On 23 February 2022, Finance Minister Enoch Godongwana delivered the annual budget speech, providing an update on South Africa’s finances. Low economic growth, vast unemployment, increasing debt levels, coupled with South Africa still being in a state of disaster two years since the start of the Covid-19 pandemic, all contributed to a complicated juggling act for the Minister of Finance. Given the unrest witnessed in 2021 along with weak foreign investment, the 2022 budget had to be geared not only to curb unemployment and to stimulate economic growth, but to also give assurance to foreign investors. In the words of Minister Godongwana “we need to strike a critical balance between saving lives and livelihoods, while supporting inclusive growth. This budget presents this balance”. When to take a test and when will it get covered? You’re covered for 2 COVID-19 Polymerase Chain Reaction (PCR) screening tests every calendar year (1 January to 31 December), regardless of the outcome of the test. Medical Aid will pay for COVID-19 diagnostic tests, provided that the member who took the test:
Will you have to pay upfront and submit a claim for it to be paid from this benefit? This depends on the payment arrangements your medical aid have with your healthcare provider. If your healthcare provider submits a claim on your behalf, your medical aid will reimburse them directly subject to meeting the clinical entry criteria of the benefit. If your doctor requires you to pay upfront, you can submit your claim to your medical aid. What does it mean if I test positive for the PCR test? A positive PCR result confirms that you are infected and that you can spread it to others. You would need to contact your doctor to discuss the implications of this finding and the next steps to take, whether this be to self-isolate at home and/or on your planned hospital admission. If I test Positive, how do I self-isolate and for how long do I self-isolate? If you are infected and are asymptomatic i.e. you show no symptoms, you must stay at home and self-isolate for 10 days from the date of your positive test. In case of severe respiratory illness or severe shortness of breath you need to immediately consult with your doctor or go to the nearest hospital emergency unit. In case of severe disease, you will probably be hospitalised, and you would need to continue to self-isolate for 10 days after clinical stability is achieved. If I test positive for Antibody test, will I have immunity to COVID-19 infections in the future? As COVID-19 is a new virus, we cannot tell for sure how long antibodies will last or how well they can protect against future infections. Even though it is believed that a person will have some level of immunity after infection, which is the scientific principle that the development of a vaccine is based on. However, all individuals should still adhere to recommendations by the department of health on social distancing, hygiene, and personal protection, regardless of their antibody test result. How am I covered for COVID-19? This benefit, available on all plans, is covered by the scheme for cases of outbreak diseases and out of hospital healthcare services related to COVID-19. These healthcare services are covered up to maximum of 100% of your chosen medical scheme’s rate in accordance with Prescribed minimum benefits where applicable. Am I covered if I am in a waiting period? The scheme resolved to change its’ approach to underwriting for the duration of the outbreak, specifically with regards to cover for COVID-19. Members that are diagnosed with COVID-19 after joining will have access to the benefit, even if they are subject to a waiting period at the time of being diagnosed with COVID-19. Members that are diagnosed with COVID-19 before joining the scheme will not have access to the benefit and will be subject to waiting period to protect the scheme and its members against anti-selection. Emergency care – When should I call 911 or go to the emergency department? Call ER24 on 084124 if you are experiencing potentially life-threatening symptoms. These are some of the symptoms for which you should immediately call ER24;
What if I’m afraid to go to the emergency department? We understand those fears, but emergency department staff members wear personal protective equipment, and all places are fully cleaned and disinfected. Please note, that waiting too long to seek care for some health care emergencies is a bigger risk than the chance of contracting COVID-19. How do I know I won’t get COVID-19 in the emergency department? Depending on the urgency of the patient’s medical needs, everyone entering the emergency department is immediately screened for symptoms of COVID-19. How do I know I won’t contract COVID-19 if I need to stay in the hospital for treatment?
