Don't Count Your Chickens

It's been a long, hard battle, but he is finally gone. Jacob Zuma has been our most morally deficient President since die Groot Krokodil, and the most incompetent head of State we've ever had. He is replaced by an intelligent and thoughtful leader in Cyril Ramaphosa, a man who is not tainted by  corruption and other selfish and nefarious behaviours. But before we get carried away in our celebrations, let us remember that the end of Jacob Zuma is only respite, a milestone on the path to the actual goal: a free South Africa.

It is really a case of two steps forward, one step back. The end of Jacob Zuma is certainly something worth celebrating. In his almost nine-year tenure, economic growth has halted, unemployment has ballooned and criminals have run rampant. And these, only the results of neglect. We haven't even mentioned the proactive expansion of corruption and state capture. Ramaphosa will certainly put the brakes on the government's downward spiral, but he is unlikely to halt it. And I'll tell you why.

For a start, Ramaphosa supports several socially destructive policies, such as a minimum wage, free higher education and National Health Insurance. But this is not the worst of it.

As Mmusi Maimane said in his speech following Ramaphosa's election, the ANC that elected Ramaphosa, is the same ANC that elected Zuma and kept him in power through all the scandals. Remember that Ramaphosa only just won the ANC presidency and half the top 6 are or were Zuma supporters. The President does not make all decisions for himself. He is subject to the decisions of the top 6 and the NEC, as is clear from his recent cabinet announcement.Whilst many of the bad apples have been plucked away, some of the worst remain. And the most rotten of the lot has been added.

David Mabuza perfectly exemplifies the fact that even though Zuma is gone we are still in heaps of trouble. Mabuza is possibly worse than Zuma. In fact, is definitely worse than Zuma. For all his corruption and inefficiency, we've never heard of our former president killing his opponents. DD Mabuza has done so on several occasions. He is also tainted with corruption, specifically regarding the 2010 World Cup, but whistle-blowers never live to see the witness box. Click here for more on David Mabuza's scandals.

If Zuma were the beginning and end of our governance problems in South Africa the ANC would have got rid of him long ago. The truth is that the whole ANC is a problem. The loyalty to party above country is a problem. The commitment to unity over integrity is a problem. Ramaphosa can only do so much trying to serve God and Mammon. He cannot unite the ANC and simultaneously provide moral leadership. And the wheel will turn again and we will see the evil side of the ANC take over, in a period that could be worse than the Zuma years, unless we do to the whole ANC what has been done to Zuma.

SA is Not a Democracy part 1

Democracy is a loose term. It can mean different things to different people. It is a loaded word and has been used and abused to promote ideologies and organisations of all types. Heck, even North Korea considers itself a democracy!

The word democracy comes from Greek and means 'rule by the people.' See why it is a loose term? 'Rule by the people' can mean a variety of different things. Today when we speak about democracy we are usually referring to representative democracy, where we choose leaders in elections who are supposed to represent our interests. Great! So different groups of people with different interests elect leaders, so that everyone is represented in the government and those leaders sit and have big discussions so that the country is run in the way that is best for everyone.

Wrong!

The first problem is that here in South Africa government doesn't make decisions by discussion and compromise. It makes decisions by voting and the vote is won by a simple majority (excepting of course for amendments to the constitution.) So if a party has 51% of MPs, that party holds all the power. And since the number of MPs is proportional to the number of votes, 51% of the voters can effectively control the lives of the other 49%, given how much power the government has over individuals in our country.

The next problem is that only 16 million of our 55 million population votes, which effectively means that just over 8 million people can control the lives of the other 47 million. I'm sure most of you are starting to see a problem here.

Now the nature of our ruling party makes the above problem much worse. Most of the country votes blindly for the ANC. They are almost guaranteed to win the elections no matter what. The ANC has over 700 000 members, organised into about 5000 branches. There are about 500 other voting delegates at elective conferences, but for simplicity's sake we will assume there are 5000 branch delegates who vote to elect the ANC leadership and thus their MP's. Each delegate needs 51% of his branch vote, and each ANC leader needs 51% of the delegates' votes. This means, that in the extreme situation 26% of ANC members can choose the party's leadership,and thus the path the country will follow. Doing the maths, that's less than 200 000 people determining the destiny of more than 55 million.

