Unless there is a fearsome counter-reaction to the latest news from China
that their economy is supposedly on the mend, the JSE All Share index will be
delivering a total return of around 22% for 2012. This is splendid and
certainly unanticipated by most pundits (especially me) this time last year. Obviously
the very steep rises in energy costs such as petrol and electricity had a far
smaller impact on the wage-earning population than was forecast. Somehow and
from somewhere plenty of people found more money to spend on stuff and well-run
companies were able to turn this spending into better earnings which resulted in
share prices being pushed up. The numbers in that category of spenders obviously
swamps those on fixed incomes, who are undoubtedly having a much tougher time.
In conflict with this is a conclusion drawn from the October
government cash flow data which show that the deficit is growing larger and
faster than expected. The chief cause is a result of revenue (tax) collections
being less munificent than forecast. This is not what might be expected if
there really is a growing middle class who should be making contributions by
way of income tax and VAT. Now monthly data is naturally volatile and National
Treasury says that everything is going fine and not to worry. Indeed, the expenditure
side is, so far, reasonably on track. However, politicians rarely do anything
that will reduce spending and if the deficit worries them they will probably try
and fix matters by poking about in the taxation legislation. This morning for
example Chamber of Mines felt it necessary to point out that any further tax
increases in their industry will be a case of flogging a dead horse. I reckon
we are all pretty much taxed out these days.
Given the seemingly haphazard way in which the delegates for the
ruling party conference have been selected, their powers are a bit worrying.
Not only do they get to pick a party leader who will then be the nation’s (unelected)
president, but they apparently will pronounce on all manner of other topics.
Like the business strategy for the country’s major utility suppliers. Mind you,
anyone who knows anything about telecoms, broadcasting, power generation,
railways and harbours have long since been fired or retired so why not ask the
delegates in Mangaung how to run a phone or an airport company. The government is
now totally in thrall to a centrally planned economy and the “reds under the
beds” that the previous lot warned us about are now out in the open, bouncing
on the mattress and holding on to the curtains for support. Eventually
something will fail.
Amid scenes of simulated amazement and astonishment, the suits in
euro land claimed to discover what the rest of us have known for ages. That Greece was bust
and that most lenders of money to that government were not going to get much of
it back. Reportedly this admission and realisation is a “good thing” and will
clear the air and encourage another set of experts to rush in and lend even
more to a nation that has become very used to living beyond their means.
The 12th World Toilet Summit here in Durban
has passed with very little to show for it. About the sole topic to receive any
publicity was the presentation by a local team of a new waterless loo.
Unfortunately for them the incessant rain and severe flooding in the province
somewhat diluted the message that waterborne sewage is a luxury in places like Africa. Disappointingly there was no final communiqué
from the toilet-masters about the correct way to rig a toilet roll – with the
loose end on the outside. An opportunity missed.
Unless you are keen on watching golf played in hot and muggy places
there is not much sport to catch the eye. The Kings meanwhile have announced
their target of finishing in the top four of the SA conference of the Super 15.
This is just a clever way of saying they don’t want to come last.
James Greener
14th December
2012.
