increased tax threshold will be paying more tax – implying less disposable income - as no inflationary adjustments were made to the tax brackets. There were also no upward adjustments of medical expense tax credits or deductions such as retirement contributions. The minister has put a damper to sundowners, with an apology, by increasing sin taxes on alcohol and on other substances which aligns with the tough stance the president took in his SONA.

There is some good news too as the Minister carefully considered stabilising the cost of fuel by proposing lower increases in fuel and RAF levies although consumers may need to consider car-pooling with the introduction of the carbon tax in June 2019. For investors, incentives are still in place as dividend tax and capital gains tax were left unchanged.

The country’s most vulnerable will benefit from zero-rating of some goods and the much-needed increase, in real terms, of old age, disability, war veterans and care dependency grants, with the increase in foster care grant and child support grant aimed at assisting the young.

Eskom will be able to keep its and our lights on without any additional direct cost to the consumer and non-core assets may be sold to raise revenue for entities critical for driving economic growth. The reconfiguration of Eskom may also help with reducing long term cost of energy as part of the key consideration was to increase competition in the energy sector.

With South Africa’s property market being unattainable for most South Africans, the first-time homebuyer subsidy is an exciting development and the pilot will be eagerly monitored for its success in getting more people into the property market.

A key focus on creating opportunity to address unemployment for South Africans was highlighted in the speech with increased incentives to promote youth employment, reduction of data costs to help with access to information and opportunity and allocation of R112.2 billion funding to education –to enable economic growth and participation of low-middle income households.

Just as Minister Mboweni says, the Budget is about our long-term vision, so too should South Africans look to the long-term benefits of the careful money decisions they make now.