A burning topic is the petrol price and its potential effect upon our economy. On the one hand there is a push for the state to drop the taxes which almost doubles the price of our fuel; on the other is the hard fact that our government is short on income and cannot afford to drop the loss of any substantial revenue from its budget. The funny thing is that we have caused much of this distress ourselves: you will recall that exploration on our West coast was virtually sure to produce an oil find but, this was (temporarily??) abandoned owing to pressure from environmentalists. If we accept that oil use is inevitable, then having our own sources, will not only insulate us from oil price escalation, but also stimulate our internal economy for the retrieval and distillation thereof. The price of PC is high…

 

A case, before our Concourt, deals with Eskom wishing to cut off electricity supplied to two municipalities, which collectively owe it R2.8bn. The difficulty with this situation is that some consumers are paying those municipalities for their electricity but, because of the dysfunctionality within those municipalities, Eskom is not paid. If Eskom were to cut off the electricity completely, or even to limit the use thereof, the knock-on effect is huge – think no water, sewerage systems going down, hospitals being cut off, traffic problems and the like. The fact is that users of electricity should be paying for consumption, in default of which they should be cut off and municipal dysfunction, which affects us all, should be eliminated. A RatingsAfrica report holds that six of our Metropolitan municipalities are not financially sustainable and would need government intervention to survive. The problem is that we are not addressing the rampant corruption, mismanagement and incompetence in time and that these issues can but become worse as infrastructure weakens and cities (and demand) grow(s).

 

From the above it is clear our fiscus needs more money to address the highlighted problems. Finding money is becoming a problem in that our fixed investment to GDP ratio was 13% for last year which sounds fine: if you compare this to Botswana (28.5%), Nigeria (31%), India (26%) and so on, the fact is that our investment rates and ratios stink. You cannot fool the market all the time and we are now losing investments owing to government incompetence.

Another quite interesting statistic, on this very topic, comes from Codera: the link that follows takes you to a comparison of the slope of sovereign yield curves of the USA compared to that in South Africa; you will see that our curve reflects a higher expectation of profit, which illustrates that the market has priced in a greater risk of state default in our long bond price expectation: https://codera.co.za/slope-of-the-yield-curve-over-time/

This is especially interesting as the market would appear to belie the uptick noted by rating agencies for the South African economy.

Finally, on the same topic: Ninety One, reportedly, is punting South African bonds for shorter term income streams.

 

Medupi funder, African Development Bank, has said publicly that Medupi will not render a positive income stream during its expected lifetime. Overruns and incompetence have caused this, and we will all be directly involved in funding t a loss-making hat power station in the years to come.

 

The potential for global stagflation, defined as high interest rates coupled with a stagnant economy, appears to be back on the financial horizon.

 

Business

 

Comair applied for business rescue – a day after it was selling discount airfares: many of us would not easily fly with that entity again, given that its management must have known that its financial position was precarious at a time that it was taking money from the public and encouraging the purchase of cheap flights. Not cricket.

Whilst on this topic – the following graph shows that domestic flight passenger numbers are now only 20% down on what it was pre-covid: https://codera.co.za/have-airline-passenger-numbers-recovered/

 

Said in a quavery voice; In my day the state legal advisers had borshare; which seems to be lacking of late: the latest stuff-up comes from the SCA declaring the regulations introduced by our Minister of Health dealing with complementary medicines invalid, as the regulations fell outside the ambit of the enabling legislation. This sort of thing has become quite commonplace (consider Mr Godonwana’s mis-read of a court order), and I could not help but wonder whether the legal advice obtained by our State from its advisers is inadequate or whether the State simply ignores the legal advice given?

 

Shorts:

• a resignation is a one-sided affair and cannot be withdrawn once tendered: https://www.webberwentzel.com/News/Pages/you-better-mean-it-when-you-say-I-am-out.aspx
• comply with covid workplace rules or else: http://www.dejure.up.ac.za/images/files/vol54-2021/Khumalo%20final.pdf
• our present tax year will be one month shorter than last year;
• an MBA will cost you some R300k pa: https://businesstech.co.za/news/business/590042/how-much-an-mba-costs-at-south-africas-top-business-schools-right-now/

 

Practice

News:

