As the cost of living in South Africa become as steep as it is in other parts of the developed world, like the UK, US and Europe? The short answer is, it depends on who you ask. Because while comparing the price of apples with apples is fairly simple, comparing the invisible day- to-day taxes, for instance, is a more complex matter. And how much you have to spend depends on your income, whether you drive a BMW or a Citi Golf, whether you live in Yeoville or Sandton, own or rent, and where you habitually shop. According to the latest statistics from the National Credit Regulator (NCR), about 8.6 million consumers had bad credit records at the end of December 2010 – which means that these accounts are three months or longer in arrears or that there’s a judgment against a consumer or he or she is blacklisted.
That said, if you compare the rate of price increases in everything from food and transport to electricity and housing, South Africa’s prices have been escalating faster than those in most of the developed world. In other words, we have fast caught up with our First World counterparts in most of our everyday expenses. Says Tony Ball, who has been living in the UK for 10 years but recently returned on holiday: “Groceries here have gone up very noticeably, especially meat. The prices are much the same as in the UK now.” But our transport is still cheaper. A litre of petrol in Eastbourne, where Tony lives, is £1.30 (R16), compared to our R10.54.

Taxes are everybody’s gripe, of course. “Taxes are built into everything you buy, and VAT is 20% [compared to SA’s 14%],” says Ball. Yet earnings are comparatively good in the UK, and it’s only by including income in the sums that you get a proper perspective. Ball’s wife, Helen, earns £38 000 (R470 000) a year as a primary nursery teacher – much higher than her counterparts in South Africa. Miriam Mannak, who spent a long break in Holland this year, confirms that our supermarket prices have equalised with those in Europe. “The prices are similar if you look at the equivalent to Pick n Pay and Woolworths. But you can find quality food for lower prices more easily,” she says. Renting, however, is far more expensive, she found, but buying a home is more affordable, due to perks like being able to deduct your interest from your tax. “My friend was paying €1 000 (R10 800) rental per month for his flat, but now he has bought, and is paying barely €600 (R6 400), of which the interest is tax deductible,” she says. Also, it costs nothing to have a bank account in Holland, or to transfer or receive money. “You only pay when you are in the red, and an annual fee of around €20 (R216) for your credit card,” says Mannak.

Conversely, in the US, while food is famously cheap, the cost of accommodation is comparatively high, with the average rental for a two-bedroom flat in San Francisco estimated at US$2 100 (R16 500) per month, according to a recent survey by www.investopedia.com. That is still not as expensive as Singapore, where the same flat would cost around US$2 800 (R22 000) per month. And more expensive still is Tokyo, where that flat would cost US$4 352 (R34 300) a month.

This brings us back to overall incomes. According to Martin Westcott of PE Corporate Services, a top South African executive – who earns on average around R800 000/R900 000 a year – is still better off than his counterparts in the UK, the US and Australia, enjoying a higher standard of living, “although the gap has been closing”. “This is attributable to the fact that the rand exchange rate has lost ground against the euro, dollar and, in particular, the Australian dollar, over the last 12 months. Cost-of-living increases in South Africa have also outstripped those in the comparator countries in the last year,” Westcott says.

Middle managers earning in the region of R360 000 to R600 000 a year, should they have a family to support and school fees to pay, would struggle to make ends meet, then. The rise in energy costs has been particularly steep, with Eskom estimating it’ll cost between 75c and 80c per kilowatt by 2016, which is about the cost of electricity in other developed nations (76c per kilowatt). And property tax, as well as other revenue from residents’ pockets – including traffic fines, licences and permits – has risen an average 12% a year between 2007 and 2010, according to the National Treasury overview published in September.

The dynamics underpinning these rapidly rising costs, and the way these costs are structured, is different to those in other developed countries, however. As Tony Twine from Econometrix explains: “The effects of our two-speed economy – where we have a small First World sector in a huge Third World environment – is that First World human and capital resources are ever scarcer, so these become ever more expensive.” Twine says taxes on income and wealth in South Africa are “no higher than top-level tax rates elsewhere”, although they are applied at much lower levels of income. Indirect taxes are also comparable to, say, the UK and the US, even though they are structured differently, he says. So, like most people in the US, UK, Europe and Australia, South Africans are finding that their buck doesn’t stretch nearly as far as it once did. We have an extra handicap in that the prices of our products and services are not as finely graduated as our overseas counterparts – where there is a lot of choice between cheap and expensive – because, as Twine explains, “we don’t have a critical mass of middle-income earners to support this development”. A good example are the stay- over options in Sandton. Most are priced for the wealthy.

You’d be hard pressed to find a B&B for around R500 a ight or less. It all comes down to being savvy with your hard-earned cash. “Don’t be a tourist in your own country,” suggests Twine. “Like the Fins in Helsinki, you should know not to buy a pawpaw with a R35 price tag on it!”