‘ALOE, ‘ALOE. WHERE’S THE MONEY GONE THEN?

The fact that the government is very short of money is rather well known and so consumers are not much surprised that their little luxuries like food, fuel and fun will suffer from increased taxes. The numbers are on the government’s side when it comes to the possibility of a tax revolt, however. Only 14m people are registered tax payers and almost half of these have income below the tax threshold. The Budget Review reveals that 40% of the income tax is paid by just 282 619 individual taxpayers. Presumably if even half this number did all gather in Pretoria and march on the Union Buildings it would cause a newsworthy event. But the way the voting system works they would cause barely a blip on the election results. And don’t expect the 43m or so non-taxpayers to be sympathetic!

Just what did those poor aloes do to deserve being be lugged into parliament on Wednesday to listen to Minister Tito Mboweni’s maiden budget speech? The poor plants were described as resilient, a word used by the press to describe the budget itself, but exactly what this means is not explained. We will need some report on their health in months to come to see if they survived the experience. The speech was full of some very wishful thinking about heroic increases in tax collection in the future. On average, SARS currently collects just R106bn a month. However, to attain the target for Fiscal 2019, ending in just over two months’ time, Tito and his aloes need to collect a huge rate of  R175bn a month. The all-time record monthly tax take of R161m was set in December 2018. Even if the newly launched Illicit Economy Unit manages to track down every smuggled cigarette and collect the duty owing the deficit is going to overshoot.

The budgeted monthly average collection in Fiscal 2020 is pegged at R132bn and even new and increased imposts for that year, like the contentious Carbon Tax, the R65.84 duty on a bottle of whisky and an extra 64 cents duty on a cigar might not be enough. As for the success of his mooted gesture of goodwill on behalf of MPs and other senior state executives to forego a salary increase – well let’s see how that flies. Austerity is not a team sport enjoyed by public servants used to perks and prizes.  In fact, all of those who in one way or another feed at the trough of public money and who have been targeted for a spot of belt-tightening are already starting to whine and shake their heads and fists. Perhaps the most intriguing part about the government at last trimming their wages bill is that much of money saved will be used to keep the lights on by supporting Eskom. When and if that gets widely recognised small wars could break out between government staff and Eskom employees. Watch this space.

Now SAA will also be split into three parts, and like the similar idea about Eskom, this plan has triggered complaints from those who fear their little sinecure could be uncovered and they will be required to deliver for their salary.  Unfortunately, the argument about and execution of this proposed rationalisation of the national airline will probably take ages and certainly cost money. Whether or not this is the right remedy should not anyway be something for our government to decide upon. There is already ample evidence that they are hopeless at running most things – in particular, they are lethally bad when it comes to potentially profitable enterprises. Just sell the darn thing now and let the buyer decide if there’s any way to revive the albatross. And while they are about it, sell the airports too. ACSA has a suspiciously race based share holder profile dominated by the state and seems to charge a great deal for allowing a plane to land.

As things stand in PE it seems as if the Proteas and Sri Lanka once again won’t need a fifth day or even a fourth to embarrass one of the sides in the second and final test match.   It’s a shame. Durban is getting excited about getting into Kings Park tomorrow to watch the Sharks’ opening home match of the season. The talk at the bowling club bar this evening will be all about the catering arrangements tomorrow with the early kick-off suggesting tea and scones rather than boerie and Hansa.

James Greener

Friday 22^nd February 2019

NO ONE SEEMS THAT ANGRY

Market prices of shares, debt and the currency all fell quite sharply as clear signs that the Eskom developments were very very disappointing. Did President Cyril not have a small twinge of déjà vu yesterday when he set up a “special cabinet committee to deal with the Eskom crisis”. The last time that our national power utility switched out the lights he (then just V-P) was given the job of heading a “war room” to find out what was happening. Obviously, that plan failed to work, and so why it should do so now is unclear. The rest of us know that the problem is simply that there is insufficient electrical engineering knowledge and experience anywhere in the command chain that runs from the chap on the gate at the power station right up to the highest office in the land. Somewhere near the top of this pyramid clings Chairman Jabu Mabuza who seems to be a genial sort of chap with a fine collection of hats. But despite the Wikipedia description of him as an entrepreneur and investor, like most of us, he appears to have almost no clue about running a crucial element of an industrial economy. The most puzzling thing is our collective attitude of complacent resignation at this state of affairs.  The jokes on the internet about the power cuts seem to outnumber the sober assessments that the government’s discriminatory race-based policies are the root cause of this and indeed probably most of our woes.