All labour and delivery patients – How are women protected whom come in for labour and delivery? In order to prevent the spread of COVID-19 and protect the health of all patients and staff members, testing for COVID-19 and taking precautions for each woman who is admitted to labour and delivery for delivery. The care team will follow special infection prevention procedures and wear proper personal protective equipment. Depending on the woman’s COVID-19 test results, she may be cared for in a special room and according to COVID-19 guidance for deliveries. What to expect when you go to the hospital During the COVID-19 pandemic, we have extra measures in place to prevent the spread.
Registration for COVID-19 Vaccine Acting health minister Mmamoloko Kubayi-Ngubane has announced a major boost to South Africa’s Covid-19 vaccination plans, with vaccines now being made available to more age groups and on weekends. Kubayi-Ngubane said that the government had also agreed to open vaccine registrations to people in the 35 – 49 age group.
All staff will be vaccinated, even if you’re not part of Discovery health, if they are part of company staff list, then they are eligible to receive vaccination. Should you be interested, please contact us and we will assist to communicate with Discovery to action Discovery Vaccination programme for employers.
Vaccination during riots and civil unrest period Please note that some of the vaccination sites that are affected are temporarily closed due to looting, riots and civil unrest. The vaccination rollout will be delayed but still encourage all clients to please use their digital form to register and make appointments. Those that missed their appointment due to recent looting will be rescheduled. If you have any other queries please contact our Health department, email service@daberistic.com, Tel 011-6581333, Option 2 for Medical Aid. South African Market Update South African equities ended higher for a sixth consecutive month, despite poor performance from large industrial counters including Naspers, Prosus and British American Tobacco acting as a headwind to the performance of the local equity index. Local bonds ended the month higher, supported by a stronger rand over the month and outperforming both aggregate developed and emerging market bond indices. Local listed property had a strong month, as the asset class continues its recovery amid the local economy returning to more normal levels of activity post the Covid-19 induced lockdown at the beginning of the year. The rand was largely stronger against most major developed market currencies over the month, receiving continued support from the positive trade balance caused by higher commodity prices and subdued imports. South African Economic Update Following weak economic data in January due to the Covid-19 induced restrictions, trade data for February (which was released in April) rebounded strongly. Wholesale and retail trade recorded month on month increases of 1.3% and 6.9%, after falling -0.9% and -2.4% respectively in January. SA’s trade surplus widened to R52.8 billion in March (from R31.2 billion in February), which is the widest surplus on record and continues to provide significant support to the rand, one of the best performing emerging market currencies year to date. SA headline CPI moved higher to a year-on-year figure of 3.2% for March (from 2.9% in February). Local inflation continues to surprise on the downside, however, inflation is expected to rise further over the next few months, largely due to base effects and higher international prices. Global Market and Economic Update Global equity markets continued to climb higher in April, supported by surprises in terms of positive economic data and company earnings releases. As at the end of April, 87% of S&P 500 companies have posted Q1 2021 earnings which beat estimates, with earnings growing by an average of over 46% year on year. US President Joe Biden addressed a joint session of Congress during the month, motivating for a $2 trillion infrastructure plan and a newly unveiled $1.8 trillion plan for families, children, and students. President Biden is proposing that the American Families Plan is largely funded by additional tax of $1.5 trillion on the top 1% of earners as well as increased levies on capital gains and ordinary income for those earning more than $400,000 a year. The US is expected to reach its pre pandemic level of output midway through 2021, with record stimulus packages and low interest rates providing significant support to aid economic recovery. The positive moves in global equity markets came despite uneven Covid-19 vaccine distribution across developed and emerging markets, with many key emerging markets struggling to source and distribute vaccines, leading to spiking infection rates in certain countries (particularly India and Brazil). Source: Morningstar
