Economic review

After the mid-term budget it became clear that the deficit in state income will certainly be funded from an increase in individual tax rates. Our maximum tax rate is not that high compared to especially socialist democracies. The difference between those countries and us is that our average taxpayer receives very little for his tax Rand, given our modest tax base compared to the number of us who draw down social benefits. Certainly the perennial debate must arise as to when we will cross the threshold where non-compliance with tax laws will become so attractive that our Treasury actually collects less.

Furthermore, n a daily basis we are bombarded with examples of losses to corruption and fiscal recklessness (which the latest Auditor-General report places at R46m in irregular spending, and R1.3bn in wasteful spending). What incentive would there be to pay Caesar what is due?

We, together with others in the emerging market group, have long held our breath awaiting a rates hike by the Fed. This appears to be imminent and should have a negative effect on emerging markets.

The elephant in the room, when it comes to policy, is the question whether inequality can be eliminated under capitalism as Africa knows it. The current global trade system does not allocate return in the same manner as it allocates costs to participants. We are now seeing the British and probably the Americans, shifting towards protectionism whereas Africa was required to open its economies to the global financial framework with the promise that this will create opportunities for growth. If this shift translates into policy, Africa would have missed the bus the first time around and now.

Business review

Our Cabinet has approved the establishment of a special unit to tackle the state backlogs in paying suppliers. This time action against those who do not comply is promised. One does not want to be sceptical, but I have seen similar exercises before with little tangible result.

Last year SAA made a R1.5bn loss; for the first 6 months of this year it made aR2bn loss. Now we are told that our national airline will recapitalise from within its own balance sheet – without any reliance on the Fiscus. Really?

An oft bandied about statistic is that the US pays the highest CEO salaries (some 2.6 times more than its counterparts abroad) but that South Africa and India pays most, relative to what the society, in which the business is founded, earns. This may sound obscene but the reason for this statistical aberration is the very low earnings of our jobless majority.

Barclays’ economists expect household consumption to rise 0.4% this year and 0.9% next year. It is going to be a tough year for retail.

Wine is great for your health if taken in moderation? The same has now been found to apply to beer: men who had 1 or 2 pints and women who had 1 pint a day, experienced a far greater control over cholesterol levels, compared with those who did not drink at all. Perhaps one should, just to make sure, drink both wine and beer?

The Commission on the Remuneration of Public Office Bearers recommended that all public and political office bearers should not get any salary increases this year. One hopes that the recommendation will be accepted.

The Aarto system of traffic policing has proved disastrous and those subject to the pilot of that scheme, the cities of Johannesburg and Tshwane, want out.

Property review

The National Housing Finance Corporation (NHFC), is a bank which will be formed by our government next year and which will combine the work of itself and two existing financing institutions i.e. the Rural Housing Loan Fund and the National Urban Construction and Housing Agency.

One becomes so involved with developments in property that one tends to lose sight of the larger picture: in a recent article deals with urbanisation the writer opines that integrated urban economies could reshape our economic destiny dramatically if we were to adopt a policy of greater density, instead of the current practice of situating RDP developments on peripheral land utilising unattached houses and individual plots. Such densification would allow for cheaper and better public transport better services and the like. I suspect that those who lead us are driven to provide housing which is affordable and quick, which quick-fix will certainly contribute immensely to challenges that we will experience in future.

Surprisingly, listed property keeps on turning in good results. From a total return perspective, South African listed property, in general, achieved a total return of 9.37%. This is comfortably ahead of the All Share’s 2.21%.

Property24.com has bought out its closest rival Private Property, subject to approvals. Clearly it intends dominating the SA online property search industry.

The Durban municipality has introduced e-payments for rates: http://www.iolproperty.co.za/roller/news/entry/durban_introduces_e_payment_for

Practice review

The International Criminal Court will be investigating the conduct of US soldiers in Afghanistan. One wonders whether this epiphany was caused by the accusation, coming from primarily Africa, that the ICC is partisan in its investigations? The US is not a signatory to the Rome Statute but would be subjected to severe political censure if the ICC finds its soldiers guilty of war crimes.