These calculations are both rough and simplified, but they illustrate just how few people are making the decisions that we are supposed to be making as a nation. And even then, we are still assuming that these elected leaders act according to the will of the people who elected them.

I know this has been a bombardment of figures and statistics, so let me make a final point for those who don't really care for numbers. Our situation is summed up very well by looking at the times of greatest political change. With Jacob Zuma about to be ousted after years of controversial and morally bereft leadership, it is clear that more change in the country comes out of the ANC elective conference than any other occasion, including the national elections. That is not democracy.

Thus we see that in spite of the endless propaganda bragging about our democratic ideals, South Africa is not really a democracy at all. But then what is a true democracy? The Greeks didn't just give us the word democracy, they gave us the whole concept. In part 2 I will explain, referring to the ancient Greek model, how we can have a real democracy.

Hoërskool Overvaal

Grade 8 is a long time ago for most of us, but just try to think back for a moment to your first year of high school. Now imagine you only had two teachers to teach all your subjects, all 12.One might teach English, Afrikaans, History, Art, LO, and Geography, and the other, Maths, Science, Biology, Accounting, Business studies and Technology. This sounds awful to me. And not only that, it is completely impractical. We all know that a jack of all trades is a master of none. A teacher that has to focus on teaching so many subjects will never be very good with any of them. Yet this is Panyaza Lesufi's solution to accommodating 55 English speaking pupils at Hoërskool Overvaal.

Late last week Lesufi published an article in response to the court ruling that Hoërskool Overvaal cannot accommodate 55 English speaking pupils. You can read that article here, but basically what it says is "race, race, racism, racists, race, racist." But to be serious, the article equates the whole situation to a racial incident, which can only be done by someone who sees the world only through the goggles of race. This tells us a lot about Lesufi's character. It seems he is someone who is stuck in the glory days of the struggle and alongside his other antics shows that he is more concerned with attracting the attention of the media than with doing his job.

But enough about Lesufi. Let us touch briefly on the actual argument before addressing the broader education problem in South Africa. The court judgement stated that the school did not have the capacity for 55 English speaking pupils. Furthermore it is completely impractical to have just 55 pupils in a school like this for reasons we have discussed above. It really is simply a question of practicality.

Now the parents of the 55 pupils have a legitimate concern regarding the fact that there are no English speaking schools in the area. But let us consider who as at fault for this. Not the school and definitely not the North Gauteng High Court. Lesufi with his choir of protesters are turning the high school into a scapegoat for the governments failings. Why was there not an English school built there long ago if there are so many English kids? Lesufi has a lot of criticism to dish out for someone who is not doing his job very well. 

But to be fair to Mr Lesufi, it is a job that is impossible to do well. It is impossible because of the nature of our education system. Firstly, the people at the top are politicians, not educators. This means that they don't really know what they are doing. We need educational experts running our education system, not unqualified bureaucrats. Second, we need a decentralised system. It is impossible to run thousands of schools from a central organisation, especially when that organisation is the government, who's leaders have no real incentive for performance in a country where politicians are held to very low standards. 

The simple solution is this: Government must get out of education. Because of our history and socio-economic circumstances we will need a transition period where the government still funds education, but this must be done through a voucher system where each child gets a certain amount each year for education, but the government has no say over curriculum or placement or language policy. A system where many people are looking for and finding a multitude of different solutions will always produce the best results. The freedom given to educators will bring positivity back into the learning environment and competition between schools and educational systems will only benefit learners.

The Hoërskool Overvaal saga is mole hill made into a mountain, but is is also just a symptom of a much bigger problem. A problem to which the solution is not more government control, but less of it. We cannot expect the organisation that is causing all these problems to solve them if they have more control. We need to free our schools, our teachers and our principles to provide quality education, without government interference.

Opposition Wins Again

Cheers erupted from the ANC caucus in parliament as speaker Baleka Mbete read the results of the secret ballot vote of no confidence against Jacob Zuma. 177 for. 198 against. The irony is that this group of jubilant souls were only celebrating their own demise.

