Financial instability of SA households an ‘economic time bomb’

2012-04-20 13:19

The results of the Momentum Household Net Wealth Report shows that we’re sitting on an economic time bomb, the Freedom Front Plus has said.

“The FF Plus is especially concerned that the government is currently putting such high tax pressure on households that a critical tipping point may be reached,” party finance spokesperson Conrad Beyers said today.

His warning followed the release yesterday of the Momentum Household Net Wealth Report, which found that half of South African households fell into the “drifting unwell” category.

Beyers said: “This means that the financial position of these households can easily deteriorate if economic circumstances worsen.”

The report found that 30% of households were classified as “drifting well” – which meant they were also unstable and could shift up or down a category quite easily. Beyers said this meant that the financial position of 80% of households ranged from moderately to severely unstable, leading to “an economic time bomb”.

“The government’s socialist ‘tax and spend’ approach holds the single largest threat to households in this danger zone,” he said.

“A financially unstable middle class implies an unstable tax basis and the government should realise how important it is to protect households financially, rather than choking them through taxes.”

The financial pressure government was putting on taxpayers included high fuel taxes, double taxation such as toll fees, and unsustainable social programmes such as social grants. Poor service delivery was another burden.

“Households are forced to incur costs in order to make up for an absence of service delivery for which they pay tax, for example additional costs for household safety due to government not fulfilling that duty,” Beyers said.

The index was compiled for Momentum by Unisa’s Bureau of Market Research and Personal Finance Research Unit. A nationwide survey was conducted among 2 937 South African households in the second half of last year. 

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.