The budget speech delivered this week may well have been left to:

The old woman who lived in a shoe

Who had so many children She didn’t know what to do.

She gave them some broth without any bread.

And whipped them all soundly and put them to bed.

Whipped financially we all are with the tax scales, medical credits and tax thresholds all left unchanged for the next tax year which simply means we all will be poorer.

Here are three reason why:

1. Inflation Impact: The government’s decision to maintain last year’s tax scales and credits in 2025 without adjusting for inflation puts a burden on South African households. This means that the fiscal drag has not been adjusted to account for the rising prices and increased cost of living over the past year.

2. Financial Pressure: As a result of the stagnant tax rates and credits, households may find themselves with less purchasing power as their incomes are effectively being taxed at the same rates which are not adjusted to compensate for inflation. This will lead to financial strain, making it harder for families to cover their expenses and save for the future.

3. Budgeting Challenges: South African families need to be aware of the impact of unchanged tax scales and credits on their budgets. It is important for households to adjust their financial plans, prioritise spending, and seek ways to cope with the increased cost of living to ensure their financial well-being in the face of these economic challenges.

So the children in the shoe will be left with nothing more this year. Just have to do with the little they have.

A recent article in The Sunday Tribune cautioned readers to be aware of financial red flags that could affect relationships. 

Healthy relationships are based on trust and confidence in each other. This includes being transparent and responsible with financial matters. Working openly towards financial goals, keeping sound financial behaviours encourages great partnerships. There are signs and behaviours which raise red flags between couples. If ignored these can ruin a relationship:

Minimal discussion over money matters

 If a partner refuses to discuss money matters, it may mean that they are hiding something and do not want the other partner to know something about their financial situation. This raises questions which creates doubt, fear or worry which negatively impacts on the relationship. 

Ongoing financial woes

If a partner has ongoing financial troubles such as large amounts of debt, low credit scores, or overspending, it can lead to financial stress in the relationship.

Having an unstable financial track record affects creditworthiness which makes in difficult to get credit on the important things such as a home loan or car finance. 

Reckless spending

Spending without considering your affordability can only stress out a partnership. Ignoring expenses relative to income points to financial distress and uncertainty. 

Fly now pay later…… I want it because I deserve it….. We’ll worry about it later……

are symptoms of not being able to delay gratification. Being spontaneous and having no concern over affordability creates potential financial problems down the road which will harm partnerships. 

So It’s imperative for partners to be open and honest about their financial situations at all times. If they work together openly they can create a synergy which will only improve their relationship. 

In South Africa, retirement annuities have traditionally been regarded as inalienable assets, meaning that creditors typically cannot access them. This protection was established to safeguard individuals’ retirement savings from being depleted by external financial obligations. However, there are exceptions to this rule, particularly in cases of death, disability, and divorce prior to retirement.

Doors open to include child support

One recent court ruling has brought attention to a further exception regarding the accessibility of retirement annuities. In the case of maintenance for children, a court ordered Discovery, a major financial institution, to release funds from a retirement annuity to fulfill the obligation of child support. This ruling signifies a departure from the general principle of inalienability, highlighting the paramount importance of providing for the welfare of dependent children.

Balancing retirement funding with child dependency

While the specifics of the ruling may vary, it underscores the judiciary’s recognition of the critical need to prioritize the financial well-being of children, even at the expense of protecting retirement savings. This decision reflects a balance between protecting individuals’ long-term financial security and ensuring that dependents receive necessary support.

Revision of retirement planning needed

It’s essential for individuals to understand the implications of such rulings on their financial planning, particularly concerning retirement savings and potential obligations to dependents. Seeking legal and financial advice can help individuals navigate these complex matters and make informed decisions regarding their retirement planning and family responsibilities.

In South Africa, the tax benefits of installing solar panels in your home include a specific deduction offered by the South African Revenue Service (SARS). Homeowners who invest in solar panels may qualify for a deduction of 25% of the cost of the panels, up to a maximum of R15,000. It’s important to note that the installation must be made in the current tax year ending February 2024 to qualify for this deduction.

There are limits

This means that if the total cost of the panels is R60,000, the homeowner can claim a deduction of R15,000 from their taxable income, provided that the installation was completed before the end of the current tax year. If the panels cost, say, R40 000, then the deduction will be R10 000. It’s essential for homeowners to keep detailed records of the installation and expenses related to the solar panels to substantiate the tax deductions claimed.

Other components do not qualify

It’s important to note that the deduction only applies to the cost of the panels themselves and does not include other components of the installation, such as batteries, inverters, or labor expenses.

You cannot DYI

Furthermore, the installation must be carried out by accredited installers, and the equipment must meet specific standards set by relevant authorities to qualify for the deduction.

Incentive for some

By offering this tax incentive, the South African government aims to encourage the adoption of renewable energy sources, such as solar power, and to promote sustainable and environmentally friendly practices. The deduction on solar panels serves as a financial incentive for homeowners to invest in solar energy, contributing to the country’s efforts to reduce its reliance on traditional, non-renewable energy sources and mitigate the environmental impact of energy consumption.

Many are left out

Unfortunately the many South Africans who fall under the tax threshold (they don’t effectively pay tax), such as pensioners, labourers and even the struggling unemployed don’t get any benefit from installing solar. They are left off the grid and out in the dark as the incentive is only deductible against tax paid. If you don’t pay tax then there is nothing to deduct against. Perhaps a far better incentive and more immediately beneficial to everyone would have been to make panels non-eatable giving an immediate 15% tax break.