To say the opposition lost would be technically accurate, but not at all a fair reflection of the bigger picture. The vote of no confidence failed, but the opposition won. You see, this was always a win-win situation. The very idea of the no-confidence vote was to put the ANC between a rock and a hard place. That is why we have had 8 of them already. Each time the ANC votes to keep Jacob Zuma in power they tie themselves ever closer to their greatest liability and alienate those who "love the ANC but hate Zuma." Every time the ANC caucus puts their weight behind Zuma they lose seats in the 2019 election.

I'm sure most ANC MPs know this, but are more concerned about saving themselves from the whip of party discipline than saving the party from the wrath of the voters and the mire of immorality. Though sometimes I do wonder.

On the other hand, voting Zuma out would also be a dangerous road and additionally, it would be an unpredictable one. No one really knows what would have happened had the required 50 ANC MP's broken ranks and had the president removed. It is far from inconceivable that it would cause an irreparable rift and possibly a split in the party. Far less likely, it would have been the turning point for the ANC to course correct and repair its once honourable reputation. But those possibilities are just what-ifs now. The ruling party has chosen the slow poison.

The only way for the ANC to escape this trap would be to recall Zuma itself. This would allow them to show some semblance of morality while not bending to the will of the opposition, though at this point it may even be too late for such a move to still be considered a show of strength. But this hasn't yet and certainly will not happen until at least the electoral conference in December. There are too many people high up on his side who would go down with him.

The country needs Jacob Zuma gone. But Jacob Zuma is not the extent of the problem. The ANC is the problem. You cannot separate Zuma from the ANC, and the secret ballot vote proved that. Zuma is not unique, he is a representation of what is happening in the rest of his party. Most of the ANC are as morally decayed as Zuma. If it were not so, he would not be in power. The whole party needs to go.

So while the DA and the EFF publicly mourn the retaining of President Zuma, privately they will be celebrating another hole fired into the sinking ship of the ruling party, all while its hopeless crew drown, shackled to their own pride.

Just Us and Venezuela

As we approach the decade mark since the start of the great recession all countries are now in recovery, well, all but two that is: economically devastated Venezuela and yup, you guessed it, South Africa. As of, well now, along with Venezuela we are the only economy (out of more than 200!) in recession.

First off, this means that any excuses about a slow global economy for our our limited growth are null and void. Second, although they are major contributors, Zuma and the Guptas are not the sole cause.

I'm sure most people know that there is trouble in Venezuela, but probably not the extent. In 1998 Hugo Chavez and his United Socialist Party took over the government, and as with all socialist projects things were wonderful at first, with the poor suddenly having access to housing, healthcare and education amongst other things. But socialists live on borrowed time and things quickly turned south. In 2016 Venezeula's GDP dropped more that 18% and inflation rose to 500%. Today the people of the once most prosperous state in South America are starving. The shops are empty and when they do have food lines stretch for hundreds of metres outside the store and around the block. And to make matters worse, Chavez' successor, Nicolas Maduro just used a bogus election to take control of all branches of government to further oppress the people.

So now you're thinking, "But Venezuela is nothing like South Africa?" You'll be surprised at the similarities:

• Venezuela's economy is completely oil based, so when the oil price collapsed several years ago, so did their economy. Our economy is heavily reliant on the mining sector and so when there is trouble in the mining industry, as there has been in recent years, the whole economy suffers. Fortunately, unlike Venezuela, we are not completely a one-trick-pony.
• When oil prices were high the Venezuelan government used the money for extensive social spending. When the oil price dropped they decided to keep spending and so put themselves into a debt crisis. Our government also does an unhealthy amount of social spending and it is putting us in debt. Yes many people have a better quality of life courtesy of the government purse, but if you feed the people today with tomorrow's bread, tomorrow the people will starve.
• The United Socialist Party of Venezuela came to and maintains power not on sound policy and economic principles, but on populist rhetoric and Robin Hood economics. That is the same way the ANC maintains power. Free housing, free electricity, grants and government handouts: people are far more likely to believe according to what pleases the ear than what is true. They don't realise that the magic well of free stuff will eventually run dry.
• Finally, and most importantly, the power in Venezuela is too concentrated. The government does far more than it should ever need to do, even by mainstream centre-left standards today. This is the root of the crisis. In South Africa the government also does far more than it has the right to do. It can't handle all the responsibilities it has taken upon itself, but it is yet seeking more. And worse yet, power within the government is becoming more centralised, with the Zupta faction now controlling the national assembly, the NPA, the judiciary, the public protector and many other institutions. We are on dangerous ground.

