Public service delivery

Anti-business, Central planning, Competitiveness, Corruption, Credit risk ratings, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Economic Reconstruction and Recovery Plan, Expropriation without compensation, Job creation and unemployment, Land ownership, Lockdown, Municipal efficiency, Public service delivery

Neither Red Riding Hood, nor Tito Mboweni believes CR’s statements

Johannes Wessels
@johannesEOSA1

The statements of the government and the ANC are as unrealistic as the famous stories of Baron von Münchausen: both are so far from reality that they belong to the genre of heroic fantasy. However, the differences are also glaring. Von Münchausen’s tales are creative untruths, entertaining its hearers because of the skilful transition from reality to absurdity. The ANC’s untruths are serious policy statements, parading absurdity as real truth.

Whereas Von Münchausen’s tales emanate from a witty brain, the ANC’s tales emerge from an institutionally entrenched delusional disorder.

The very first paragraphs of the January 8 declaration suggested the following reality:

“The January 8th Statement… gives inspiration and encouragement…

“The people of this country have entrusted the ANC with the responsibility to… building a better life for all. Over the course of its history, the ANC has lived up to this responsibility.

“In government, the ANC led the reconstruction of our society from the ashes of apartheid misrule.

“Prior to the onset of the global financial crisis, our policies contributed to the revival of our economy, the creation of millions of new jobs, the stabilisation of our public finances and the reduction of poverty.

“(T)hese achievements earned the ANC the confidence and trust of the South African people.”

Really?

JSE’s head of equities voices his despair

The ANC has lived up to the responsibility of a better life for all: not even Red Riding Hood will believe that.
The government has stabilised public finances! Not even Tito Mboweni believes that (and if he does, Fitch, S&P and Moodeys don’t).

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Anti-business, Central planning, Company tax, Corruption, Crime against business, Culture and development, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Job creation and unemployment, Lockdown, Municipal efficiency, Municipal legislative compliance, Public service delivery, Small and medium enterprises (SMEs), State Capture

Is it right to pay tax when clean and safe hands are missing at the till?

Johannes Wessels (@johannesEOSA1)

SARS commissioner Edward Kieswetter’s biggest headache is not the gaping R300 billion crater in tax income this financial year or the growing Everest of assessed losses for companies that will impact negatively on CIT for years to come. His biggest problem is how to convince taxpayers to sustain a government that under the pretext of “a better life for all” has served up a toxic mix of corruption, wastage, mismanagement and anti-growth policies.

In addition, the very same government has doggedly pursued a lockdown strategy not underpinned by much logic that could yield any outcome other than a severe economic disaster with long term humanitarian effects. These effects include shortened lifespans, poverty related deaths, and deaths from medical conditions the government deemed non-essential. The toll of this inept strategy will in all likelihood dwarf the real Covid 19 death toll.

Lockdown has mowed down millions of jobs and several hundred thousand businesses. Those that survived have been severely crippled: they have a radically reduced income, have run up losses or have achieved less than half their previous taxable income.

One recalls the words of Saint Augustine, bishop of Hippo Regius in North Africa, whose theology and philosophy influenced ancient as well as modern thought: “Without justice, what are kingdoms but great bands of robbers?”

Tax compliance in a lockdown context

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Anti-business, Company tax, Cooperatives, Corruption, Crime against business, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Informal businesses, Municipal efficiency, National Gazelles Programme, Personal services, Public service delivery, Real estate services, SME, Tourism & hospitality services, Township enterprises

Sin tax to plug the hole in SARS coffer: the government laying the table for a Boston tea party?

Johannes Wessels
@johannesEOSA1

The prolonged lock-down has been a roaring success: not in enabling the public health system with “sufficient beds, ventilators and staff” for the inevitable “Covid-peak”, but in empowering organised crime syndicates.

Not only did the ban on the transportation and sale of liquor and cigarettes provide an unprecedented window of opportunity for already existing smuggling networks to strengthen their production and supply chain networks, they were wholeheartedly supported by the government to expand their client base exponentially.

The government by decree stopped the legal trade in liquor and cigarettes, effectively providing a protected oligopoly for the smuggling networks. Since there was no competition, they hiked their prices. That saw:

cigarette cartons that would cost around R450 before lock-down selling at anything between R1 500 to R2 000;
Gordons Gin selling at four times the pre-lockdown price, and
A litre red Robertson box-wine fetching R1 400, easily beating some of the prices achieved by top wines at the Nederburg Auction.

