It was another fine example of how impossible it is to get any
consistency from economics. Mind you it does involve two so-called ratings
agencies. These are organisations which usually demand a fee for their opinion
and in spite of this have a pretty dismal record. A day after S&P announced
that the good ship SA was “steady as she goes”, Moody’s said that they thought
they could hear disturbing noises from the steering gear and perhaps the
helmsman was battling to steer her away from the rocks that are looming. What
is always consistent in these cases is the reaction of the newly “downgraded”
entity and National Treasury’s indignant dismissal of this news was text book.
It is true that our debt and financial positions are nowhere near as bad as Greece, Ireland
or Italy
but we should note that our own president seems to share the Italian fellow’s way
with the ladies. And the proportion of our government’s spending that goes to
service the interest on the debt is climbing. The main victim of the Moody’s
announcement was the rand which moved down more than 2% against all major
currencies. But then it more than recovered, presumably on the news that the
wise women and men at the Reserve Bank chose to leave the repo rate unchanged.
They did, however mutter that maybe the time will come when money ought to be
made a bit cheaper. This encouragement of the borrowers at the expense of the
savers is an uncomfortable policy at odds with the supposed needs of the
country.
The same National Treasury have long failed to provide a
satisfactory explanation for why they cannot ring-fence the income they derive
from their taxes on fuel. This seems to be an obvious source for funding the
construction and maintenance of all roads in the country. However, that cash
disappears into the general state coffers where it is used amongst many other
things on minister’s hotel bills and presidential jets. Instead the preference
seems to be for toll roads. The welcome but costly improvements to the major
routes around Joburg have been built with borrowed money that they intend to
repay once the tolls begin to flow. The proposed toll tariffs caused an outcry and
the implementation of the tolls has been delayed at least until February so that
special interests can be placated. This in turn has alarmed the investors who
lent the money in the first place and they have declined to lend any more. Obviously desperate for some income, the
Roads Agency has begun to market their so-called e-tags which offer a
discounted toll fee compared to merely letting the computer read your number
plate and post you a bill. Many of us are interested to see how the post office
will cope with the volumes of mail this method will generate. Since the e-tag
system can be linked to a bank account what remedy would one have if someone
duplicated your number plate and spent the whole day travelling around the city
clocking up toll fees and draining your account?
In the meantime the city around which they are driving is draining
its own bank account pretty swiftly. The outstanding arrears of rates and
services is an outrageous sum and it is high time they resorted to their old
policies of hiring people like Jimmy Abbott the renowned heavyweight boxer
and Lions supporter to go and collect
some debts.
The Financial Services Board has warned the industry that they will
be very strict about ensuring compliance with their “Treating Customers Fairly”
policy. Those of us who actually have customers and clients who are likely to
take their business elsewhere unless they feel fairly treated, are offended and
puzzled by the idea of yet another set of rules to be obeyed. What about having
an alternative government to pay our taxes to because this one seems to pick on
me most unfairly and often?
Now that was a rather special Test Match. Beating the Aussies in two
and a half days is great. If it had gone on any longer I fear Tidemarks would
not have seen the light of day and at least one local columnist would have been
stuck for material next week.
James Greener
Armistice Day 2011
