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Listen: Unpacking the national budget: where your taxes really go

Feb 23, 2024

Every year, the announcement of the national budget grips the attention of ordinary South Africans and experts alike. But what does it really mean for you and me? In this latest episode of the My Money, My Lifestyle podcast, we cut through the jargon to bring clarity to the two trillion rand puzzle that is the national budget.

Maya is joined by Mr. Edgar Sishi, deputy director general of National Treasury and head of the budget office at National Treasury. Together, they delve into the intricacies of government spending, taxation, and economic planning.

The national budget is more than just big numbers; it’s about the choices that impact every facet of our lives. From the social wage that allocates funds to health, education, and social grants, to the daunting debt-servicing costs that eclipse spending on these vital services, every rand counts.

But how does the government decide where to allocate funds amidst a myriad of competing interests and opinions? Mr. Sishi sheds light on the data-driven and objective-focused approach that guides these decisions.

Taxation is another area that directly affects our pockets. We discuss the concept of fiscal drag and how, without relief, taxpayers can end up paying significantly more due to inflation. We look at wealth taxes and ask whether South Africa has reached its tax threshold.

With the government’s commitment to transparency and the need for informed choices, understanding taxation is essential for every South African.

Debt is a word that often carries negative connotations, and for good reason. The episode unpacks the national debt situation, comparing it to personal finance scenarios that are all too familiar. Mr. Sishi’s explanation of the government’s strategy to stabilise and eventually reduce debt is not just informative but reassuring, emphasizing the importance of intergenerational fairness and responsible fiscal management.

But it’s not all about austerity. The social wage and the continuation of the social relief of distress grant highlight the government’s commitment to supporting the most vulnerable in society. We explore the balance between social responsibility and economic sustainability, encouraging listeners to consider the broader implications of government spending.

This episode is a must-listen for anyone interested in the financial future of South Africa. Whether you’re a concerned citizen, a finance enthusiast, or simply someone who wants to make sense of where your taxes are going, tune in to gain valuable insights from the experts. Listen now, and take the first step towards understanding the trillion rand question.

📋 Episode Chapters

  • (00:00) Maya Fisher French: Welcome to the My Money, My Lifestyle podcast
  • (00:52) The government plans on spending 2.37 trillion rand over the next financial year
  • (02:54) Mr. Edgar Sishi is deputy director general at National Treasury
  • (04:43) At National Treasury, there are many differing opinions about how to run the budget
  • (09:25) South Africa’s debt as a percentage of GDP is higher than the average for emerging markets
  • (13:07) Taxation is a huge consideration when National Treasury is preparing the national budget
  • (20:58) There is no bracket-creep relief in this budget
  • (25:18) Six out of every ten rand collected in taxes is spent on social services
  • (30:15) The South African Reserve Bank is taking money from its contingency reserve account (GFECRA)
  • (36:11) On 1 April 2024, the corporation for deposit insurance comes into effect
  • (38:02) The future of tax-free savings accounts

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Maya Fisher-French author of Money Questions Answered

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