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
