Friday 26 August 2016

ANYONE CAN RUN AN AIRLINE




Instead of being contrite and chastened by the clear message sent in the recent local elections to the ruling party by the electorate, Number One has come out swinging. He has side-lined his ministers and effectively seized political control of many of the so-called State Owned Enterprises like South African Airways and Denel (the arms manufacturer).  Although the details of this move are yet unclear and probably will be challenged, the motive is suspected to be that it places JZ and his chums closer to the large cash flows that these organisations generate. Despite a last minute expression of confidence in Finance Minister Pravin Gordhan, it looks as if JZ is fed up with the way that National Treasury keeps such a tight hold on the purse strings.
Whatever else happens though, the currency and bond markets weakened by as much as 10% on the news. Unsurprisingly, some muttering about the potential for a credit rating downgrade by year end has resurfaced. A Trade Union organisation has been particularly accusing about the malign and evil intent of the ratings agencies. Of course if the country spent less than it earned and was making serious efforts to reduce its debt, the credit rating would soon be all but irrelevant. The arguments for a sovereign nation to run a budgetary deficit are unconvincing.
What has been surprising however, are the company results that are appearing in the June year-end reporting season. Aggregate earnings and dividends are slightly better than a year ago. While the rest of us whine and criticise there are people doing the hard stuff making and selling goods and services. Wonderful. But they do face incredible obstacles. Arcelor Mittal (remember Iscor?) were this week handed a fine of R1.5bn (yes billion!) for its involvement in certain cartels. There will be experts who will explain to us just how damaging and naughty these practices are and that we outsiders can’t make a proper informed judgement about these things. This could be somewhat true but governments world-wide have frequently found a reason to interfere in the steel business and many market distortions and loopholes probably have their origin in those interventions. The real worry though is that it is never the aggrieved or affected parties (if indeed there are any who have been clearly disadvantaged) who benefit from the great cash handover. The money ends up at Treasury.
This sugar tax furore is getting sticky. While it is pretty much certain that many people put on weight if they consume too many carbohydrates, the niggling suspicion remains that the government is really revenue-seeking and is not that fussed about the population’s poundage. In fact, what we eat and drink really has nothing to do with government. For many manual labourers fortunate enough to get a job of digging, lifting and carrying, their affordable meal time choice is often just half a loaf and a bottle of Coke and very few of these chaps look overweight. On the other hand, the parliamentary pews are packed with prodigiously portly prattlers. So what about getting them to set an example and demonstrate the benefit of cutting out the carbs? Only those MPs who can prove that they have lost weight since their last appearance will be allowed to speak. Not only might this prove their commitment and understanding of what their proposed tax might achieve it will surely reduce the number of boring and virtue-signalling speeches. Only once the average individual weight loss is say 20kg may the politicians consider threatening us again with this tax.
It was certainly very embarrassing to have a five-day cricket test at Kingsmead washed out by a rain shower. Rumours abound that the groundsman’s opinions were overruled. But there were fewer spectators on the good day than there were millimetres of rain so it will be hard to convince visitors to want to play here again.
And in rugby, neither the ‘bokke nor the Wallabies can be relishing the rematch replays of last weekend. We were fortunate. The Aussies were flattened. Our new coach can deliver an endless stream of nonsense and waffle to fill the newspapers columns, but a coherent 80-minute game plan that the team can remember is proving less easy. Well at least Grand Prix is back at the lovely Belgian circuit.
James Greener.
Friday 26th August 2016

Friday 19 August 2016

AUGUST IS EARLY FOR TEST CRICKET IN DURBAN



It feels as if the world markets have entered a holding pattern with not much happening until both the Olympics and then the US presidential elections are over. In respect of this latter event it is utterly amazing that such a big country can offer its electorate such a poor choice of candidates. Is there no chance of an unexpected gale of change such as we have experienced down here on the southern tip? Once again the perils of foretelling the future are laid bare. Did any pundit come anywhere near to the outcome for our local governments? Democracy given its head can produce some amazing results. Once again, as in 1994, one is proud to be a South African.
Meanwhile a bunch of noisy “students” with so much time on their hands and silly ideas in their heads that they can’t possibly be enrolled for any sensible courses have begun the annual clamour about university fees. The situation is multifaceted with a major player being something called the National Student Financial Aid Scheme which at heart is a tax-funded bank with a very poor record of collecting repayments on its loans. It has a book running into tens of billions and gets excited when it reports that it has recovered R66m from debtors. Maybe they have the same understanding of large numbers as Number One?  It would appear that many beneficiaries of this fund don’t bother to use much of their grant to pay their tuition fees and so this indirect method of transferring state cash to universities is not working well.
Also disappointing is the growing grade inflation now appearing in academia. Increasingly one reads that nothing less than a doctorate will suffice to equip a person for the world of work, while by and large the opposite is true. A side effect of the post-local election shuffling is that it has exposed the existence of a professorial chair in the subject of Multilevel Government. This department is proving to be a great help at the moment for journalists in need of a pithy quote about coalitions, but one does wonder how many jobs await the PhD graduates of this discipline!
Another inflation accompanies the warning from the Beverage Association of SA about the proposed Sugar Tax. They reckon that 70 000 workers will lose their jobs as th, result of a fall in consumption of their product. This seems improbably large and since we all have to drink something, surely other jobs will be created elsewhere as drinkers change their quenching agent. The real problem here is that the tax is merely the latest revenue generator that politicians are delighted to stick onto the current “bad-boy” product because it looks as if they care. Just like the plastic bag levy and the carbon tax, the money collected by these imposts flow into the general fund and not, as widely believed, into specific projects addressing the supposed scourge.
The letter that accompanies the new “Smart” ID card lists a number of stern injunctions about how to treat this piece of plastic. It must not, for example “be exposed for extended periods to extreme climatic conditions”.  Helpfully the letter reveals that a normal climate is defined (really?) as 23 degrees C and 50% relative humidity. So that rules out taking the card to Cape Town in the winter and Durban in the summer and the Karroo just about any time! Also, the ID card should not be exposed to aggressive gases; so in a wallet in the hip pocket is also not a wise place to keep it ?
The resignation of Oregan Hoskins from the presidency of SA Rugby has elicited a surprisingly wide range of opinions about his decade at the top. Certainly the bokke lost to both Japan and Argentina in his reign but it is unfair to pin these defeats solely to his name. The Proteas are also battling (they are now ranked 7 in test cricket). Both the national soccer teams came home early from the Olympics and the Sevens didn’t do as expected. It’s tempting to make a connection between government’s growing interference in these high profile team sports and the list of disappointing results. But like sponsors, government pays scant attention to talented individuals until through intense personal sacrifice and efforts they raise to fame. Then suddenly both appear: one waving cheques, the other claiming policy success. The rest of us cheer wildly.
James Greener
Friday 19th August 2016