The primary economic news of this week past must be well known to all those who pay attention; some notables are –
That our expected GDP growth for next year is softening, given the expected impact of omicron.
That twenty-eight banks have now been drawn into the Competition Commission investigation of bank manipulation of the exchange rate by manipulating bids, offers and so on.
The dispute between Nersa and Eskom, over a tariff increase leaves neither smelling of roses. The former has had to concede that it’s methodology, in calculating increases, is wanting and the latter is, on a daily basis, implicated in dubious dealings.
SAA wants to sell Mango off – that entity, if liquidated, would repay creditors 4.4 cents for every Rand owed.
Promises…NSFAS’ promise of free higher education is R10bn short of what is needed, even after the Minister of Finance upped the NSFAS allocation from R44bn to R56bn. The shortfall is blamed on an increase in demand – clearly the authority does not understand that you cannot promise more than what you will reasonably receive. In a similar vein, is a DUT protest, against that institution taking on students, that it cannot promote to a following year, as it does not offer a continuation of some of those courses (you’d think this logical, wouldn’t you?).
The Portnet delays have led to the affected industries becoming increasingly vocal in their complaints – the fact is that the system is not functioning properly.
Some positive news: Bloomberg reports that pandemic-favourite stocks are up!
Petrol prices have skyrocketed to record levels this year. This has led to all manner of questions being asked about fuel levies and so on. The fact is that our government took over the fuel levy on petrol from the apartheid state, over a quarter of a century ago, as it was a convenient source of revenue. The apartheid government considered petrol a strategic resource, which is hardly the case today. Taxing fuel seems reasonable if one uses the proceeds to build and roads – the user pays, right? But, no, the revenue from that source is not ring-fenced. Alternatively, one can say that only the rich drive and that the rich must therefore pay more taxes than others? This is not true either as transport costs affects all in one way or another. So, one concludes that levies on fuel, is merely a tax.
If one considers the tax that South Africans pay it is interesting to compare tax revenue as a percentage of GDP. The graph below is dated but illustrates a still-valid point. The fact is that we have too few taxpayers and too high spend-expectations. Couple this with a government that cannot sustain its population, the result is where we are at.
(War) talk. Our government cannot extract itself from its guise as revolutionaries/warriors:
“Home Affairs has declared war on queues to reduce waiting time…by displaying signage outside offices to categorise queues…” War by signage? The promise is that a booking system is in the offing.
Our government cannot police its borders, so it makes laws…which its police cannot enforce – this does soothe the complainants because, clearly, action has been taken. To assuage complaints about the employment of foreigners a new Labour Migration Policy is being developed by the relevant ministry, which would regulate the employment of foreign workers in South Africa. Yes – why we should employ locals rather than foreigners, if the latter is better qualified and works better/more cheaply, is a mystery to me – but then I do not really understand politics.
There is talk of investors withdrawing support from Prasa. And why not – it is common cause that our rail system does not function. Midst in this furore stands Gibela, which was awarded a R51bn contract to manufacture six hundred trains, maintain and support them. That entity has now given the Minister a deadline which the Minister does not seem to be able to get to grips with: “We have billions of Rand we can’t spend because we are not building capacity at Prasa.” A sceptic would say that the “right” people rather than the best qualified are being employed at that institution. And, to make matters worse, our government is being disingenuous: it has now fired the Prasa CEO because of his failure to secure clearance from the State Security Agency something which one suspects was not an issue until now; the problem was that the board had first attempted to fire him for non-performance which it could not prove! It’s just a jump to the left…
Recycled mayors are talking up what will be done next, to now render service. A Moneyweb article this week pointed out that municipal turnarounds are unlikely to be quick, if it comes at all. Two of the primary issues are staff-spend, which needs to be reduced, and collection rates which are wanting. The latter is understandable if the municipalities would but ask, but they don’t/will not: in Pietermaritzburg we have palatial homes, built cash, just outside the old city boundaries, but which are not taxed, owing to their not being built on land owned by the occupiers. Obviously, we should not provide services to those able to pay, but from whom we do not have the gumption to collect.
Lastly, Minister Gordhan has a two-year unified plan to turn Eskom around – great, why only now? He had, three years ago, pledged to address operational problems at Eskom and root out corruption. But then, this time it’s different!
