Government finance is a very simple process that just about everyone who is not a socialist can understand. The government needs money in order to pay the salaries of civil servants and politicians, buy goods and services from suppliers and make grants to the ever-increasing number of social grant beneficiaries. And it needs cash (lots) to pay the interest and capital on the loans it has taken out. The loans are necessary because, in common with most governments, ours spends more money than it collects in tax. Over the past 12 months the National Treasury distributed R1.17 for every R1.00 it collected. Many of us would be uneasy about our personal affairs accruing debt at this sort of rate, but the custodians of the state finances are more relaxed mainly because they have the Reserve Bank on speed dial. This is the institution that has the power to change IOUs into money which is a very useful trick that hides behind many different names, including the ludicrous “quantitative easing”.
They are also relaxed because one of the jobs of economists is to find ways to dress up and express “bad” numbers in ways that when viewed “in the dusk with the light behind them” they don’t look so bad. Further our nearly completely Marxist government is delighted to have cause to blame capitalists (conveniently easily identified here because they are white monopolists) and demand radical economic transformation. Ignoring facts and history and mathematics is a fatal trait among these people.
This week, however, Finance Minister Gigaba began to make warning noises. The latest Government numbers revealed that in July the spend was a terrifying R2.52 for every R1.00 of income. The problem is that are now fewer and poorer people supplying the cash. Also known as taxpayers, they and their money are disappearing. Emigration and job loss are the two important factors which have reduced the number of people with an obligation to pay income tax and an ability to spend and incur VAT. Furthermore, the country’s credit score (calculated by the bogeyman ratings agencies) is slipping fast which means lenders are demanding higher interest rates. It’s a real mess by any standard.
Despite his rhetoric the minister sadly is too enmeshed and compromised by the ocean of corruption flooding the nation and its institutions to turn anything around and the nation’s “leaders” have become utterly transfixed by the battle for the leadership of the ruling party. This means that no one is paying much attention to the muttering about the pile of dosh heaped in the state pension fund which would come in handy for plugging the holes in the cash flow. This is a very bad development.
Tonight, an object of which we first heard of about 20 years ago will disappear for good. It has twisted and turned and soared and dived, revealing something unexpected with every manoeuvre. No not a politician but a spacecraft. Cassini. Sent off by NASA to explore Saturn all those years ago it has provided data enough to keep planetary scientists (a very special breed) happy and busy for years. Even its plunge tonight out of orbit around the gas giant with its spectacular rings and into the clouds will very likely provide surprises. No matter what one feels about the USA and its politics and policies we are all the richer for that nation’s space programs.
Our nation however is not in any way richer for the Gupta family being here. The story of duplicity, malfeasance, corruption and theft gets longer and deeper with every day. But as always, this country has a huge capacity to surprise and delight. Taking advantage of our amazing freedoms to investigate and publish, investigators have been unearthing sleaze and dirt which is sticking not only to the usual local suspects but also international corporate names like KPMG, McKinsey and Bell Pottinger. The last has already closed shop, embarrassed by revelations of the depths they were prepared to go to secure business. Hopefully there is panic in as yet unidentified vendors of “expertise” worrying if their incriminating emails are in the pile yet to be leaked.
Perhaps after this weekend our rugby teams will be as feared as our investigative journalists.
Friday 15th September 2017