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.
James Greener
Friday 15th September 2017