• The proceedings in an Eastern Cape court have highlighted the need to recognise the legitimate use of technology allowing one to sign electronic documentation under oath for use in our courts.
• Shup up Dali Mpofu’s disciplinary hearing before the LPC’s is finally on the cards – 14 months later: justice delayed…
• This week past our newspapers were awash with questions on the prosecution of the Glencore board, following on its admission of bribery in other countries. Such prosecutions here are not common – take for instance the Huletts saga which is yet to be put to bed.
• Conveyancers should note that it may possibly be better to use the Deeds Office’s Deeds View system rather than commercial alternatives. I have repeatedly found that the commercialised access, which purportedly draws its information off the Deeds Office system, is not entirely accurate – think missing micro-references and so on.
• A gentleman holding a doctorate in law from New York, published an article, slating judge Khampepe for her judgement incarcerating Nummawan, and saying that her judgement disregarded the dictates of ubuntu and international law. One wonders whether this will be taken further? (Ngobeni in the Witness 3 June)
• Richard Spoor, acting on behalf of the Bobroffs (for those not in the know – fugitive RAF attorneys from South Africa, now resident in Australia), has said that the conduct of the NPA was incompetent and has led to his clients being broke and miserable. He may be right regarding the NPA, but I confess to having little sympathy – the reported-on conduct of the two brothers and the effect their misconduct on their clients was such that I would happily see them suffering long.

 

Hard News:

• A lady, who was shot in a New York subway, has filed a lawsuit against Glock; a producer of hand weapons, designed to promote concealment. This is going to be interesting.
• Regular readers will recall that I reported on the inheritance rights of children, conceived after the death of their parents, from frozen gametes. The following article adds to this debate: https://www.derebus.org.za/sperm-donors-and-their-rights-regarding-the-child/
• I hold an article by Grogan on how to deal with AWOL workers – ask me for a copy.
• It is common practice to impose a restraint against the sale of a property unless the purchaser joins, for instance, an association controlling the use of the land purchased. A Limpopo court found that such a restrictive condition did not comply with the sale was forced. A startling find, to say the least: http://www.saflii.org.za/za/cases/ZALMPPHC/2022/26.html (ex West)

 

Property

Referring back to my comments above, about users paying for services, is a report relating to the Ethekwini municipality, in that it wishes to tax users of its services, living within the Ingonyama Trust lands, by imposing the modern equivalent of a hut tax on such residents, with a flat rate of R100 per month. Good. There is no reason why those benefited, albeit indirectly, should not pay for the services. The fact is that these are consumers who piggyback on payments by others: our municipalities cannot afford to not collect from all and sundry lest all of us suffer the consequences.

 

A portent of what is to come? Calls have been made for a move of Parliament to Pretoria. That this may potentially be under consideration, is bolstered by a report that the would-be R18bn/ government precinct, built in Salvokop, will be partially occupied by several government departments this year.

 

Many years ago, it was practice in KZN that, when one subdivided property, a levy would be payable to the municipality for the extra loading that such subdivision would place on infrastructure. Johannesburg took the lead by imposing such a surcharge on developers, which has now been copied by eThekwini. SAPOA is reportedly on the war path on this issue. I suspect that the problem is primarily that the extent of such a levy has not yet been made public.

 

Quotables

He uses statistics as a drunken man uses lamp-posts… for support rather than illumination.

Lang

 

Comment

Regular readers will recall that I have had a number of unpleasant pr brushes with officialdom this year. My latest is an ongoing saga in which I had confessed to wrongdoing in order to get things done: I had, in the first week of March, applied for a driver’s license. I was told to return, waiting longer than usual, two months later to pick up the completed license. I gave it three and a half and on presenting myself, I was told to come back mid-July, and, with any luck, it might just potentially be there, although they could not guarantee this. Five months…

Suddenly there is talk of extending the lifetime of a South African driver’s licenses indefinitely – not because it is desirable but because of government incompetence. Even if implemented now, it would take another five years to work the existing time-bound licenses out of our system.

Go overseas and explain to those renting you a car that your license could not be renewed…

 

Lighten up

An intellectual is a person who has discovered something more interesting than s@x.

-Aldous Huxley

 

My dad told me, ‘Anything worth having is worth waiting for.’ I waited until I was fifteen.

-Zsa Zsa Gabor

 

I used to think I was great in bed until I discovered that all my girlfriends suffered from asthma.

-Jerry Sadowitz

 

Whoever named it necking is a poor judge of anatomy.

-Groucho Marx

 

I went to buy some condoms today, and I said to the pharmacist, ‘Excuse me, I need some condoms;’ and he said, ‘Just a minute,’ and I said, ‘Oh, that’s my brand.’

-Mark Cohen

 

 

 

 

 

 

 

 

Author: Midlands Developers Direct

 

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Still looking for your dream home. 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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