Author: Mike Schussler Source: Economists.co.za
Blinding speeches hid facts from a speeding light.
This week the President opens Parliament with his state of the nation address. Again direction will be given and promises will be made and targets will get set. Faces with voices will provide comments and the press will scramble to print context. Colour will arrive and official sounding music will follow bangs from guns that salute. Deaf people will see the speech and the blind will see the vision too.
Outside; the insiders in the form of unionised workers will protest that not much is done for them. The Rand will scratch its new head heading back to where it was before. The President will show up some of our ills along with some medicine and we will again have a flashing light shown on the poor the down trodden folk and we will get direction for our direction to somewhere and vision and mission will again be relooked.
But the real truth even in long documents like the NDP will be lacking. Truth is in the eye of the beholder I guess but with only 4 out 10 adults working the truth is a bit harsh and solutions are more hidden but seemingly cruel.
Only a quarter of adults work in the formal sector and less than one out of nine countrymen are income tax payers; the poverty trap is now sprung. Speeches light up those in need of assistance from the taxpayers.
Our country has built a welfare state similar to Europe, while Europeans have found out that with 7% of the world population and half its welfare expenditure it cannot compete. We have more people on welfare than working folks; but still pseudo intellectual’s hearts tell them that the solution is more welfare.
There is no money for roads, dams or sewerage as is it is needed for welfare.
Everything we need from electricity to roads we have to pay extra for. So we have to ask for more money and the enterprises sit with higher wage bills as well as higher transport and electricity costs. A few more close or merge and again jobs are lost and inequality increases and the president shines his light on inequality again next year in an angry teacher tone. He teaches us that inequality cannot go on like this and says the insiders better be rewarded well as they cannot afford to support all of their extended unemployed family.
Already more than 60% of the revenue of JSE firms comes from outside our country’s borders and every unsaid fact points to even more expansion from outside and relatively small amounts inside. Even state owned companies are expanding in other countries as even they seek risk reduction.
Business says it certainly is not fleeing; it is only expanding and building a different risk profile. An enterprise explains that in Africa the risks are reducing fast and the rewards are still good while in our country the risks are increasing and rewards are frowned upon and taxed ever more.
Blinded by the light
Some solutions are coming at the speed of light; most are not comprehended yet. At the Nersa hearings on Eskom it was clear that government needs to sell equity and allow most of that to pay for overpriced power stations or not even those with jobs will be able to afford lights.
There is no money for more big roads, rail or dams unless we pay up front. South Africa has gone from post-paid infrastructure to pay as you go infrastructure; and that is impossible. The harsh dawn light is blinding us; still clearly South Africa like Greece and Spain will have to sell the airline, airports, ports and other so called jewels. Like unemployed aristocrats the expense of keeping up appearances of the castle is becoming an expensive farce.
Sure some uncles will kick up a fuss but an airline that cannot make it; competes with the many welfare cheques and welfare cheques vote while unaffordable electricity loses votes. Tolls help the opposition attract votes.
The big European social democratic experiment with an African flavour is a walking disaster. Within a decade Europe would have left most of the cradle to grave welfare state well and truly behind and will focus on things such as education and affordable people care to remain competitive. The African and Asian solution should be upon us and I bet in a decade or two there will be very few economic socialists left unless there is very little economic activity left.
I bet that in the end the light will go on for economic activity and only people with career limiting notions will have called themselves socialist then, just like it is very difficult to find National Party supporters at present.
The time it takes will be the time it takes to unlearn some of the propaganda that we have been fed over the years. South Africa was always a country with a socialist bend and while some social things will remain they will become less important for our future for the next few decades. Even the blind can see the bells toll for socialist policy.