Acts Online
GT Shield

Budget Speech 2015

Financial sector reforms



Honourable Members, I am pleased to confirm that with effect from 1 March 2015, the new tax free-savings accounts will be available.


Significant progress has been achieved in relation to retirement reforms, and consultations with NEDLAC will continue. The first draft of default regulations will be issued shortly for public comment. These reforms have one central objective: to maximise the long-term benefit s to retirement fund members, so that they can retire comfortably.


Our financial services sector is one of South Africa’s strengths, but as noted in our recent market conduct policy framework document, it needs to do more to treat customers fairly.


The bill establishing two new regulatory authorities, the so-called “twin peaks” reform, will be tabled this year. We have strengthened regulations for banks, and will be doing so this year for insurers, derivatives and hedge funds. We will take steps to strengthen the supervision of large financial groups and collective investment schemes, particularly money market funds.


Under its curatorship, African Bank is now generating positive cash flows. We announced a R7 billion back stop last year, but our expectation is that the bank will be stabilised without recourse to taxpayer funds.


The problem of excessive household indebtedness remains a serious challenge. Approximately 45 per cent of credit-active consumers have impaired credit records. This results in part from poor market conduct by lenders and financial advisors.


We are engaging with the major banks on further steps to be taken to assist over-indebted consumers. Government also welcomes initiatives of employers in the private sector who have audited garnishee orders applied to their employees, and have taken steps to identify illegally-issued orders.