February 10th, 2024 | Business, Economics, Practice

February 10th, 2024 | Business, Economics, Practice

Economy/business

Trends:

If you had listened to the Prez presenting SONA, you would know that our economy is in great shape and that great things are on hand. However…

  • The IMF forecasts SA’s GDP 2024 growth at 1%, down owing to our persistent energy and logistics crises.
  • The ABSA PMI reflects this prediction, dropping sharply to an unusually low 43.9 points, indicative of business expectation of low demand. Bank credit extension is resultantly slow.
  • Reflective of our pedestrian economy is job availability – despite politicians’ promises, our government does not directly create wealth, it creates jobs by taking wealth from others, ‘by taxation, selling bonds or imposing mandates’ (D Investor), essentially what it regards as a free lunch.
  • Where we are growing is our budget deficit of 6% and in our corruption index ranking, which is edging upwards.
  • Comparing ourselves to others –
    • the Big Mac Index, think purchasing power, implies that the R/$ exchange rate should be R9.12 rather than the current R19 or thereabouts; an indication that our Rand is significantly undervalued but, from experience, underpinned by expert opinion, this is unlikely to come right; and
    • our Satrix 40 and ALSI delivered a tepid return of 8.7 and 2.9% last year; if you don’t hold at least a portion of your savings/annuity overseas you might be shooting yourself in the foot.
  • Foreign investors have withdrawn R1trln from our bond and equity markets in the last 10 years.
  • In summation, last year was dreadful, financially speaking, and this year is not going to be much better.

 

News:

It serves little purpose to repeat well-known news, but the following may be worth noting:

  • The Vodacom/Please Call Me inventor saga continues – the former intends challenging the SCA ruling in the Concourt: hardly covering itself in glory.
  • The IDT is under investigation for the usual slew of corruption/mismanagement allegations.
  • The latest BEE regulations are reportedly better than the current set.
  • Whilst the greenies might not like this, nuclear power is stable, effective, and clean – a 2500MW plant is on the cards for South Africa.
  • Our Communications Minister has not given up on the now-dead Post Office by calling for comments on its monopoly on delivering light parcels.
  • Those who follow financial news will be aware that Ithala’s (the bank) right to take deposits had been suspended by our Reserve Bank. A week past one of the reasons for Ithala’s problems was made public i.e. that it was not able to operate unless it found a bank that will present it with the necessary facilities, storage and IT technology. That and the appointment of a repayment administrator, who is a specialist investigator into Ponzi and pyramid schemes, says it all.

 

Tax:

Most of us who read this will be called upon to pay provisional tax this month. SARS is not as squeaky-clean as you might have thought:

  • A recent report was flighted by Moneyweb on the VAT shenanigans of SARS in Cape Town – the Tax Court issued a punitive costs order against SARS; unusual.
  • The Coronation/SARS saga has not yet died down as Coronation will appeal the SCA judgement to the Concourt. The sums involved are massive – allegedly R400bn.
  • Private sector investment? Our state has an ‘income deficit problem’ – the Prez expressed our State’s inability to fund and its newfound reliance on private sector funding (anathema for socialists), beautifully in SONA, saying that the state was looking at a variety of innovative investment models. Indeed!
  • The Land Bank wants to sell its written-off loan book. It would be very interesting to see who buys and at what price – one assumes that most of this loan book would be on the cusp of prescription?

 

Practice

 

News:

  • State capture prosecutions have been in the news of late:
    • The deal cut by the NPA in the Optimum Mine issue attracted a long DailyMaverick report which blamed NPA failure/incompetence for the failure to follow through.
    • Another Gupta-linked case relates to a Mr Bhikhu, allegedly a director of a front company, taken on by SARS, is in the news and, again, even allowing for the slow grind of judicial wheels, one should ask oneself why this has taken that long to come before our courts.
  • An article on behalf of the LSSA (the LPC is noticeably absent) that appeared in the De Rebus, noted agreements reached with the Master on service delivery. Whatever, I have seen little change yet and my understanding is that, at least on our local front, little has changed.
  • Our RAF issues are not over… one interesting aspect of the latest round of litigation in Pretoria, is that the RAF cites the LPC as respondent, together with a host of attorneys and such. The LPC, as representative of our profession, is dead as noted above.
  • Dead/deadbeat: Judge Hlope has now taken his resistance to suspension to the Concourt. Yawn.
  • Judge Fisher will be investigated by the JSC for misconduct.
  • Our Labour Minister has embarked on the upgrading/modernisation of the UIF and Compensation Fund. Interestingly, this includes a recommendation that suitably skilled staff should be employed and retraining existing staff should be embarked upon. Pigs might fly!
  • An interesting article on attorney/client conduct, that many progressive practices undertake, is still good advice, even though applicable to American practitioners: https://www.natlawreview.com/article/why-lawyers-should-make-annual-site-visits-clients
  • Talks are underway dealing with the regulation of legal practitioners within the SADC region.

