Friday, 26 August 2016


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