Top journo asks the multi-million dollar question

SA-in-peril

If you never read another news story in your life, let it be this one.

Ferial Haffajee: How much more pressure can the middle class take before it cracks?
Ferial Haffajee

Ferial Haffajee (Gallo Images / City Press / Herman Verwey)

This has been the whack of a week for South Africa’s middle-class.

Under the cosh, the SA Revenue Service opened tax filing season with a bang and with a promise to come after taxpayers like Julius Malema goes after Pravin Gordhan. In the same week, electricity, waters and rates tariffs all went up, often in double digits.

South Africa’s middle-class pays the majority of personal income taxes – just over four million individual taxpayers contribute the majority to the fiscus, making South Africa’s one of the most progressive tax systems in the world, but one that is extraordinarily hard on its long-suffering middle-class.

Why is this? Because the failed state also means that the middle-classes pay their own education, health and security bills, and increasingly their own water bills, as boreholes become a more common feature with a creaking water supply.

All those private bills have gone up by much more than the official inflation rate in 2019, be that school fees, medical aid rates (across plans) and private security monthly fees.

Stealth taxes

There are also additional stealth taxes in the offing, like the carbon tax (a necessary environmental measure, but a tax nonetheless) and forthcoming national health insurance scheme, which will be akin to a health tax, because the state system is so poor and over-burdened that you cannot yet see it becoming a general-use public facility, like parts of Britain’s national health service and the Scandinavian social systems.

A healthy South African society, directed toward social justice, would include a middle-class that is three times its size to ensure that more state resources go to poor South Africans in order to lift up the entire country.

Present policies are not geared at encouraging a middle-class, but instead push it into downward class mobility – and risk mimicking the make-up of post-colonial societies, where there is generally only a well-to-do elite and a massive underclass.

 

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