Category: Lockdown

Anti-business, Black economic empowerment (BEE), Black-owned businesses, Buying local, Central planning, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Entrepreneurial space, Job creation and unemployment, Lockdown, Market economy, Marxist-Leninist ideology, Opportunity tax, Preferential procurement, Township enterprises

Ramaphosa’s bold plan (1): Is ‘buying local’ BEE disguised by a face mask?

Johannes Wessels
@johannesEOSA1

If Ramaphosa’s bold plan to restart the economy was a film, the premiere already proved it’s not an ‘out-of-the-box’ blockbuster that will rake in Oscars for economic growth and sustainable job creation. Growth through state-led infrastructure development XXI is a lame sequel fit for an infamous Razzie award.

Like its predecessor – the lengthy National Development Plan – the Economic Reconstruction & Recovery Plan (ERRP) is a sure box office flop.

The ERRP announced by the president after lengthy consultation processes with big business and big labour states “Non-implementation of the ERRP could lead to loss of economic capacity, including collapse of the supply capacity, consumer and business confidence, the labour market and increased vulnerability of the poor. The overall plan aims to mitigate these risks”.

This script suggests its authors live in a make-believe reality: South Africans, whether tax payers or the growing number of unemployed, know consumer and business confidence and employment are not waiting for collapse through the non-implementation of a plan. It has collapsed already and was meticulously crafted by the very same government now purporting to be capable of getting the economy firing on all cylinders again.

There is a hidden sub-text as well: Covid 19 was the excuse to gain more arbitrary power and programs to recover from the lockdown devastation are aimed at cementing these arbitrary powers.

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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, Central planning, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Health services, Job creation and unemployment, Lockdown

Thanks to the lockdown you are much poorer and deeper in debt (also the wasteful debts government incurred)

Johannes Wessels (@johannesEOSA1)

South Africa’s economic growth rate has dropped through the floor: the lockdown economy has shrunk in 2020 Q2 by 51% (Q-on-Q annualised). Whilst the third quarter ending 30 September will register substantial growth, it will not bring the country back to where it was prior to lockdown. As cause (lockdown) and consequence (massive unemployment, poverty and the destruction of existing wealth and the means to generate wealth, i.e. businesses) of this economic meltdown mature, the future bill for yesterday’s stupidity will grow exponentially.

And those that will have to foot the bill will be much poorer with SA fast approaching the door to leave the club of upper middle-income countries to join the ranks of the lower middle-income countries.

The government has been blaming Covid 19 (this time apartheid and colonialism cannot carry the can), talking about “unprecedented economic consequences of the pandemic”. Pres. Ramaphosa refers to the economic effects of the global coronavirus pandemic”.  

And Dlamini-Zuma remains on record (National Council of Provinces, 23 June) that the government was “absolutely convinced the Covid pandemic – and not the lock-down measures was causing the economic damage”.

That is a lie and StatsSA is correct with their description attributing the decline to “the impact of the Covid 19 lockdown restrictions”.

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Anti-business, Central planning, Corruption, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Investment/Divestment, Lockdown

Business for Ending Lockdown (B4EL) rejects continued state of disaster

Business for Ending Lockdown (B4EL) notes President Ramaphosa’s announcement of a move to lockdown level 2 commencing 17 August. While the further relaxing of restrictions is an improvement compared to remaining at level 3, B4EL will not thank the government for giving back to the people of South Africa that which belongs to them.

B4EL is a campaign to completely end lockdown. The campaign was founded this week (The Enterprise Observatory of SA is one of the founding members). It is supported by several of the most well-known and largest business organisations, already counting almost 60 000 businesses. For more information, see www.endlockdown.co.za.

The president’s announcement only underscores the fact that the lockdown remains unnecessary, arbitrary, and, by the president’s own admission, fraught with corruption.

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Anti-business, Corruption, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Enterprise profitability, Lockdown, Spending power (wealth/poverty), Tourism & hospitality services

The Vandals are governing

In his weekly letter from the president’s desk (13 April), pres. Ramaphosa lamented the vandalism that had caused the demolition of schools, describing it as “a great indictment of our society”. He pointed to the despicable implications: “When lock-down is lifted and learning resumes, thousands of our children will have no school to return to, depriving them of the right to education…”

The irony of his words is that the government is currently the vandal-in-chief. The damage done to schools in the president’s lament of four months ago is dwarfed into insignificance when compared to the destruction its lock-down strategy is inflicting on South Africans.

The sheer magnitude of their destruction boggles the mind. They have:

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Corruption, Eastern Cape, Economic freedom, ECONOMIC GROWTH/ANTI-GROWTH FACTORS, Health services, Lockdown

Lock-down is international “worst practice” but Ramaphosa (and key business leaders) maintain it’s the solution

Day 132 after registering the first 100 Covid infections in SA made it clear how unsuccessful the lock-down has been: South Africa’s number of Covid infections/ 10 000 of the population despite the world’s harshest lock-down with a curfew, mandatory face masks and an alcohol ban passed that of a country that has never implemented lock-down, never made face masks mandatory and would have continued to buy South African wines were it not for the SA government that had banned the transport (and therefore export) of wine. (Figure 1)

Like that legendary village in Gaul ( home of Asterix and Obelix) held out against the might of Caesar’s Rome to maintain local culture, Sweden kept the constitutionally protected rights of its citizens intact (freedom to move, associate and work) whilst most of the world capitulated with lock-down measures before the might of fear brought about by flawed modelling of the Covid threat.

South Africa’s government early on sacrificed these rights, transforming its citizens to subjects, all “to ensure that the infection curve would be flattened to get ready for the Covid storm”. Figure 1 clearly shows how the curve was flattened, but today we know that it was not utilised to ensure Covid-ready hospitals with well-motivated staff serving sufficient beds in ICUs and care centres equipped with ventilators and required equipment.

The BBC had shown the world that the “flattening of the curve” was not used for that, at least not in the Eastern Cape.  The Minister of Health, Zweli Mkhize, however disputed the BBC findings, stating that, apart from the fact that the EC hospitals:

  • should follow medical waste protocols;
  • require more beds;
  • needed more nursing staff;
  • had to procure more ventilators, and
  • should get rid of blood on the floor and the rats,

the province was ready for the Covid crisis.

Easier to exterminate hospital rats than tender rats?

Mkhize made no mention that these problems were probably linked to the government’s continued feeding of the tender rats.

Quicker than what a minibus taxi can skip a traffic light, Andile Ramaphosa of Bosasa fame had convinced FNB to sponsor a R6 million contract to install Perspex shields and sanitise equipment in Gauteng taxis. He claims he is not personally benefiting from the contract awarded to SDI Force (an NGO).

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