A comprehensive study of the financial well-being of South African households is to be undertaken by the University of South Africa’s personal finance research unit.
It is trying to assess how households used their income to acquire assets and how these assets were financed.
Professor Bernadene de Clercq, head of the research unit, says that it is common knowledge that spending within the South African economy is driven by households and there is a wealth of information available about income levels and expenditure.
However, she says, the research unit now wants to construct a balance sheet of assets and liabilities of all South African households. She says this information will assist policy-makers in drafting new policies that are based on sound research.
She says that policies are currently being drafted without assessing the impact that they might have on assets or liabilities of households.
De Clercq says, for instance, that when the recent electricity price hikes were formulated, the regulator had no knowledge of the impact that the higher tariffs would have on household finances or how they would limit an individual’s ability to save money or to acquire sufficient assets for retirement.
She added that when the government revises the tax rates – or introduces new taxes – this was done without assessing the impact that these rates would have on the retirement planning for households.
She says that when households have to pay more for electricity or toll roads the reality is that they have less money to save and this reduces their ability to do so and places additional burdens on the government to assist these households after retirement.
De Clercq says the researchers will attempt to construct balance sheets for different income and age groups in various provinces.
Randomly selected households across the country will be asked to complete a confidential questionnaire or participate in a telephone survey.
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