South Africa has evidently made limited progress in reducing income inequality since the
end of apartheid. In fact, since 1994 the Gini coefficient1 has increased somewhat to 0.69 in
2011. South Africa’s levels of inequality are even greater than those in Brazil, another highly
unequal country. For instance, 61.3% of aggregate consumption expenditure comes from
the richest 20% of South Africans, compared to 55.7% in Brazil (StatsSA 2014; SEDLAC).
In a country as unequal as South Africa, it is critical to determine the progressiveness of the
major fiscal policy instruments – i.e. to establish whether government spending and
taxation separately and together are ameliorating or worsening the degree of inequality
that would otherwise exist between individuals.