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Opinion: What The Financial Experts Think Of This Year’s Budget Speech

General feelings on the Budget:

The market was given scant new information to address three major concerns. Other than reiterating that there would be an extension in the social relief of distress grant for another twelve-month period, the Minister did not indicate how a more formal, permanent arrangement would be structured and how it would be financed. Secondly, with public sector wage negotiations still underway, the Minister merely reiterated the State’s inability to fund any overrun and suggested a reprioritisation of spending or headcount reductions at a departmental level would be necessary to accommodate any above-budget increases in the wage bill. Thirdly, government echoed its “tough love” sentiment towards state-owned enterprises, but this leaves markets concerned about adding to government’s debt burden in the longer term
– Mike Adsetts, Deputy Chief Investment Officer at Momentum Investments

No increase to RAF levy is a grave concern. Its deficit projected to rise from R425bn to R553bn by 2024. We urgently need structural reform here

– Rowan Burger, Head of Client Strategy at Momentum Metropolitan

Although today’s budget is likely to have a neutral effect on South Africa’s sovereign rating, in our view, longer term risks to the growth and fiscal outlook remain. Growth forecasts by the International Monetary Fund suggest, on a growth in per capita comparison, South Africa is likely to underperform the bottom quartile of countries, globally in the medium term

– Mike Adsetts, Deputy Chief Investment Officer at Momentum Investments

Tax-relief for consumers:

Tax-payers can breathe a welcome sigh of relief – however, rising inflation means that they will remain under pressure, and their personal budgets should take this into account

– Ryno de Kock, Head of Financial Planning & Advice at Consult by Momentum

The fact that there are no major personal tax hikes indicates marginally increased cash flow for consumers, allowing for household budgets to potentially be reassessed. Through this marginal tax relief and the R350 social relief grant, consumers are encouraged to review their finances and their household activities to allow for this relief to positively impact them

 Janine Horn, Financial Adviser at Momentum

While there is much-welcomed real personal tax relief in the budget, the burning question is where do cash-strapped, indebted South Africans find money to save? Progressive retirement funds can play a key role in stimulating savings by offering members access to value-added benefits that generate cost savings, which free up money to fuel additional saving

– Nashalin Portrag, Head of FundsAtWork at Momentum Corporate

While there’s no increase in fuel levies, bear in mind that we’re currently seeing fuel prices at a record high, so this is likely to hurt consumer wallets. While our first temptation might be to decrease our savings to accommodate increases in our daily expenses, this can have a detrimental effect on our long-term financial planning, and is not advisable

 Ryno de Kock, Head of Financial Planning & Advice at Consult by Momentum

Personal Income tax and state revenue: Despite the good news on the relief on personal income tax (R5.2bn) individuals still contribute the bulk of state revenue – R587.9bn, followed by VAT (also paid by individuals) of R439.7bn. SA Citizens are still heavily taxed. 

– Hannes van den Berg, CEO at Consult by Momentum

JvT personal income tax relief equates to more or less 40 basis points drop in the repo rate

– Johann van Tonder, Researcher & Economist: Momentum Insights

This year’s Budget windfall:

It is risky to use a windfall created by cyclical changes like a commodity boom to fund a permanent or long-term change, and so the Minister is correct in his approach. We need to treat this surplus as the ‘bonus’ that it is, and use it to start chipping away at our debt, which will ultimately free up more funds for structural reform

– Hannes van den Berg, CEO at Consult by Momentum

The mining tax windfall received has lowered the budget deficit and boosted the country’s near-term fiscal outlook. This, in the medium term could result in lower debt-to-GDP ratio, reduced country’s borrowing needs thereby providing scope for National Treasury to reduce bond issuances. This is positive news for the bond market

– Zisanda GilaSenior Portfolio Manager: Momentum  Investments

Basic Income Grant / social grants:

Momentum economists have listed the country’s high level of poverty and the governments plan to introduce new grants among the main risks to the 2022 fiscus. While tackling inequality is necessary, it will become increasingly challenging considering that SA already spends 3.3% of its GDP on social expenditure. Social grants to 46% of SA citizens! The ruling party is creating a dependency on social grants amongst their voters – as opposed to creating meaningful employment opportunities

– Hannes van den Berg, CEO at Consult by Momentum

Total revenue overrun R66bn, pays for R40bn SRD grant extension. This is a BIG one; socially it is needed but affordability over the outer years is key and depending on where it is set, may lead to future tax increases

– Mike Adsetts, Deputy Chief Investment Officer at Momentum Investments


Momentum supports an inclusive national healthcare system that allows for public/private partnerships that will ensure a successful roll-out, at a pace that makes sense for our economy and without burdening the state unnecessarily

– Damian McHugh, Chief Marketing Officer at Momentum Metropolitan Health


We need to make sure that the landscape that emerges drives behaviour that will lead to the best possible outcome for the individual. Coaching and engagement will be more critical than ever in upskilling members financially and helping them understand what is possible within the boundaries of the proposed legislative framework

Pity the maximum amount deductible to a retirement fund has not been increased with inflation

–  Rowan Burger, Head of Client Strategy at Momentum Metropolitan

The move to umbrella funds, which is being further accelerated by government’s fund consolidation and auto-enrolment retirement reforms, is a positive for SMMEs, which can tap into the economies of scale and innovative product and service offerings available from large commercial umbrella funds

– Nashalin Portrag, Head of FundsAtWork at Momentum Corporate


Job creation is critical but requires a very different approach and mindset from government. The implementation issues are well known, but another key enabler is regulatory alignment

– Mike Adsetts, Deputy Chief Investment Officer at Momentum Investments

Funds allocated to the education system, especially teacher remuneration might help make the profession appealing to new entrants as we need good quality young teachers to close the widening gap in the education space

 Nkosinathi Mahlangu, Portfolio Head of Youth Employment at Momentum Metropolitan