A superficial analysis of just exactly what the country gains from the foreign travel undertaken by bureaucrats and politicians prompts the idea that everyone fitting this description should be required to surrender their passport immediately. Anyone contemplating an overseas holiday can retrieve the document for the duration of the vacation but only after they have proved that no state funds would be used for the jaunt.  The reasoning is not just to save (lots) of travel allowances but to be sanguine about the value to the nation of sending public servants either to sell or buy stuff. This also includes meetings and conferences, either as a speaker or a listener. Many of our representatives and delegates them are declared communists supposedly hostile to people making a profit, some are embarrassingly unkempt and dishevelled and almost all of them seem oblivious to what is actually taking place in their homeland or indeed their host country. It is time to end shopping sprees dressed up as fact-finding folderol.  Almost no one overseas will miss the South Africans some of whom have an unnatural interest in Fanta[1] while back home we shall watch with interest who still comes to visit us and why.

Meanwhile despite the much-trumpeted extradition treaty agreed with the UAE last year it seems that the police need no longer hang around Joburg International waiting for the incoming Dubai flights. Astonishingly the cases and allegations against the Gupta brothers have now evaporated. So still we wait for the arrest of someone – anyone—who stole all our money.

In those university towns where water saving is currently not a priority, it is puzzling that so little use is made of water cannon to clear the revolting students off the streets. Skilfully directed it could be used to flush out for arrest those individuals whose behaviour has been particularly vile. The insolent individual on a Durban campus this week who called his vice-chancellor a murderer should not escape punishment and the prospect of a career-affecting criminal record for doing so.

Unless one is playing close attention, one may have missed the changeover of sub-continental cricket teams. The Sri Lankans are now playing a test here in Durban and it looks as if once again tickets for day 5 will be useless.  The SuperRugby tournament kicks off today and runs until a final in July. Two months later it’s the World Cup in Japan.  Whew. It will be hard to find a place at the bar of the bowling club this evening as it is also home to many of the Duzi paddlers who now have just one more day to reach the finish. These lads and lasses are terrifyingly fit and thirsty too.

James Greener

Friday 15^th February 2019

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[1] Slang for bribe

SLEEP OVER AT THE NATIONAL ASSEMBLY

While there surely are little corners of the markets where investors are either delighted at their skill or fed up with their advisor, the overall market indices have not yet confirmed that the bear is finished. There are more reasons to be defensive and conservative than to be fully invested in risk assets. An interesting aspect of the situation is that in both America and Europe there are huge potentially market-disruptive events taking place. America has a President with a unique attitude and style while Europeans are confused about whether having more government is a good or a bad thing. On both sides of the pond those who simply ignore politics and get on with what they do best seem to be thriving.

It seems to be dawning on President Cyril that there are far too many felons with access to the national petty cash box. But the marvellous opportunity presented by the SONA event in Cape Town last night to round up hundreds of them was wasted. The new prosecuting unit is still just on his wish list and so the police were untroubled. Unfortunately, even the fashion police who ought to have been at work were also absent. It’s a mystery why this event on the parliamentary calendar causes the guests to behave and dress like teenagers off to a sleepover at a friend’s house. This year there wasn’t even the promise of a midnight feast although the A-list had been to a lavish lunch beforehand so undoubtedly there were sleepy heads in the chamber.

Those who are fretting that splitting Eskom into three units will cause job losses, probably need not worry. Although Eskom does need a drastic prune of the head count as well as a professional and long-term approach to the supply and pricing of its coal stocks, the fact is that neither is likely. Unless of course management of all three divisions is entrusted predominantly to competent engineers. The very fortuitously timed announcement by Total that an exploratory well 175km offshore Knysna has encountered possibly substantial reserves of gas and condensate has been immediately translated by an accountant into a very exciting R1 trillion windfall. At that distance offshore and in as yet unspecified water depth the only currently bankable certainty about this discovery is the delightful name of “Brulpadda” (= bull frog)

COSATU’s General Secretary has come up with a novel idea. He says that his organisation is worried that the ANC might put up tainted candidates in the forthcoming general election process. He was even as outspoken as to name two of the current scandals (VBS bank and Bosasa) and a few people who “have been fingered in wrongdoing” and has asked them to recuse themselves from the lists. He believes that the ANC has enough capable and honest people in its ranks and has no need to (recycle) “compromised tainted characters”. While some may be sceptical of this claim, it would be wonderful if all the 287 political parties so far registered to contest the elections cleansed its lists in this way. Having a government comprised of capable and honest folk sounds great but are there really enough politicians like this  to make up even a modest cabinet of say a dozen?  Also worrying is the length of the ballot form needed to offer so many parties.

Anyone still anxious about South Africa slipping down the rankings in all the important stuff like education, health, ease of doing business etc must be relieved that we are still right up there when it comes to conspicuous consumption. The local dealership for the Pagani Huayra Roadster won’t reveal its price nor the names of the two local buyers. Speculation is that they are either politically placed or prophets. Who else has the protection required to drive at 337 km/hr?

The national cricket selectors seem to be spoiled for choice and the manufacturer of Proteas caps is being kept busy. Our lads’ T20 wins against Pakistan were not convincing, but it really is a dreadful format of the game. Having family living overseas injects a bit more interest in the Six Nations rugby for me especially when the Springbok Sevens are battling, and a local official thought Super Rugby and Super Heroes had a nice ring about it.

James Greener

Friday 8^th February 2019