There is little, which is favourable, to report on our economy.
The fact is that our country, at most levels, has deteriorated under the current political leadership. This has led to not only the immediate disastrous results (a projected two quarter “technical recession”), but what Kieswetter referred to (in a tax context) as soft impacts. These are, and the list is much longer than this, reputational damage, a loss of confidence in our future, immigration, and growing taxpayer resentment, loss of external investment into our country, Rand slippage (two months ago the Rand was trading at R16.30/US $) and so on.
The rescue effort, precipitated by only public indignation (these problems have existed for years) will be hampered by that which caused our current situation in the first place: if our government caused these problems in the face of continued criticism, why should we trust them to fix what they apparently could not handle in the first place? Take the latest saga with Transnet privatising its busiest line – surely this should be its most profitable line?
One cannot blame Ramaphosa – his “leadership” style has been criticised by many but is probably appropriate in the circumstances: the fact is that governance requires so many skills, that inputs from others are obviously required. The problem is that Ramaphosa’s support group comprises freedom fighters/cadres/loyalists (hardly qualifications for the job at hand) who have already demonstrated that they do not have the foresight, skills and ability to provide the leadership that is necessary. Just this relegates the rescue result to almost certain mediocrity.
In addition, promises made (by our government) are not kept – the latest is a report by Fitch which says that our poor reputation for following through on promises, means that there could be downward pressure on our credit rating. Wait for it!
Some 60% of our budget is spent on what is referred to as social wage; providing various forms of support, basic services, and measures to alleviate poverty. Our government’s response, in declaring a state of disaster, is not necessarily wrong, but certainly unaffordable, given the inevitable reallocation of available state resources. The following graph makes this point clear; we have an already overstretched tax base:
The conclusion that one must reach is that we will, at best, muddle on. We will be saved from a Zimbabwean result solely by our larger number of taxpayers contributing to the Fiscus.
There is not much interesting and useful business news aside from the fallout of our power crisis. Some of these are:
Santam and Hollard will no longer cover you for damages arising from grid failure;
if you misrepresent your educational qualifications, you may be fired and possibly may have to repay a part of the salary you were “overpaid” Reference;
how much do you need to start a fast-food franchise? Reference ;
it stands to reason that both the solar panel and electricity storage markets are set to take off in South Africa;
UCT is, again, in the news for the wrong reasons – this time because the vice-chancellor may have misled its board; yawn;
auditors are said to be less keen on auditing crypto dealers for as they might be held liable for business failures following the audit.
The best medical aid (in terms of consumer opinion) is Bestmed, followed by Medihelp.
From the end of this week, employers who make a contribution to retirement funds, will be required to provide additional information relating to each employee. The details are set out at the end of the following article: Reference
Kieswetter (SARS’ chief commissioner) said that there was general agreement with the Treasury that the direction of taxes, particularly for companies, should follow international trends and be downwards. Hope..
Lightstone predicts that our house price growth will be between 0.9% and 3.7% for this year – below our inflation rate. Loos agrees, adding that our property sector is facing what he terms a longer-term correction and that it will take a while before it turns positive. Eina!
An interesting case in which quite major damages was awarded for latent defects in a hone sold, may be found at Reference
I was not able to find the Saflii reference yet.
How does one calculate the ROI on your rental property? Reference
Squatters are a perennial problem in South Africa, the effect of which is worsened as authorities are loath to act against such. One of our better national parks, the Golden Gate Highland National Park, is under threat from subsistence farmers who have moved into that park. They keep cattle, plant crops and hunt the wildlife.
ChatGPT hit legal headlines when a judge in Colombia used this app to generate a court ruling. The following WW article suggests that lawyers should embrace this aid: Reference
Ignore court orders, regarding custody of children, at your peril: Reference
The DA will take on the government decision to declare a State of Disaster. I sympathise with the cause, but question whether our courts should enter the sphere of governance. Having said this, our courts have introduced some rationality into governance which would otherwise be lacking.
It’s the money, not the cause: Ms Mkhwebane’s legal team did not pitch at a hearing owing to non-payment of their fees by the Public Protector’s office. That office lamented the “significant” spend on her legal fees, defending her impeachment. The latest salvo, in this saga, relates to her probe of irregular spending by Mabuyane after Winnie’s death – the PP office had said it had no more funds to appeal the judgement against it, presumably because Ms Mkhwebane had used it all herself! One may reasonably ask why the lady, whose reputation is in tatters, does not simply call it a day.
Medical malpractice practitioners should read this case, as this develops our common law regarding the payment of damages, by allowing hospitals to provide future medical services rather than pay therefor: Reference
West had circulated a note on municipal bylaws relating to SPLUMA earlier this week, reporting on municipalities challenging an order dealing with bylaws which prohibit a municipality from issuing clearance certificates, unless certain payments are to date. Ask me for a copy.
In a claim against the LPFF under the old Attorneys Act, that institution pleaded excussion and lack of entrustment of the funds to the long-fingered attorney: if the attorney owns no assets, is it worth having a go at him? Reference
Fire cases are interesting as a land-owner will be liable to others unless he takes reasonable measures to prevent the spread of fire: Reference
Cancellation of a lease and ejectment: Reference
South Africa has one of the highest Gini coefficient counts in the world – we are a very unequal society – clearly an undesirable situation. How to tackle this is not clear – liberal economists would propose stimulating the economy in order that the wealth generated would trickle down and financial opportunities created for all. This is not necessarily an undisputed position – part of the problem with our economic system is that we believe that each controls his own financial destiny, losing sight of the fact that this is far less true for the really poor, who cannot readily rise above their circumstances.
We gather that another minister (for electricity) will be added to the cohort of ministers governing us – 28 of them. Compare this to the UK which has 22, France which has 19 and Germany 15. ‘Nuff said.