Op-Ed: Budget 2017/18 – "The Great Pretenders?"

by Prof. Matthew Lester, Associate Professor, Rhodes Business School 55 views0

Op-Ed: Budget 2017/18 – "The Great Pretenders?"

November 2016 marked the 25th anniversary of the death of rock star Freddie Mercury, ‘The Great Pretender.’ Back then the stigma of an AIDS death was such that not enough was made of the horror that is the slow and painful death from AIDS (even if you have all the money in the world!) Only now do we see internet documentaries on the terrible end of Freddie.

Watch them! Feel them! Know them!

Aids Graph 1_27Feb 2017

South Africa’s AIDS death rate may have declined from just below 50% to 28% today. But there are still 150 000 AIDS related deaths per annum. And nearly all are the poorest of the poor.

Before the national budget the topic of ‘sugar tax’ was trending. Are we bonkers? Concentrating on raising less than R1-billion in the context of a national budget of R1,4 trillion.

Yes! We are all The Great Pretenders.

New HIV infections are still sitting at around 330 000 per annum.

Aids Graph 2_27Feb 2017

With effect from the 1st of September 2016: all  HIV positive children, adolescents and adults regardless of the CD4 count will be offered ART (Anti Retroviral Treatment), prioritizing those with a CD4 of less than 350. That must be a very cold comfort to an HIV victim. They should be asking ‘how did this ever happen to me?’

And that’s not the end of the problem.

Rock star economist Thomas Pikkety tells us that a 1% real economic growth rate is OK. But goes on to qualify that with ‘so long as that’s 1% above the population growth rate. So lets graph it.

Aids Graph 3_27Feb 2017

South Africa is going nowhere slowly!

On 15 February 2017 the World Bank reported on the state of the  South African Economy to parliament’s Standing Committee on Appropriations.

  • The National Development Plan (NDP) targets six percent unemployment rate by 2030. To achieve this will require 600 000 new jobs annually from 2012 to 2030. However, on average since 2012, South Africa has been able to make only 250 000 jobs annually.
  • As a consequence of population growth and youth entering the labour market, unemployment has remained very high, particularly for unskilled and semi-skilled workers, and for new entrants such as woman and the youth.

Is anybody out there listening?

Of course this now all gets caught up in a massive blame game. The primary target is JZ as SA has made no progress under his regime. Let alone all the other scandals.

But the problem is not all of JZ’s making.

Yes, South Africa’s past pre-1994 will always be with us.

But we had a chance to make great progress post-1994!

Aids Graph 4_27Feb 2017

Before the financial crisis of 2008/9 South Africa was growing faster than its population and there was a real decline in national debt. We were on the right trajectory.

President Mbeki and then Finance Minister, Trevor Manuel, basked in the glory of it all. If they ever gazed into the future they saw f— all! They did nothing to accelerate growth rates that may have helped South Africa really grow. Mbeki also shunned the HIV/AIDS pandemic leaving us with 7 million HIV infections today.

To be kind Mbeki and Manuel were the patron saints of Great Pretenders.

For the last five years South Africa has achieved little more than struggle to contain the fantastic debt trajectory established between 2009 and 2012.

If South Africa is ever to be ‘ Free at last! Free at Last’ it is going to take a superhuman effort from all of us.

Every one of us can make a contribution instead of procrastinating and playing the blame game. As Kipling put it so many years ago when he wrote for his beloved son. 

If you can fill the unforgiving minute
    With sixty seconds’ worth of distance run,   
Yours is the Earth and everything that’s in it,   
    And—which is more—you’ll be a Man, my son!

Now shove that in your pipe and smoke it! And see the numbers to the 2017/18 national budget work per the VIDEO .

Have a bottle of anti-diarrhetic handy! This is frightening stuff.

Professor Matthew Lester,  BCom (Rhodes) CA(SA) H Dip Tax Laws (Wits), is an Associate Professor at Rhodes Business School. In 2001, he was the winner of the Vice-Chancellor’s award for distinguished teaching. Apart from teaching at Rhodes, Matthew lectures to a wide range of South Africans on taxation and money matters. He also writes the weekly column ‘Tax Talk’ in the SundayTimes.