WHO NEEDS BOOKS?

It’s rather hard to take seriously these gatherings of the great and good like the recent G20 knees-up in Hangzhou. They are suspiciously similar to old boy’s reunions. The order of events is: Find out who is missing since last time, attend the meeting, stand in place for the photo and then head for the bar.  Naturally Number One was there avoiding the ANC’s full tilt demolition derby. The Brics Brigade held a side-line breakout session and in their group photo JZ is pictured clutching Putin’s hand tightly and smiling as if he had just confirmed a nuclear power station deal. This must have been their first BRICS meeting since Brazilian President Dilma Rousseff was impeached, so JZ was doubtless making nervous enquiries about her fate. The new fab five issued an anodyne and meaningless statement full of phrases like “… strive to facilitate market interlinkages and an inclusive, rules based and open economy.” The main rule in most economies seems to be “try not to get caught with one’s hand actually in the cookie jar”.

Here where the Indian Ocean laps gently against the rolling green hills of Zululand someone styled as “an indigenous traditional activist” is concerned. He suspects that the shortage of transport for ferrying the maidens of this province to the Reed Dance at the royal palace may be a deliberate ploy by the Department of Arts and Culture to keep numbers down. He alleges that there is always plenty of money to get people to rallies but now for the reed dance the budget is not sufficient. The consequence of this shortage is that many maidens will miss out on the wonderful program of events which includes a speech from the king.

This activist appears to have grasped the key fact about government money and he should be asked to chat with the students who are demanding the abolition of university tuition fees while also burning down their own facilities. The budget is indeed not sufficient and the rioting students are in contempt of their privilege of attending a tertiary institute if they don’t explain to us exactly how the nation could afford free education all the way up to their level. The National Budget is a clear and simple (if lengthy) comprehensive document available in any law library (oh yes wait, they burned down the one in Durban this week). Everyone (especially taxpayers) would be delighted to receive from our putative future leaders a logical and balanced academic treatise, befitting their learning, of how that Budget should be recast to meet their demands. Don’t forget the maiden’s busses though.

It’s all so frustratingly pie-in-the sky. In the bad old days when some of us were privileged to be at university, our demands were typically: “Get rid of the Nats”.  It took the form of a silent march in academic gowns around the cathedral remembering to glare at the security policeman filming us from the plinth of the war memorial. Occasionally those wild guys at Wits would get into a running battle with the cops on Jan Smuts but no one torched the library because it contained books written by dead strangers that we probably didn’t like.

Continuing the tradition of astonishing and welcome transparency Stats SA this week published the 20-page booklet stuffed with numbers and charts and the news that the nation’s Gross Domestic Product was once again growing and had carded a surprising +3.3%pa rate after the previous period’s negative number. This should earn us some brownie points from the judges along the touchline but the short term variability of this important measure of total economic activity still worries those of us with long memories and longer databases. It just doesn’t feel right and the suspicion that data collection standards are not what they used to be is beginning to niggle.

A few years ago the ‘boks missed touch with a penalty kick in the dying minutes and the Wallabies went on to score and beat us. This caused me such distress that I had to consult my cardiologist. I now try to do something else away from the TV when we play the antipodeans. Tomorrow I’m going to the beach despite the warning of severe storms. Being wet and cold beats the possible alternative of another doctor’s visit.

James Greener

Friday 9^th September 2016

AIRLINE TO SUPPORT. PLEASE GIVE GENEROUSLY

How wonderful it is to have the nation fretting about the well-worn and timeless threats to democracy like the length and style of scholars’ hair. It does make a nice change from the ceaseless uncovering of ever deepening levels of corruption, theft and bad faith being displayed by almost everyone with the merest claim to someone else’s money. Meanwhile the disgraceful behaviour of those who laughably claim to represent a student elite continues apace. One young man offered the view that the burning down of an exam hall on his campus was “... strategic destruction and not random barbaric destruction”! One definitely needs to have elite education to understand this distinction. This chap should omit this event and statement from his CV, as employers will tend to be less understanding of the subtlety than the university authorities and the tax-payers have been so far. Unless of course he gets to work for a trade union whose attitudes and denial in the face of the increasing grim reality for employment are very unhelpful.

It really was a very modest little notice that SAA placed in the newspapers wondering rather diffidently if there was anyone out there who might be interested in lending them some cash. Well R16bn actually, so quite a bit more than “some”. As yet there has been no word if they have raised anything more than eyebrows. It’s rather well known that the airline is bust in everything but the law and that it’s run by folk with scant idea of what they are doing. So aside from the fly-by-night unregistered and unknown financiers with very dodgy friends, principles and principals, no serious lender is likely to reach for the phone after reading this pathetic little cry for help. In all likelihood it is the taxpayers who will be hoisted back aboard the tired old splay-footed white steed and made to gallop(?) to the rescue of the flag carrier yet again.

Month to month comparisons of many market sensitive statistics are often misleading. 30 days is a very short time scale which can be affected by effects such as clusters of public holidays and late or early inclusions of regular data releases. So the news that in July government revenue totalled a mere R64bn may not be as bad as it looks. It was, however, a record-setting R84bn less than government managed to spend that month and that merits a warning flag. Since that watershed period in 2008 when tax revenues plunged very sharply, the accumulated monthly overspend is now up to R1 300bn. Naturally this comprises a large part of the government’s debt which currently costs us almost R150bn a year in interest payments to service. Unfortunately, except for a few officials at National Treasury and the Reserve Bank, numbers this large have no meaning for most people especially and critically our leaders. Every time they say or do something to alarm the investors who lend the money, the interest rate on the debt creeps up and more taxpayer’s cash has to be directed to interest payments and away from service delivery (and presidential home improvements). This compound interest thing has a sneaky way of growing very rapidly, which is something well known to the evil ratings agencies.

It is amazing how quickly the implementation of “driverless cars” seems to be happening in some countries. Here on the southern tip though we have effectively experienced this development for many years. Or that’s what it feels like after a spell in the traffic or after studying the list of appalling road accidents. Imagining the consequences of introducing the technology here brings visions of those dinky little cars lost in a pothole, driven off the road by a blue-light brigade or riddled with bullet holes by a rival taxi boss. Maybe we need to ensure our flesh and blood drivers all have valid licences first before we let the silicon ones loose?

The Currie Cup hasn’t yet ignited any real interest or passion. Interleaved with the schedule-disrupting   Rugby Championship (a name clearly chosen to rile the northern hemisphere), news of players leaving mid-season to join overseas clubs and the ‘bok captain’s retirement, the tournament so far is battling to gain traction.

James Greener

Friday 2^nd September 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 26^th August 2016