Thursday, February 21, 2008
Budget Reviewed and Sense and Sensibility (or lack of) now no: 2 on OHMYNEWS
Above: SASOL stands to benefit as the world's leading coals to liquids synethesiser in the world. Invest in SASOL stocks and you'll do very well. Coal too.
Part of the job of Finance Minister (think of Allan Greenspan too) is to 'be positive'. To say things that will please the market. Greenspan has made some pretty worrying statements after he resigned, including the most obvious one: "The war in Iraq is about oil." Are the markets too sensitive to deal with 'too much' reality? Apparently so.
So the cup is ALWAYS half full. Last night the Rand was R7,87 to the dollar (a five year low) as speculators feared capital flight, but after checking the fineprint we're back to 'normal' levels (whatever that is). Sure enough the economy - reflected in terms of the JSE - is right as rain again, bouncing happily up to 30 000 based on fundamental bullshit. Someone makes a speech and says, "Hey, things aren't so good, but really, they're not so bad either." What does that mean? So if everything is right as rain and the storm clouds are gathering (presumably for more rain) but all's well in Vegas, where is all this going? Back to Delusionville. Financial Wishfulthinkington. The JSE is up 1.82% to 30025.240.
Ummmm...guys...the Rand is R7.84 to the $ and oil prices are at $97. Koo Koo. A bit more gloom might be called for. After all, the country remains what it was yesterday today. The pothole below (now a small mine shaft) has been around for upwards of a month now...and growing. But ha ha, there's so much money in the budget, all these little niggly things will be fixed chop chop.
Re-he-heally? Maybe it's just more money to be lifted, creamed off the top. I don't know about you, but despite massive budgets allocated to roads, I don't really see much roadworks going on. But I'm not going to join a street protest (excuse the pun) anytime soon. We don't need our roads in good nick, we need rail to be on song.
So this was the aspect of the Budget (2008) that I was particularly interested in - New Infrastructure Investments.
Also in the Budget is an additional R8.2 billion for public, transport, roads and railway infrastructure, while there is an additional R2 billion for 2010 FIFA World Cup stadiums and related infrastructure.
R8 billion to be spread across transport infrastructure in a generalised sense...Hmmm. Seems like there is no awareness, no need to affect TRANSFORMATION in the manner we are living. I know it's to be expected. But we will come back one day and say: "In the face of the overwhelming evidence that we could no longer afford to continue living the way we were, why did we continue?" In this sense the Budget is inappropriate. I'd support the allocations to the poor, but we are going to sukkel to remain a car crazy culture as soon as between now and the end of the decade. By sukkel I mean there will be times when we will not be able to drive anywhere simply because we won't be able to supply the whole country with daily fuel demands. This has happened before and it will happen a lot more in future. Hence investments in rail.
This is a soft voice withering in the wilderness, but mark these words. All the applause for a great budget is also a national endorsement of a license to consume - in a basic sense - as we have been. And that's nuts.
South Africa: 2008 Budget Lowers Taxes, Keeps Surplus
To read 'Where's the Sense in South Africa?', go here.