Ah, a new year! That wonderful time of momentarily unbridled optimism and hope.
Except that one knows things have hit a new low when the only time of the year that the country is assured of electricity is during the three-week festive season holiday break. That’s when all industry and construction have shut down and much of domestic cooking revolves around the braai fire. It’s that time of the year when the most onerous burden on Eskom is to keep the Christmas tree fairy lights flickering, which, in any case, are nowadays often solar powered.
It’s also a new low for South Africa when President Cyril Ramaphosa’s solemn hand-on-heart promise to the nation that there would be no load shedding between December 17 and January 13 already had been broken by January 4. On the other hand, one could argue that Eskom’s indifference to the presidential reputation, such that is, is a new and welcome declaration of indifference by the power utilities new CEO to political meddling.
The King Canute-like failure of CR simply to decree a national power supply is emblematic of the failure of a “command” economy of state-owned enterprises (SOEs). It also signals the president’s wider political impotence. Two years after Ramaphosa deposing his venal predecessor — and almost a year after gullible voters gave CR the “mandate” he supposedly needed to avoid being similarly disposed of — SA is washed into 2020, rudderless and taking water.
Given the rate at which Ramaphosa is at present effecting change, he will have to be president for life to make the necessary impression. We do not have that long.
When the final figures are crunched, 2019 will be shown to have registered close to zero percent growth. And while analysts are prattling excitedly about growth in 2020 being as much as 1.7%, everyone knows that because of private-sector job losses and population growth, SA needs at least double that number.
The scale of the problem is reflected in SA Revenue Service statistics released last month. SARS paints a bleak picture: “Real GDP has grown slower than population growth for five consecutive years and our current GDP performance on a per capita basis is the weakest since the 1960s.”
In 2017/18, the corporate sector contributed 18% of tax revenue, but there were around 600,000 fewer companies registered, compared to the previous year, and of those registered, only one in four made any taxable profits. A mere 380 entities pay 57% of the tax collected from companies, notes SARS.
Just over 38% of government revenue comes from individual taxpayers. Out of a population of 56m, 97% of personal tax is paid by just 3m people, while a minuscule 190,000 people — each earning R1m or more a year — paid 37%.
We know from the government’s Medium Term Budget Policy Statement last year that 29,000 public servants now earn more than R1m a year, double the number of a decade ago. So, the actual creation of wealth, in both the self-employed and corporate sectors, depends on a comparatively tiny number of people — fewer than 160,000 individuals.
Yet, with the destruction of private healthcare and the expropriation of private property, the government is doing everything it can to alienate this group. And it is succeeding in doing so. The Professional Provident Society has just surveyed its members and found that 72% of all professionals said that they would leave the country if the National Health Insurance Bill is implemented in its current form.
Similar sentiments are held by around 40% of the SA Medical Association’s practitioner members. That’s about the same statistic as the 41% of all health professionals who, in a Solidarity survey, said that they were considering emigration, and of whom 21% had already taken steps towards doing so.
No doubt the government will dismiss these figures as alarmist and they may well be. But even if “only” one in 10 of those contemplating emigration actually does so in the next two years, the economic effect will still be calamitous.
The tax base will shrink, making impossible a system supporting 17.6m social grant recipients, 1.3m public servants, 920 elected national and provincial representatives, around 700 SOEs, 62 cabinet ministers and deputies, and that single decorative presidential fairy perched at the apex of the Christmas tree. The options are simple. The government will have to either cut out the deadwood or watch the entire tree topple over.
Perhaps most seriously for the hopes of an eventual economic recovery, is that the national knowledge store will be grievously depleted by emigration of such a scale. Institutional memory, already hollowed out by the retrenchment of whites in the name of affirmative action and the resultant emigration of at least 1m skilled South Africans, will be finally and irretrievably lost.
Year 2020, the beginning of a new decade. Or maybe just another step on the tripartite alliance’s doomsday project, hell-bent towards a revolutionary, Pol Pot-type of Year Zero.
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