Last month I talked about Step 2 - Do Not Spend More Than You Earn. Let's continue with Step 3 - Do Not Take On Credit. South Africa is a westernised economy, its financial system is modelled on the European and American credit system. If you have a steady income and a good credit score, it is easy for you to get credit. Credit is generally defined as a contractual agreement in which a borrower receives something of value now and agrees to repay the lender at a later date—generally with interest. Simply put, when you buy something now and pay it later, you are using credit. Examples are when you use your credit card to buy furniture and TV and put it on budget over 12 months. Based on your income and good credit score, the banks will want you to apply for credit card and give you a credit limit. As you manage the card well, pay the amount due in time, and your income rises, the banks determine that you are creditworthy and increase your credit limit. The banks advertise that the advantage of a credit card is you can get 55 days free of interest, that is the maximum interest-free period you can get. When you receive your monthly credit card statement (by now most banks send the statements electronically), you need to pay attention to: credit limit - the amount granted to you by the bank closing balance - the amount you owe on the credit card at statement date minimum amount due - the minimum amount you need to pay the bank payment date - the date by which you need the pay the bank It is very important to note: IF YOU DON"T PAY THE FULL BALANCE DUE BY THE PAYMENT DATE, YOU WILL PAY INTEREST Many clients I have consulted don't understand this, and they think it's OK to pay interest on their credit card, as they only pay the minimum amount due. But this is not OK! This is poor financial behaviour. Financially smart people understand how credit cards work. They use credit cards to their advantage. They buy things on credit. They pay the full closing balance on or before the Payment Date. They don't pay interest on their credit cards. You need to inspect your credit card statements for the last three to six months. If you pay interest every month, then you need to reset. Reduce or stop spending using your credit card, work on paying off the full balance. Once you have done that, then you get into the habit of paying the full balance by the payment date every month. Set up a reminder or have an automatic debit order to settle the balance. Remember, the amount you owe on your credit card, to you it is credit card debt. To the bank it is credit card asset. It is an asset because they earn interest from you. Currently the banks charge you between 12% to 18% interest on your credit card debt. That's a lot of interest to pay! You don't even earn this kind of return on your long-term investments. Stop giving more money to the bank than you need to! Rather keep that money in your pocket. I have some rules for credit cards, which I advise my clients to follow:
Don't take on credit, it means you get into debt. Apart from financing high-value items such as a property, a car, business or study loans, you should not take on credit. Finance Minister Tito Mboweni gave his budget speech on 24 February. Overall it is a taxpayer and investor friendly budget. Old Mutual has a nice summary of tax changes, we share with readers below. We have the pleasure of interviewing Mr. Du Yinliang, the CEO of Prescient Investment Management China. This is part of our series profiling professionals of Chinese descent in the financial services sector in South Africa. Your full name? Age now? Liang Du, 37 What has been your experience? CEO - Prescient Investment Management China Limited What do you do? Business development strategy, investment strategy. Your area of expertise? Investment management What is your place of birth? Shanghai, China When did you immigrate to South Africa? What brought you here? I went to Zaire in 1986 and went to South Africa in 1990. In the 1980s and 1990s, China was still a very poor country. Parents want to go abroad to help their children have better opportunities. Since my aunt married a Zairian resident, our family went to Zaire. Zaire had a huge coup in the 90s. During the riots, the first plane to leave Zaire was to South Africa. I stayed in South Africa ever since. Where did you study, and your qualifications? MBA (University of Cape Town), B.Bus.Sc – Actuarial Science (UCT) Why did you choose your line of studies? I didn’t know what to learn when I was young. I was doing well academically. I heard people say that UCT is the best university in South Africa. B.Bus.Sc-Actuarial Science is the most difficult undergraduate. As a young person, I don’t know what actuarial science was, let alone finance. Anyway, I thought to myself, I would learn it first. Fortunately it suits my nature. How did you get into the financial services sector? At the University of Cape Town, the boss of Prescient Investment Management was a professor of finance. In the Honours year, he was my supervisor for my Finance Honours project. The topic was how much money does a person need to retire? At that time, most of the students who studied actuarial science went to the insurance companies, I originally planned to go to Old Mutual. After completing the research, he said he liked my way of thinking and asked me if I wanted to join his company. I joked by asking for a salary doubling Old Mutual's offer, unexpectedly he agreed. I have been with Prescient for 15 years, I have found that I like this industry very much and it suits my abilities. The company is also very supportive of entrepreneurship. What are your hobbies and interests in your spare time? Reading, playing squash, playing video games. How do you see the future of South Africa? I have lived in South Africa