MOST PRODUCTIVE PEOPLE ARE ALSO THE MOST INDEBTED
Research by Consumer Assist had shown that those who earned R15,000 and upward and in the most skills-desirable and labour-productive phases of their lives — from 30 to their mid-40s — were those most seriously in debt.
Additional research by the University of South Africa found the most indebted group earned more than R700,000 a year.
“On Tuesday Sanlam chief economist Jac Laubscher told Parliament’s select committee on finance that taxes were already too high and that government spending would need to be cut.
“He said the tax to GDP [gross domestic product] burden had risen considerably above government benchmarks of 25% to 32 percent and compared to an average of 18% for other middle-income countries,” Snyman said.
HOUSEHOLDS ARE IN DISTRESS
He said this view was supported by the SA Reserve Bank’s recent Financial Stability Review.
The review showed that 8 of 13 indicators signalled households were in distress.
Snyman said household incomes on average had dropped 4.3% and there had been an 8.7% decline in household net wealth.
There had also been a fall of 10.1% in the value of household financial assets.
Household debt was 47.1% of GDP — up from 46.3 percent while total new car sales were down almost a third (29 percent) with the largest drops in commercial vehicles 26% and heavy vehicles — 49%.
“Economists are warning that if you overtax the productive classes they will begin finding it too difficult to increase their businesses which mean job creation will stagnate.
“And too while poorer South Africans burn tyres in the streets to protest, better educated South Africans remain silent but go to the embassies of Australia, Canada and England and look for opportunities elsewhere in countries where tax may be as high, but schools, healthcare and safety better.”
Snyman said he was concerned at the fact that he was increasingly seeing Members of Parliament, corporate executives and professionals sitting in debt counsellors’ offices and weeping ”because they can no longer cope with their financial burdens”.
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