When everything is stripped away, controlling the spread of
this nasty COVID-19 infection comes down simply to keeping far away from
someone else who is infected. This is made difficult because it is not obvious
who is infected. Therefore, we have been told to practice so-called social
distancing – or perhaps that should be anti-social distancing – and cultivate a
fanatical habit of washing hands and not touching your face.
Governments around the world have decided that their
citizens will find these simple things too hard to do without coercion and so
the lockdown phenomenon has entered our lives and lexicons. Unfortunately, here
on the southern tip we have a bureaucracy just itching to crank up its control
of the population and the result has been heavily armed and unsympathetic
forces harassing and even murdering desperate and hungry people. The measures
have been extreme and the bureaucracy heavy. We now have a schedule of 5 levels
of the infectability of economic activity decided upon by a committee. But
fortunately for our sanity, the ludicrous is also plentiful. Take for example
Minister Nkosazana Dlamini-Zuma (NDZ for
short and the ex-wife of a previous president) explicitly banning the sale of
“cooked hot food” after her counterpart in the trade and industry department,
Ebrahim Patel discovered to his chagrin that some stores were selling
rotisserie chickens and warm sausage rolls and pies. NDZ is minister of
Co-operative Governance and Traditional Affairs. Not a word about food in that
portfolio, although KFC is now pretty much a traditional affair in SA.
Out in the
world of markets and prices, the oil price is plummeting for a number of
reasons partly to do with the virus and the expected global economic slowdown
(when did you last buy petrol?) and partly because big oil producers are having
a price war. Commodity Futures are a popular way for participants to gain
exposure to these markets and this week certain oil contracts began to trade at
a negative price. That is the sellers of the contracts were not only getting
out of their positions, they were paying the buyers to do so! Those buyers are
brave or else they are actually oil consumers, because if not, early next month
a tanker will pitch up at their front door enquiring where to offload several
thousands of barrels of crude oil. Which they will have to pay for in full.
Messy.
The most
significant and important news of the week was the announcement by President
Cyril of an economic rescue package totalling half a trillion rands. To put
this in context the total annual government income is currently around just
three times that, so this package isn’t trivial. It is not yet clear where this
money will come from. There was some eyebrow raising mumbling about
international institutions without dwelling on the dislike that the communists
in government usually have for these money lenders and their usual loan conditions.
The distressing thing though is that during this harrowing time for all South
Africans, and despite the last decade having shown that this racist policy does
not work, the state continues to insist that aid distributions will adhere to
BEE conditions. But the biggest problem with this package is that the thieves who
have already brazenly stolen so much public money are still at large and not in
prison. They are already at work dipping into aid food parcels and hoarding emergency
water supply tanks. Citing urgency and novelty of the situation suggests that even
the flimsiest of financial controls are unlikely to be exercised over these
funds.
So, here’s an
idea. Half a trillion rand is almost exactly what the state expects to collect
in personal income tax this fiscal year. So why not simply abolish all personal
income tax for the next 12 months? That is, leave that money in the public
domain without moving it through government agencies. This is exactly the cash
flow intended by President Cyril, but without any chance of corruption and zero
state interference. The income shortfall in the National Treasury will force
the trimming of the state payroll and encourage migration to the private sector
and self-employment.
Sushi,
however, is still for sale in some food stores. But its not hot and cooked. So that’s
OK.
James
Greener
Friday 24th
April 2020. Day 29 of Stage 5 Lockdown