I honestly don't think we will reach the point Venezuela has. Even though we are heading in the same direction we are going slower and have sharper breaks in the form of power and influential moderates, who stand up against wannabe dictators. But we can't sit back and relax. Our country is in deep trouble. Unlike Venezuela, we have diagnosed our problems (at least some of them) early. Now we must be quick to act as well.

A Symptom of Chronic Stupidity

Free Stuff!

That caught your attention, didn't it? The power of the word "free" is astounding. It always gets us excited even though our most basic intuitions tell us there must be catch. As South Africans we keep falling for this trap, free housing, free electricity, free education and now free health care. When will we realise that nothing is ever free?

Away from the State Capture vs White Monopoly Capital battle which is both capturing and monopolising the headlines, news regarding the progress of the NHI (National Health Insurance) has managed to attract some attention, though certainly not enough. For those who have no idea what I'm talking about, the ANC has big plans to create a national, single payer healthcare system similar to Obamacare, or the UK's NHS. The goal is for it to be implemented by 2025, but it has just popped up in the headlines because a couple of milestones in the planning stage have been hit.

This system spells disaster for our country. I know there are many who admire other countries' national healthcare systems and I know that there are many South Africans who are proponents of the NHI because they want to see universal access to quality health care. The foremost criticism of those who oppose the NHI is that they supposedly don't want such. I will say now that I am completely in favour of universal access to quality health care, and it is for that very reason that I oppose the NHI. I admire the intentions of those who expect it to be a great help to the poor, but the road to hell is paved with good intentions, and I am not interested in living in a socialist hell. The NHI is just another brick in that road.

My biggest concerns are the moral issues regarding a government-administered single-payer health system, but first let's look at the practicalities. In terms of affordability, well, it just isn't affordable. We already have a shrinking economy, too much debt and high taxes. There is simply nowhere to pull the R100 billion from without causing extensive damage to our fragile economy. The immediate response from the short-sighted is "Tax the rich!" but the more we tax tax the rich, the faster they are going to leave sunny, socialist South Africa for greener pastures overseas, further hampering our ability to provide access to quality healthcare. Then we have a problem with lack of resources. We have neither the infrastructure nor the human resources, i.e. doctors, to bring the healthcare standards for everyone up to the standards of the current private sector, so in spite of the huge price tag, the standard of health care will improve only marginally for poor, but take a massive nose-dive for the rich. And no, there is no opt-out option for the NHI. Everyone is part of it. So the net result of this legislation will be a mass exodus of educated, skilled middle-class systems, to countries where they can obtain their own affordable quality healthcare.

One of the reasons healthcare is so expensive is because the healthcare profession is like an exclusive club. There are many, many capable, aspiring doctors who cannot get into medical school because of arbitrary and meaningless selection processes and lack of space, all while Blade Nzimande brags about blocking the building of a private medical school, which could provide us with many more doctors. Then there are also all sorts of unnecessary government restrictions that make access to affordable medicine impossible. Government needs to cut a whole lot of red tape, and the cost of healthcare will come down significantly.

And now to the moral issue. The government simply does not have the right to interfere with private citizens choices regarding healthcare, health insurance or anything related. It does not have the right to steal from the rich to subsidize the poor in this regard. Health care is not a right. Health care is a service and one cannot have the right to the services of another person. A baker can expect to bake for whom he wants to bake and a painter can expect to paint for whom he wants to paint, but doctors and nurses, who invest thousands of hours and hundreds of thousands of rands into their education must provide their services to whom the government dictates? We cannot make slaves of our healthcare professionals any more than we can make slaves of anyone else.

This post is already getting long and I have only just touched on some issues. Please comment if you want more information regarding any of points discussed. In conclusion, it is not more forceful redistribution that we need, but a growing economy, a free economy, that will allow people to access quality healthcare for themselves. Yes, I believe everyone should have access to quality healthcare, but it is not the governments responsibility to provide it.