for 26 years. I am both Chinese and South African. I love South Africa very much. I certainly hope that South Africa’s future will be successful. South Africa has many characteristics. Unfortunately, after many years of weak policies and corruption, it now faces a dilemma. Looking at the data of South Africa objectively, the risks are high. The economy needs reform, a lot of investments and infrastructure development, education, healthcare, and transportation. But the financial resources are limited, the national debt is high, and there is too much corruption. There is a danger of a vicious circle of shrinking the tax base due to the massive brain drain. The labour law does not support the development of a large number of small businesses. The lack of infrastructure makes it uncompetitive in many industries. The future of South Africa depends on everyone's contributions and sacrifices, but for everyone to sacrifice, the people need to unites, everyone needs to have a shared dream. It is difficult to say whether South Africa today has any determination to change. Of course I very much hope that South Africa can change and will definitely come back after retirement! How do you see China's future? There is no perfect government in the world, but China's general economic and social development has been very successful over the past 30 years, which can be said to be the opposite of South Africa. Infrastructure, planning, education, healthcare, anti-corruption, and opening-up for business have all made great progress. In 1990, China's per capita GDP was 300 US dollars, South Africa was 3,000 US dollars. In 2018, China's per capita GDP was 9600 US dollars, exceeding South Africa's 6200 US dollars. Today's China has the foundation of a successful country. Although there is a certain degree of friction with Trump, through the efforts of the Chinese and the current scale and foundation of China, there should be very successful development in the next ten to twenty years. I returned to China in 2016 and has lived here for four years. I can understand why China can succeed. People are united, transportation efficiency is high and cheap, general education is of high quality, basic healthcare is almost free, super safe, and the economy is active. Every day you can feel the energy of China. Naturally, the gap between the rich and the poor is also very large in China, but unlike South Africa, the older generation with poor education works hard every day to do blue-collar jobs and entrepreneurship, and the younger generation’s education has caught up with the level of developed countries. Whether starting a business or working, ordinary people all have jobs, and have more than enough. Everyone works hard. So in the near future, China will be a country capable of development. China now has capital, talents, infrastructure, and a good business environment. Of course, the biggest risk for China is to rely too much on good leadership. Just like Singapore, the Chinese government is very strong and the country will be very successful when it is well led. After Xi Jinping took office, he did a lot of anti-corruption work and changed the direction of China's development. After years of rapid opening up, China shared many similarities with South Africa a decade ago. There were too many corruptions, government agencies were becoming more and more ineffective, national assets were lost, and policies Just looked at the short-term, and let the next leader solve the long-term problems. Through many improvements and hard work, be it pollution, anti-corruption, product quality and safety, deleveraging, shadow banking risks, and transparency of government agencies, it can be said that the direction has changed. These changes are something everyone can experience. Although there are risks, I am confident that China will continue to grow and develop. What advice or encouragement do you have for university students who want to enter the financial services sector? Finance is a very fulfilling career, which gives me everything in my dreams, but young people who want to join the industry must like this industry before joining. Competition is fierce and pressure is high. If you choose the finance sector just for money, you will collapse. I have seen too many people burn out after five years. To be successful, you must have a passion for this industry and it matches your personality. The second point is that if you decide to join, you must be determined to work hard. Finance contains too much specialised knowledge. Only through hard work can you become an expert. I have never met a lazy person who is successful in finance. Everyone is not only smart but also working hard. People who are successful in finance must have high IQ and EQ, as well as the spirit of continuous improvement. Sirago is one of the leading medical gap cover providers in South Africa. If you have medical aid, then Sirago gap cover is an essential supplement to your medical aid, to cover payment shortfalls. Sirago offers some of the premium, benefit-rich products. Overall, the premium increase will be 8.6%. It has some great updates and additions in 2021. These are:
Continuing with their focus on specific niche markets, they will be launching the following products:
2021 Sirago Gap Cover Premium |
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