Less contentious news is –
That virtual credit cards will, presumably, in future, replace credit cards for Internet transactions.
An article on the nuances of severance pay when retrenching workers, may be found at Reference
A note by Businesstech, on the results of a poll on banks, that seemed so divorced from reality that I abandoned it is available – with that caution, take a look; Reference
Whistleblowing in South Africa, when it involves the boss, is still not for the fainthearted; Reference
The NPA has been so much in the news of late, in that its boss has now been summoned to Parliament to explain. Hot on the heels of this news, is a suggestion that Eskom might privately prosecute, as the NPA is not coming to the party. Furthermore, Accountability Now is threatening Batohi with a mandamus to investigate and prosecute high profile cases.
Judge Hlope has, again, made the news for the wrong reasons. His impeachment is going to be resisted at every turn, with the BLA now weighing in and saying that it is the JSC that is in the wrong and not Hlope. The BLA alleges that the JSC invoked “a process that required members of the judiciary to testify antagonistically on oath in adversary proceedings to reach a conclusion that one judge is speaking the truth, and the other is not”. One can but marvel.
I am repeatedly intrigued by great offerings of training by the BLA, LEXIS-NEXIS and others. The problem with these is that one must attend smack bang in the middle of work hours, rather than have the organisation make such an offering available as a potted session afterwards, so that one can attend after hours. Some of us work…
So, will meritocracy be ignored at the highest level? We are going to witness the Chief Justice being chosen and, I believe that what should happen, is that the best person for the job should be picked. If the only woman in this group were chosen just because of her gender, this would be a travesty.
Shacking up together? Do consider a cohabitation contract: Reference
A woman, whose husband divorced her after 35 years of marriage, was compelled to share her pension with the adulterer, because she knew for some 10 years about his alleged infidelity, yet chose to ignore it: Reference
The Magistrates Commission had used race to totally exclude white candidates from consideration as candidates for an appointment. Such an exclusion is unconstitutional: Reference
Does an attorney need to state that he has an authority from a client to depose an affidavit in support of a recession application? No: Reference
Does the High Court have a discretion to adjudicate on the question of the existence of an arbitration agreement? Reference
A trust as member of a CC? Reference
Loos (FNB) expects the future of property values in South Africa to revert to a situation of below inflation growth. The rise of interest rates will put a brake on the purchase of residential properties and, as corollary, better the house rental market – which is still showing negative real growth from the previous year. So much for property being a hedge against inflation – at least in the short term!
There are a number of new developments such as the Lagoon Beach, Johannesburg, the eco-estate, Johannesburg and an interesting note on a garden in the sky, that might interest you: (Reference)
A ray of hope in this dismal sketch is a report that the building Contractors’ Confidence level is up dramatically and sits at its best level since mid-2019.
“When it comes to paying contractors, the sky is the limit; when it comes to financing the basic functions of the state, the coffers are empty.”
― Naomi Klein,
Can we expect a new National Police Commissioner soon? Once the Minister of Police publicly says that his Commissioner was not attending to the unrest and that worthy responds by saying that the Minister was not looking in the right place, you cannot expect these to do work together. Good. Anyone who had watched the video of our National Commissioner testifying at the SAHRC investigation, cannot be in any doubt that this man is not worthy of the post he occupies. The academics say that the unrest was inevitable – something that the police simply did not notice and, when things did go pear-shaped, the police attitude that if the crowds were not endangering lives, crowds could continue causing havoc, is pseudo-rationality which does not gel with police function. The question, asked of minister Cele, is whether he will, this time, appoint on merit?
An interesting note, that I chanced on, was an article published in the European Journal of Epidemiology giving a finding that there appears to be no discernible relationship between the vaccination rate of Countries and the new Covid19 Infection rates in the last week. Reference
Son number 1 spent a week in Stellenbosch drumming up business for a new venture – his comments on the local techno park, highlighted the reason for the success stemming from that town. Interestingly, he says that the support given to him by others engaged, in the same business was remarkably different from the style of doing business in Joburg. The latter discourages competition. The former would assist if you will not go into direct competition with those you consult. Perhaps there is something going for the Stellenbosch mafia?