Another One Bites the Dust

We always knew Public Protector Busisiwe Mkwebane was a Gupta appointee despite her rather pathetic efforts to appear nonpartisan, but finally she has flown her colours out in the open. Of course what I am referring to is her findings released last week regarding Absa and the Reserve Bank. The subject of Mkwebane's investigation was an apartheid era bailout of now Absa-owned Bankorp, but her findings ventured many miles from that mandate.

The core finding is that Absa should pay back the R1.125 billion it benefited from the 1985 bailout of Bankorp. I am all for holding accountable those who have unduly benefited from situations like this, but the shareholders who would be punished today are not the same shareholders who benefited during the apartheid era bailout and takeover. Thus it would be unfair to punish the current shareholders and by now, 3 decades later, it is impossible to track down the actual benefactors, rendering Mkwebane's investigation a waste of time, as the likes of Mbeki, Manuel, Gordhan and Madonsela already knew.

It is not, however, just the wasting of time and resources by our state institutions that we are worried about. The major problem is the capture of yet another chapter 9 institution, especially one so symbolically named the Public Protector. Mkwebane had already revealed her Gupta allegiance by having the office's televisions switched to ANN7 and insinuating that the leaked Gupta emails were fake, but now she is chasing after the first bank that closed the Gupta accounts. Also note that this is in light of a questionable relationship with Gupta-associated, Bell-Pottinger-linked Andile Mngxitama and the Black First Land First movement as well as the fact that Gupta-linked figures have condemned, or even talked publicly about the report, especially the other, more controversial part we are yet to discuss.

Before we get to the climax of this story we need to ask why the public protector is chasing a controversial, almost irrecoverable R1 billion and ignoring the R700 billion stolen by the ANC in the last 20 years. To be short, this simply reeks of favouring special interests.

Finally, we get to the crux of the matter. The public protector has no right to recommend changes to the constitution. Simple as that. Mkwebane completely overstepped the mark when she recommended parliament amend the constitution to change the mandate of the Reserve Bank. First, this is nowhere close to what she was asked to investigate, and second, she would not have the mandate to make the those recommendations even if she was asked. Yet we have these ridiculous findings playing right into the vague, unintepretable radical economic transformation rhetoric, designed purely to draw attention away from state capture.

So in the end, what we have, amongst other things, is another ploy to draw attention away from the Guptas and state capture. But it has, in fact, drawn a whole lot of attention to the capture of yet another state institution, the office of the public protector.

Smoke and Mirrors

South Africa is sitting on a precipice. Not since at least the early 90's, more probably the 1950's have we been so close to falling to a certain doom (noting that in the 50's we did fall.) It seems the ordinary folk of our beloved nation fail to comprehend the precariousness of our position. State capture is far more serious than most believe, in fact, academics have described the related events as a 'soft coup'. We are becoming more and more a dictatorship, a monarchy disguised as a democracy. Yet despite the dire situation we find ourselves in, with a moral-less ruling party, rampant corruption and one family slowly taking control of all our supposedly democratic institutions, far too much of our time, attention and media coverage is devoted to a non-issue: race.

Do not mistake me, I do not refute that this is a sensitive issue, nor seek to undermine the gross injustices of our past, but today's racial issues are but squabbles among siblings compared to the world war of apartheid. Take for example the Helen Zille Twitter row. I can only imagine that great struggle icons like Oliver Tambo and Walter Sisulu, who fought real racism and oppression, would be turning in their graves to see the reaction of their once great organisation to a couple of vague remarks that at a push could branded insensitive. It is frankly ridiculous that Zille's tweets have received exponentially more attention than situations that are actually going to have a real impact on the lives of ordinary South Africans, like the appointment of Gupta-servant Brian Molefe to parliament, or the Gupta take over of the SABC, or Eskom, or who knows how many other state institutions. It's simply a matter of priorities, and ours are all mixed up.

