LET THE LOOTING CONTINUE

It’s a dreadful shock to realise that one’s country has become another place where the leader’s sole concern is his personal enrichment. All those aspirations which many of us truly have for a land of equality of opportunity and a surplus that can be used to support the indigent, don’t even cross Number One’s mind as he ignores wisdom, convention and decency and seeks affirmation and support from a growing circle of thugs and sycophants. Last night’s reshuffle has significantly reduced the education, skill and experience levels of the Cabinet and introduced even more known fraudsters and incompetents. Pravin Gordhan’s axing will surprise no one, as its widely thought that it was he alone who stood in the way of JZ’s looting of the fiscus and the banking needs of the president’s dubious foreign-born allies

Zuma supporters will be delighted with the developments because they have been told it will substantially improve access to the two benefits that were supposed to accrue from their long-promised freedom. Namely, land and wealth. As we have pointed out numerous times there is nothing in the Treasury vaults but moths and a huge ledger of money owed. And much of that cash to be repaid is owed to the savers and pensioners of this country – only a few of whom might be called monopoly capitalists. Just what the new compliant Minister of Finance is expected to do for the expectant millions is a mystery. Any expenditure he redirects from its budgeted destination will trigger howls of anguish. But Zuma has shown he will not hear them. Note the new Public Protector’s complaint that she can’t possibly be expected to do what her predecessor managed unless her allocation from Treasury is increased fivefold. The land question is equally unclear with not only the Constitution but also the existing ownership records revealing inconvenient realities.

The good(ish) news is that the rand’s “collapse” following the latest clowning episode has so far been gentler that the screaming headlines and forecasters would suggest. Indeed, it is still stronger than it was at the end of last year. Clearly there are steady buyers of our currency who use these panic-induced dips as buying opportunities. It would be nice to know who they are and why are they doing it.

Meanwhile all the usual shenanigans of a state with far too much interest in and power over the rest of us, continue. The SABC, which by its own admission is scaring off audiences and advertisers was handed a new board of directors.  But then another key-board thumper insisted that they all be “vetted” which sounds like a painful process. Mind you if it resulted in a team of people interested and competent in broadcasting that would be a good thing.

April Fool’s Day is very close so maybe one needs to treat with care the story that “The Red Tape Impact Assessment Bill” is a real thing. The compilers of that piece of legislation are obviously not students of irony. Even weirder is that big business is complaining that the Act is too biased in favour of small business. Surely the path to be followed here is to prune and cull all those existing Acts that tell businesses and people of every size and kind how to do things. In similar vein is the peevish observation by Oxfam that the Big Banks are still using tax havens. The implication is that if they didn’t, more tax would be paid to governments who would spend that money better than the shareholders and staff of those banks would. This is a totally unproven hypothesis which people are increasingly rejecting. The Brexit and Trump votes were cast by people rejecting extra layers of bureaucracy and know-what’s-best politicians.

New Zealand cricket fans must understand that our delight at seeing the rain falling was just that it’s not something we see much of here and had nothing to do with the 1-0 Test Series victory. We also haven’t seen many Ferrari GP wins so there was more delight there from the antipodes. I shall not bring up The Lions vs Sharks pairing at Ellis Park at the bowling club bar this evening in case it rouses passions, however I shall put my oar in (as it were) for a Cambridge victory in Sunday’s Boat Race. One of televised sport’s great pleasures is to introduce a newcomer to this amazing test of fitness and stamina that takes place under grey skies and on a brown river. It’s very hard to answer their inevitable question: “Why?”

James Greener

Friday 31^st March 2017

DISQUALIFIED

Even as we South Africans look about in wonderment at the way things appear to be disintegrating, our currency shows unmistakably that somebody loves us. Or loves our currency at least. The rand just keeps on steadily getting stronger. Pretty soon northern hemisphere summer holidays are going to be affordable. Pleasing yet astonishing. Share and bond market prices indicate that it is the latter which is attracting the greater interest. Bond prices are up a very creditable 5% in the last few months. Obviously, the threat of a downgrade to “junk” (aka non-investment grade) status, which theoretically ought to be bad for bond prices, is being ignored. Libertarians looking for something the government has yet to find a way to monitor and control have noted that Krugerrands are now priced around R17 000 each after being well above R20 000 a year ago.

Maybe from overseas our conversion into a socialist nanny state where the government wants to take every decision for us does not seem unusual. But in a nation where there is still a great deal of pioneer spirit and disdain for authority the clammy hand of control is tightening its grip. The most alarming facet of this bureaucratic overload is the damage and brake it puts on the wealth-creating commercial activities. The hassle and cost of getting simple things done like collecting a container from the docks, buying foreign exchange for a holiday and getting paid by a government department for goods and services rendered are stifling. The near total lack of understanding of the commercial impact of reducing the freeway (for which a toll has been paid) to a single lane on a long weekend Friday is deeply frustrating and causes far more danger than will ever be controlled by reducing all speed limit by 10kph. Or banning liquor advertisements. If you think that private company CPS’s charge to distribute the social grants is outrageous (which it probably is) just wait until the state creates the machinery to do it.

