The 2015 budget proposal confirmed that we as a nation are between a rock and a hard place. It was clear that the minister needed to find every smidgeon of revenue (the rock) and try to curb expenditure (the hard place) with very little room to manoeuvre.
The principles followed in the national budget are no different from our own personal budget. Income needs to cover expenses. If you cannot increase income you either borrow more ( not so easy when you are already stretched) or you tackle expenses. So the one big thing we should take from the budget is that we will need to get our own households in order, in the face of the pending tax increases.
The tax scales for the next year have not compensated for inflation so we are all worse off from the start. Add to this the waive if items where taxes were increased, namely:
Petrol Electricity Alchohol Tobacco
Then still to come is the effect of the fuel levy on inflation which is bound to take away the brief respite we were having from the drop in the oil price.
The average South African household is already struggling and income streams for those lucky enough to be employed are limited.
So the one and only thing to do is become our own ‘Minister of Finance’ and make an extraordinary attempt to tackle our expenses and cut the cloth accordingly.
Tough economic times call for tough economic measures. The National Budget has laid down the cards. We need to play them diligently.
Read more from Paul Roelofse at www.investforlife.co.za