So why do we harp on about race then? Why does every unsavoury interaction between individuals with racial differences become a racist event? Why are hours of conversation time on 702 and other radio stations devoted to discussing this, the least of our worries as a nation? First, like I said, race is a sensitive topic, so racialised news is sensationalist. It grabs our attention and makes us angry. For some reason we want to be angry. It is an unhealthy fetish. The second reason is far more dangerous and builds on the sensationalism of the first: that is that it is a powerful distraction. It is a powerful distraction for Zuma, while he plunges the country into crisis. It is a powerful distraction for the Guptas whilst they systematically take control of our state institutions. It is a powerful distraction for the ANC while it buys time to find a solution to it's lack of moral leadership. It is a powerful tool in diverting our attention from the real dangers we face as a country.

What is most worrying is that people still buy this narrative, despite it having been exposed, most notably through the Bell Pottinger revelations. It reveals a great flaw in our human nature, that we are more likely to believe what we want to be true than what is actually true. It lays bare our inability to think critically and illustrates the lack of access many have to opposing view points. The crisis we need to solve as a country is not a race crisis. It is an education crisis. It is an unemployment crisis. It is a state-capture crisis. It is a governmental over-reach crisis. And ultimately, it is a freedom crisis.

Maimane's not so Big Moment

I am amazed, but not particularly surprised, that the Helen Zille tweet row has carried on for as long as it has, and that so few sensible voices have been prominent in the debate. I've had many thoughts on the issue since my post last week. These are a few.

First off, Zille needs berating for her own foolishness, not because what she said was wrong, but because someone with her experience in both politics and journalism should have foreseen the reaction to her tweets. She knows better than most how the racial propaganda war works in South Africa and has been a victim of it enough to have anticipated her moral lynching.

Zille's moment of naivety, however, by no means justifies the manufactured outrage from those who think only in terms of black and white. The dominant argument remains that Zille defended colonialism and thereby offended millions of South Africans who suffered because of it. It's even gotten to the point where the Black First Land First movement has decided to lay racism charges against her. I believe I sufficiently established the ridiculousness of these claims in my last article, but in case you were still in doubt I will further elaborate.

The now infamous tweet series started with a reference to how Singapore achieved major development by building off what the colonists left behind. The whole idea was how South Africa could emulate that, so the argument was never racial nor a defense of colonialism from the start, but merely about how to achieve development. One should not be surprised, however, at the racialist vultures who were hovering, waiting for any misrepresentable statement to cry racist over. Contrary to one popular argument, Zille did not say that there were good aspects of colonialism. She said that there were good aspects to the legacy of colonialism i.e. what we are left with because of colonialism. One can perfectly reasonably call colonialism abhorrent and evil and simultaneously suggest that there are consequences of colonialism that we can exploit to improve the lives of the people.

To sum it up in one question, Do you believe running water is a good thing, that written language is a good thing, democracy, electricity, modern travel? If yes, then you agree with Mrs Zille. The ANC agrees with her, the EFF, even Black First Land First agree with her. In fact, the ANC's own idea of the Developmental State is the same principle Zille was arguing.

Now, significantly, Zille's tweets are supposedly sufficient reason for her to be axed as premier of the Western Cape. We've already established why this is not the case, but let us try to convince Mmusi Maimane of this too. Apparently this is Maimane's chance to step out of Zille's shadow and show that he is the true leader of the DA by beheading his mentor and predecessor. Of course, this is a tempting opportunity, but it would cost him his integrity. Hopefully Mmusi will not fall into the trap baited by his enemies. So for many it is a question of whether Mmusi Maimane will man up and show that he is the true leader of the DA or stay in the shadow of Zille, but really the question is whether he will give up his integrity for cheap political points.

Assessing the Budget Speech

So I was pretty close with my predictions on the budget, though they weren't too hard to call for anyone. One thing that did surprise was the new tax bracket: 45% for those earning more than 1.5 million. We'll get back to that one though.

In the immediate aftermath of the budget speech there was nothing but praise for Gordhan for masterfully negotiating the political tightrope he had found before him. But I think there has been enough analysis on that. I want to focus on what the budget actually means for South Africa.