And each one of these intrusions on our lives necessitates the creation of yet another organisation, institute, association, foundation, trust or council which will watch over us, beg from us, threaten us, control and count us. Each one laboriously crafts a name usually beginning with the letters SA so we are now drowning is a sea of acronyms. Faint thanks to the reader (pedant!) who pointed out that unless the letters make up a pronounceable word, the proper term ought to be initialism.

SAQA, an outfit which runs the National Learners Records Database (NLRD naturally!),  issued a communique recently pointing out what many already know to their cost. Which is that there are more qualified people in SA than there are jobs for them. This lamentable state of affairs does however suggest a partial solution to the university funding crisis. Since there are too many graduates, simply raise the academic barrier to entry of the various degrees until the output matches demand. This process must of course be accompanied by an increase in technical training facilities which should be far cheaper per capita than a place among the dreaming spires.

Apparently it costs the SABC R650m to open its doors every month and the broadcaster is complaining that it has run out of money. Only 12% of SABC’s income is from the TV licence fees. This indicates that there are probably fewer than about 4m licence holders which seems very low. Especially when compared to the 14 million people in SA who have “smart” phones and spend every waking minute poring over their tiny screens. This illustrates that the nearly free-to-air broadcast model is woefully out of date and the assets of that dinosaur ought to be put up for sale to save us all further pain.

Reportedly it’s dawning on the SANZAR suits that the Super 18 is not fit for purpose, which presumably is to entertain fans and develop players who can give the northern hemisphere sides a walloping every time. There was a time when this tournament was claimed to be the premier global event and producing far better rugby than even what was then the Five Nations. It’s not delivering that now, especially here on the southern tip. So the Bafana/Senegal match was rigged.  How can you tell? The players seem to fall down a lot even when untouched.

Go for it Proteas!

James Greener

Friday 24^th March 2017

IT’S A DONE DEAL

The point to keep in mind when trying to make sense of the Social Grants Payments debacle is that the privately-owned Cash Paymaster Services is the only game in town. They have grown up alongside the huge increase in beneficiary numbers and are alone in having the institutional memory and in-place capacity needed to tackle this mammoth monthly task. They are not going to share that with any competitor – even SASSA itself. Minister Bathabile Dlamini and the top people in her ministry clearly have known this for some time. Indeed, they appear to have been comfortable with it. They did nothing until way too late to seek alternatives, and even that was very half-hearted. She sucker-punched everyone including parliament and the Constitutional Court into believing there was an alternative to the reviled CPS and that her department was on top of a change over. But it was simply not true and so with just days until the next grant distribution date there is absolutely no alternative. And there probably won’t be for a very long time.

Aside from the beneficiaries, who also wins from the renewal of the contract? CPS themselves will have in mind a substantial fee increase. The scent of all this money will attracted clouds of flies looking for a place to land on the trough. And at least one asset manager has hung onto his Net1 shares and is struggling to hide his satisfaction behind claims of good analysis. It is alarming however that top officials in the Department of Social Development have resigned or taken sick leave. Presumably the learned judges of the Con Court are none too pleased with having been used to hand down opinions that were always going to be ignored but everyone should note that Number One himself this week expressed total confidence in Minister Dlamini, so she might now be bullet-proof. The biggest takeaway from this event however is that this social grant handout program is now all that stands between far too many citizens and starvation so that no government will be able to prune it without triggering a terrible backlash.

The only way out of this problem is for the country to enjoy a huge economic resurgence which gets everyone back to work and gives families opportunity to earn far more than the hand-outs provide. Unfortunately, this week’s GDP growth number for 2016 – a shocking but not unexpected 0.3%p.a. – indicates that such a resurgence is a very long way off. Optimists claim that there are flickers of good news to be found in the thousands of numbers provided by Stats SA in their quarterly GDP publication but they are faint. Also fading is confidence in the quality of the information being provided by official documents such as this. Some of us who have made a living from “interpreting” data feel uneasy with the look and feel of the numbers data which, given their provenance, should move only slowly from one quarter to the next and change direction rarely. For example, what were the major changes in manufacturing activity that could deliver four consecutive quarterly growth figures for the sector of 0.6%, 7.6%, -3.3% and -3.1%. It seems improbable.

Highly probable, however, is that more and more CVs will have a line or two devoted to the candidate’s tenure as a director at a State-Owned Enterprise. There must be few well-connected young men and women who haven’t got their knees under a polished piece of expensive hardwood boardroom furniture in recent years. Only to be turfed out together with some senior executives when the wheels come off their particular vehicle. Entire boards are fired from one social media message to the next. The hiring part often takes far longer and a list of SOEs with acting Chief Executives is quite long. Yet more reason to privatise all these functions the state believes it needs to do for us.

Is there a glimpse of something special from Ferrari from the start of season testing sessions? Testy personal relations seem still to be playing out in the Mercedes camp though. The new 2017 liveries are nice and distinctive however. Meanwhile it’s unpleasant seeing umpires wearing gloves on a cricket field. If a nation can’t provide somewhere warmer to play a test they should stop playing the game!

James Greener

Friday 10^th March 2017

I’m going to listen to music in Wakkerstroom next Friday so the tide will be out.