A would-be practitioner, with a criminal record as long as your arm, applied for admission as an attorney. The Cape Law Society accepted the gentleman’s explanation that his robbery was embarked upon in order to repossess the wealth of the African people, but the court would have none of it. The robbery had taken place two months after South Africa became fully democratic, raising the question why those representing us were not au fait with this date?

Why would one want to do this? Businessman Fana Hlongwana attempted to compel Absa to disclose the reasons for its decision to close his accounts. This led to the bank disclosing that he may have been involved in money-laundering events. Eish.

The latest conference rulings by the Registrar of Deeds may be found at: https://t.co/lopOzmholJ

Clients of ours have become victim to fraudsters who would intercept emails from our practice to team and substitute the contents of our email before on-sending this to the relevant client. This form of fraud is difficult to counter save by insisting on the personal attendance of the client at one’s office and handing a hard copy of deposit details to the client.

Cases

Obligation to build

One often finds developments in which land is sold, subject to a condition that the purchaser builds within a stated period. Failure to do so has been found to not be contrary to the Consumer Protection Act (in that it was said to be unfair) and, in this case, the purchaser was forced to resell to the developer.

Bondev Midrand http://www.saflii.org/za/cases/ZAGPPHC/2016/939.html

Quotables

You can't help getting older, but you dont have to get old.

Burns

Comment

The Oxford Dictionary word of the year is “post-truth”. It indicates that truth has become irrelevant in our understanding of situations. Other similar terms being bandied about are post-Erdogan, post-Brexit, post-Trump and so on. All of these suggest our moving on into an age of uncertainty? Yet, looking back, certainty in the past 20 years has not been the norm.

The Prez says that one cannot eat political power and that those who govern must have economic power also. A part of the division within the ANC is caused by a rift between those who wish to have access to finance and those who desperately want such access placed beyond their reach.

In fact, the aspirations of those in power to hold the purse strings has created a massive backlash from the public and, of late, the State itself. The former can be judged from the massive media coverage that corruption has drawn of late. The latter is interesting: SARS approached the courts to set aside a contract to which created a conflict of interest between its Commisioner Mr Moyane and LTC. ACSA staff have called for an investigation into tender fraud which is said to have become a “daily occurrence” at that institution. Our Deputy Finance Minister has called for leadership that looks beyond its own narrow confines in a system where patronage and corruption had undermined efforts to build a credible government.

The above brings me to Karl Popper, who postulated that an open society is eventually self-correcting in that, as society becomes aware of the misdemeanours by those who govern, that society would eventually replace the incumbent government. Ours is defined as an open society in that we have constitutional rule, free media, an act of civil society, state agencies of restraint and so on. No, not my insight, that of Landman speaking at a Nedbank presentation.

Cane cutters: of late the KZN press carried much exposure on the import of indentured labour from India. Would it be insensitive to point out that those, who came, thought conditions here better than from whence they came? Further, as a matter of fact, the Indian community in KZN punches way above its weight – I would put money on almost a half of the 20 best performing matriculants in this province being Indian this year. Perhaps those imports were the lucky ones - they certainly pulled themselves up by their bootstraps, for which I do not think enough credit is given?

Above reproach? Certainly not. Our Minister of State Security going for a “manicure” at a house of ill repute shows a startling lack of understanding of what is required of one in such a sensitive position.

Lighten up

V/D Merwe: Koos sleep vlerk by n Engelse meisie. Hy gedra hom sleg en toe sy dit nie meer kan uithou nie se sy: No!

Koos, hoopvol: Issit Engels of Afrikaans?

Twee dronken kerels zijn's avonds laat op weg naar huis en komen op de spoorrails terecht. Ze kruipen over de bielzen verder. 'Jemig, wat een lange trap', zegt de een. 'O, maar ik hoor de lift al aankomen', zegt de ander.

For Robin: Did you hear about the new Chinese cookbook? 101 ways to WOK your dog!

Morris, an 82 year-old man, went to the doctor to get a physical. A few days later the doctor saw Morris walking down the street with a gorgeous young woman on his arm.

A couple of days later the doctor spoke to Morris and said, "You're really doing great, aren't you?"

Morris replied, "Just doing what you said, Doc: 'Get a hot mamma and be cheerful.'"

The doctor said, "I didn't say that. I said, 'You've got a heart murmur. Be careful.'”