Perhaps the most notable point is how much emphasis Gordhan puts on reducing the deficit, but while doing almost nothing about it. There was no sign of spending cuts, not even the same admonition to end wastefulness that was given last year. Instead there were increases in social grants (which, as it stands, may not even make their intended destinations) and billions more thrown at education. Now I can sense the immediate protests of "But we need more money for these things!" I'm afraid though that if we keep raising the debt to finance welfare, we will get to the point where it will be impossible to pay for these things at all. Especially in an economy that is growing at hardly above 0%. As much as we want to be charitable, we need to be sustainable to survive. And a budget deficit, especially in our economic climate, is not sustainable.

The little that was done to address the deficit involved raising taxes. unfortunately this is a self-defeating method for such an aim. Having a balanced budget is simple. Income must equal expenses. So if expenses exceed income we can either reduce expenses, which Gordhan hasn't done, or we can increase income, which for the government is tax income. But this is where Gordhan went wrong: increasing the tax rate is not the same as increasing tax income. In fact, the very opposite is true. Often decreasing the tax rate leads to an increase in tax income in the long run. Why? Decreasing the tax rate attracts investment, investment brings economic growth and economic growth results in there being more money to tax.

This is where the new tax bracket comes in. Instant logic argues that 4% is not that big a difference, especially for people earning more than one and a half million a year. If someone can pay 41% surely they can pay 45%. Looking more deeply one may consider that for a lot of people that 4% could be the straw that breaks the camels back. There is only so many times you can take just a little bit more before all the little bits add up to a whole lot. And 41% is already a lot. So that 4% could well drive many people out of South Africa, to countries where they both earn more and keep more of what they earn. And you may say, "Oh, it's only 100 000 people that are affected, and only a fraction of them will leave anyway." But remember, these 100 000 are the people who contribute most to our economy. They are doctors, lawyers, engineers, and especially businessmen and entrepreneurs, the people who have the potential to grow the economy and create jobs. We have already been experiencing a mass exodus of these people and can't afford to lose any more. Marginalising the wealthy has a negative affect on all of society.

Unfortunately a budget that is good for our economy and for the people of South Africa is impossible in this political climate. So taking that into consideration, I too shall have to render my praise to Minister Gordhan for the budget he presented in such trying circumstances.

Preparing for the Budget Speech

It's a good thing that Pravin Gordhan is not one who is easily rattled. At least he doesn't show it if he is. Very few people in any job could be in a more stressful situation than our finance minister is in now. Multiple branches of the ANC are calling for his head, a rumoured potential replacement has been nominated for parliament, and he is preparing for the most important public event on his calendar, the budget speech, which needs to balance powerful conflicting interests.

With the ANC under pressure and policy tide turning toward populism as a release valve on the one hand, and an ailing economy in desperate need of some freedom therapy on the other, Gordhan has his work cut out. He is walking a tight rope. What we want him to say is this: "We are privatising the SOEs, phasing out state welfare and cutting taxes." This would catch the ears of the business world and spark a new era of economic growth. The rand would literally jump in value, but he would certainly lose his job. The ANC Youth League, Women's League and the MKTV would be joined by a host of more conservative ANC structures and members in calling for his head and Zuma would garner more than enough support to bring down the axe. But it's nice to fantacise about a budget that would actually help the economy.

To win back his detractors would require exactly the opposite of what we need. Increase taxes on the wealthy, more welfare and tons of investment in black business. However Gordhan is both intelligent and moral, at least when standing next to many of his ANC comrades, so there is no chance this will happen either. Besides, I doubt he could care less about what Collen Maine and company have to say. No exponents of this line of thinking have ever shown any understanding of economics, or even the ability to predict the consequences of ones actions. Unfortunately these people can say whatever they like, since they are not in a position to make the decisions and so will never be held accountable. No wonder Gordhan ignores them.

What is likely to happen is this: subtle tax increases attempting to raise tax income without driving away investment and subtle spending cuts in an attempt to reduce costs without sending the populists into a state of outrage. This is why he left big issues like income tax and SOEs alone last year and will probably do so again this year while focusing on things like sugar and sin taxes and cutting down on wasteful expenditure.

So I have pretty low expectations for this budget speech. I don't see anything radical happening, for better or worse. Gordhan, for the sake of keeping his job, without ruining the economy, will probably just deliver more of the same. But I hope I'm wrong.