Patel hounded Dischem, but the smugglers, spazas & tenderpreneurs were the price hikers

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Anti-business, Black economic empowerment (BEE), Central planning, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise friendly environment, Free State, Job creation and unemployment, Limpopo, Northern Cape, Public service delivery, Small towns, Small, medium and micro-sized enterprises (SMMEs), SME, Sole proprietors, Spending power (wealth/poverty), State Owned Enterprises (SOEs), Western Cape

GDP shrinkage of 12%: It’s not the virus, but the lock-down, stupid!

Johannes Wessels (@johannesEOSA1) & Mike Schüssler (@mikeschussler)

At the end of the initial 3 weeks lock-down a GDP decline of about 5% was considered as quite a catastrophic outcome. Even at that level, it was considered worth the price since delaying the spread of the Covid 19 virus would give a window of opportunity for the health sector to get beds, ventilators and care protocols in place for the spike that would inevitably come.

The minister of trade and industry (dti), Ebrahim Patel, however dismissed the negative projections of economic shrinkage as mere “thumb-sucking”.

After prolonging the hard lock-down with just a gradual easing to level 4 to end May, the growing queues of the hungry waiting for food parcels, the increase in the claims from the unemployment insurance fund and the drastic shrinking of the state’s purse, would make a 5% decline in GDP a dream outcome.

The GDP figures for Q1 2020 will only be known end June. Data from other countries indicate that those whose governments had opted for a hard lock-down are in for excessive economic damage.

Change in GDP trend is the difference between growth in 2019 and 2020 1^st quarters, implying that the Philippines that experienced a change of -6% went from 5.9% GDP growth in Q1 2019 to -0.1% in Q1 2020. This chart reveals the following:

Countries with a hard lock-down that kept only essential services and providers open, saw an average decline of 5,2% in GDP trend.

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Accelerated and Shared Growth Initiative for South Africa (ASGISA), Black economic empowerment (BEE), ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Emigration/Immigration, Expropriation without compensation, Marxist-Leninist ideology, Productive knowledge, Public service delivery, State Owned Enterprises (SOEs)

Ten wasted years: Preferring “Dumbing Down” to “Productive Knowledge”

Johannes Wessels

@johannesEOSA1

TEN WASTED YEARS… Tito Mboweni’s colloquium “to think outside the box about economic growth” is akin to closing the stable door after the racehorse had not only bolted, but already won a race elsewhere. Scavenging in the ANC dustbin of rejected advice, Mboweni picked Harvard economist Ricardo Hausmann as advisor, knowing well Hausmann’s advice on productive knowledge had been flatly ignored by the ANC Government since 2008.

Hausmann considers productive knowledge as the key factor that separates successful countries from unsuccessful ones. A lack of productive knowledge therefore retards economic growth and development.

From 1990 to 2003 South Africa lost 7% of its professionally qualified people, predominantly high-skilled whites. After some stability that came during the high growth Mbeki-Manuel years the exodus was re-triggered by the growing ineptitude of an administration that radically transformed departments and state-owned enterprises (SOEs) into little more than facades.

The police service, SAA, Transnet, the NPA and municipalities are some examples where cadre deployment trumped productive knowledge. The result:

At township level, the disgruntled resorted to service protests.
At professional level, they packed their bags and headed to the emigration counter with highly skilled blacks now outnumbering their white counterparts, bound in solidarity by a deep non-racial gatvolheid in the slide into corruption, lawlessness, dismal public services and the undermining of property rights.
At investor level, South African businessmen have emigrated through FDI: fixed investment by South Africans abroad exceed fixed investments lured to our shores.

Make BEE growth compatible

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Business and economic indexes, Competitiveness, Credit risk ratings, Crime against business, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise research, data and statistics, Expropriation without compensation, Job creation and unemployment, Land reform, Property rights, Public service delivery

Government sabotages growth through property rights uncertainties and ignoring Moody’s warning shots

The heated debate between proponents of property protection and those in favour of confiscation (expropriation without compensation) has been characterised by a lack of data and waged mainly on ideological and emotional arguments. The lack of an acceptable factual basis is evident in:

Government, AgriSA and Afriforum operating with different figures for categorising land ownership according to race;
The number of farms on the list for the first round of expropriation. (If there was such a list).
Uncertainty about the number of recipients of free subsidy houses (where transfer of title has not taken place) and how these properties should be counted.
Arguments that expropriation would kill the economy simply being countered with promises that the economy would not be harmed.

At the public consultations the facts applied were almost always derived from (and limited to) local situations and narratives with no or little attention to systemic information. EOSA therefore analysed last year’s WEF’s Global Competitiveness Index (as part of our enterprise research on relevant data and statistics) to assess whether there are some global indicators to inform the debate. Several significant correlations are evident from the WEF data:

Highly competitive countries have strong protection of property rights.
High per capita GDP goes hand-in-hand with property rights.
Poor policing and high cost of crime for businesses are not characteristics of highly competitive countries.

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