Tag: Jacques Jonker

South Africa’s flirtation with the idea that government should be allowed to expropriate private property without being legally required to compensate owners for it stands in stark contrast to the constitutional democracy we chose 26 years ago and is already doing great damage to the economy.

Democratic Alliance Member of Parliament, Ghaleb Cachalia, who also serves as the party’s spokesman on public enterprises and serves on the Ethics Committee in Parliament, introduced the Public Finance Management Amendment Bill to the National Assembly.

The 26th week of 2020 will prove decisive in the South African political sphere. The business rescue practitioners appointed to try and resurrect South African Airways (SAA), after three extensions and extensive (and perhaps unlawful) interference by the Department of Public Enterprises (DPE), published the proposed business rescue plan on 16 June. The plan, however, is more of a pipe dream than anything else. The political drama about to unfold would be majestic to behold if it were playing out on television. Unfortunately, this is all but fiction.

The Rule of Law was mostly absent during Apartheid when a system of parliamentary supremacy elevated the state's effectively absolute power above all else.

Last week, government addressed the public and announced last-minute changes to the Level 4 lockdown regulations. Whilst these changes angered most and pleased some, the overriding problem with them is the inherent arbitrariness.

South Africa has been on lockdown for more than a week. Integral to the lockdown regulations are the forced closures of businesses that are not deemed 'essential' by government.

Certain senior politicians seem to have a misapprehension of how business rescue works in South Africa, particularly as it regards the situation at South African Airways (SAA). Some within the ruling party recently indicated that government will intervene to 'retain the [sic] SAA as a state-owned enterprise'. This cannot legally be done.

The South African economy is facing a savings crisis. Citizens cannot afford to save enough money to drive the necessary capital generation for investment because of the suffocating effects of the government’s economic policies, such as high tax rates and levies on certain products like fuel.

The trade union federation Cosatu recently called for tax increases, particularly on the wealthy, to arrest South Africa’s economic down spiral. But economist Arthur B Laffer, known for popularising the Laffer curve, shows us that beyond a certain point, tax revenue will decline as tax rates increase.