 

Hard news:

Conveyancing:

 

Property

 

There is little news on trends in the property market that is new – of what is available, the following might be interesting:

  • Bloomberg posted a note entitled ‘US Commercial Real Estate Contagion Is Now Moving to Europe’; with China in a similar position, fixed property investment appears to be in the doldrums.
  • Speaking of investment, Roodt says that if one regards buying a house as an investment, you should rather be investing in the S&P. Similarly, he deals with buying rather than renting – take a look: https://businesstech.co.za/news/property/745721/buying-property-vs-renting-and-investing-in-the-sp-500-heres-the-winner/
  • A recent PropertyWheel article suggests that properties are becoming relatively speaking cheaper than of late in that nominal set salaries are growing at a faster rate than property prices. Yes, this is so, but the article ignores the fact that nominal salaries are hardly keeping up with inflation, which means that whilst consumers are earning more, their disposable income has not increased.
  • Many municipalities will not issue a rates certificate when transfers of properties take place if the physical erections on the property does not match the building plans. This could result in delays and all manner of unpleasantness – always check/ask for building plans when buying.
  • Self-help and spoliation: a landlord cannot sommer cut off your electricity supply: https://www.dotnews.co.za/Code/Article.aspx?qry=yKPR5eDKNlaukY9Ps7iCgxizfgqUxKebtZTCTuwERAmAJ5fwriubLNe_gazZIxdh84-af_3IdT30I-WVp5wQr1jSXMaqgIHikd7uT8whYl8=-NOPAD
  • Ooba noted that the average interest rates, offered by banks on home loans, is dropping and now stands at 0.48% below prime.
  • Sectional title prices rise at a faster rate than do freehold prices.
  • Tshwane’s Eskom-debt has risen from R1.1bn in September to R3.9bn in January – a city undoubtedly in trouble.

 

Sectional title upkeep: a sectional title body corporate is responsible towards third parties who may be injured as a result of the non-maintenance of body corporate buildings: http://www.saflii.org.za/za/cases/ZAWCHC/2024/7.html  (Ex West)

 

Comment

 

Stepping aside: lawyers should not ever comment on politics or religion. I will excuse the following note on the basis that it involves criminal law!

A step-aside internal policy holds that members, of the ruling party, charged with serious crimes, should voluntarily step aside from party and government activities. Two glaring ‘challenges’ to our ruling party, have been publicised widely, i.e. that of Mz Gumede, an erstwhile mayor of eThekwini and that Mr Mashatile, our Deputy Pres (criminal charges were instituted against him this week past).

Whatever, these two are high-profile cases will focus attention on our government’s stated intention to do away with corruption.

 

Lighten up

 

What did the Muslim say when he found out about all the corruption in the church?

“I think I’m gonna be Sikh.”

 

Never in my life have I seen so much corruption, bribery, blackmail, jealousy, theft, fraud, deception, and outright bloodshed.

And honestly, I’m wondering why I even play Monopoly with my family in the first place.

 

Teacher: “One day our country will be corruption free”, which tense is it?

Student: Future impossible tense.

 

 

Written by: Daan Steenkamp

Daan Steenkamp Attorneys

 

 

Still looking for your dream home, or wanting to sell? Feel free to give one of our developers a call today.

 

Tom Eastwick – The Gates, Hilton and Garlington, Hilton | 072 297 2699 | tom@devdirect.co.za
Janet Channing – Waterford Residential Estate, Howick | 082 570 5834 | janet@devdirect.co.za

 

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