Christmas and taxes


IT’S Christmas time again. A special time to spend with family and friends. It could have been more special – had it not been for the political elite determined to milk us our earned income – through taxes.

Have you ever thought how much you’d be earning, were you not paying taxes? Do the math. Your Christmas holidays would have certainly been much better.

Seldom do we people question government taxation policies and their disturbing impact on our lives. That I take as serious ignorance from our part. We keep silent as politicians tirelessly take our money, deny us a decent Christmas, and spend it on their ineffective and inefficient programs.

Government taxes us every day. Every day. When we buy a meal they tax us, we fill up at the petrol station they tax us, we buy nice clothes for Christmas they tax us, we buy booze they tax us. That’s separate from taxes they take from our salaries monthly. They are surely making hell of a lot of money this festive season.

What makes things worse – is that the return on the investment is sub-standard. The quality of our government services is disturbing. Truly indicative of the necessity of tax reforms that aim to slash taxes and boost economic growth.

I have always been wary of the state intervening in anything through tax payers’ money – education, parenting, healthcare, business etc. Rightly so. States tend to always overreach in their interventions in these areas – because of politicians who want to look good and get votes at taxpayers’ expense.

However, given the fact that we live in a world where some people – like my family who could not afford sending me to university – grapple with life trying to make ends meet – there has to be some form of government intervention to assist those people.

Then the challenge, I personally believe, is how do you keep that intervention as limited, pro-human choice, pro-market as possible. This basically means taxes must be limited.

We have to tilt our thinking to a direction that acknowledges taxes destroy prosperity and ought to be as low as possible. That thinking won’t be brought by politicians for sure. Most politicians want our tax money so they spread it around for the purposes of getting more votes in the next election. So we can’t expect much from them.

The initiative has to come from us active citizenry. We will first have to confront the fact that it is dead wrong of us to vote politicians who promise us “free goodies” into the public office. The “free goodies” concept is a classic left wing fraud – that envisions a society where things are free – don’t have to be paid for.  Such a world is a fantasy – it doesn’t exist and will never exist. Nothing is free. They, politicians, will use your money for these “free goodies” – and deny you a decent Christmas with your family and friends.

On taxes and politics, my favorite economist, Thomas Sowell of the Hoover Institution, once said “Someone once said that taxes are the price we pay for civilization. That may have been true when he said it, but today taxes are mostly the price we pay so that politicians can play Santa Claus and get re-elected.”

It’s very hard to disagree with Thomas Sowell. Indeed, today’s taxes are the price we pay so that politicians like Jacob Zuma, play Santa Claus by providing “free” education. All in desperation for votes.

Christmas comes once a year – and I believe all of us should be grateful every time it reaches us. It’s a special time with the people we love. At least it ought to be one.

It is the political elite who constrain us from having a better and decent Christmas through high taxes. We deserve better. PM

Merry Christmas and Happy New Year


Money will play a big role in shaping ANC’s election outcome


LOOKING at the African National Congress (ANC)’s upcoming elective conference, one is struck by how close it is. It’s so close that it has become very difficult to predict who will win. Many of us who watch South Africa’s political and economic trends closely, never thought Deputy President Cyril Ramaphosa would perform as well as he did in Mpumalanga and KwaZulu Natal during the branch nominations process; in contest for the next leadership of the ANC against Nkosazana Dlamini-Zuma.

There had been speculations that post the provincial general meetings, one of the two camps would compromise to avoid the split of the party, according to the left-wing Mail and Guardian. But neither candidate has backed down ahead of this crucial conference.

The closeness of this race, the huge political interests at stake, and the staggering corruption still afflicting South Africa’s society, all, should be a sign that money will be a huge factor in deciding the outcome of the elective conference. The selling and buying of votes, that the Secretary General Gwede Mantashe, warned the delegates about not long ago, is already taking place and will take place at the conference. The manipulation of the process has already begun. We would be fooling ourselves to think otherwise.

A great deal is at stake for the parties involved in this nasty race – especially for Jacob Zuma-backed camp – led by Nkosazana Dlamini-Zuma. If Dlamini-Zuma’s camp loses at the elective conference, the president’s future becomes even more uncertain.

Already, there are strong calls to have him removed from his presidential seat by early next year, after his term as president of the ANC finishes this month. Jackson Mthembu – ANC’s top Member of Parliament and supporter of Cyril Ramaphosa – has said Zuma must vacate his office after the conference – so the ANC cleans itself up and prepares for the national election in 2019.

We all know what will happen if Jacob Zuma gets booted out of power before the end of his second and last term as President of South Africa in 2019. The investigations on state capture allegations and the decision whether to prosecute him for his corruption charges will speed up – which could culminate in him facing the court of law. Something he has dodged for years.

President Jacob Zuma wants someone, people, he can trust to negotiate with on the matters pertaining to his corruption charges. He trusts Nkosazana Dlamini-Zuma – his ex-wife – she’s from KwaZulu Natal – there’s a cultural connection between them.

The North Gauteng High Court’s ruling last week – that the appointment of Shaun Abrahams as the National Director of Public Prosecutions (NDPP) was unlawful and must be set aside – and that Deputy President Cyril Ramaphosa be the one appointing the new NDPP – has put the president in a very awkward position.

The president is appealing the ruling; in part because, I believe, he wants to see the outcome of the elective conference. If his favoured camp loses at the conference – it will certainly be the end of his presidency and power. He will surely be axed by the new leadership – and Ramaphosa will follow suit as ordered by a judge – and appoint the new NDPP who is likely to prosecute Jacob Zuma without delays.

The president understands these forces at work – he’s a political genius – a master tactician. And that is why he knows his camp has to win, must win, at the conference.

If Jacob Zuma’s camp wins – thereby consolidating their power in the ANC – Jacob Zuma could fire Ramaphosa, at worst. So that someone else, the new deputy president, preferred by Zuma, appoints the new NDPP.

If he does not expel Ramaphosa – because it’s highly likely that the new ANC national executive committee (NEC) would refuse such an action – he would, along with the NEC pressure Ramaphosa to appoint the NDPP who’s likely not going to prosecute him, let alone pursue the state capture allegations objectively.

Given these circumstances – the money is playing, will play, a big role in this presidential contest. It will shape the outcome of the occasion. And given this reality – I urge South Africans not to read much into what is reported on the media – a media that seemingly – wants to see Ramaphosa win the elective conference.

It’s not clear much is at stake for Ramaphosa. He’s been a businessman since 1990s – and is not in desperation to avoid courts – as some of his counterparts are. He acknowledges that the ANC is in trouble and needs reformation. Given this fact, it’s hard to imagine him going too far, for the purpose of winning this race. Though some in his camp may.

It’s a brutal contest for the soul of Nelson Mandela’s ANC. The stakes are too high for the parties involved. It is a power struggle – of which the outcome will shape South Africa’s future in many ways. And it seems, those most desperate, with most money, have no other option but to win. PM


Can South Africa’s basic education be fixed?


THE state of South Africa’s basic education is a topic of constant debate – by political parties, the media, civil organisations and the general public. Even though basic education has had a positive impact on South Africa’s development post-apartheid, problems such as dismal educational outcomes and the absence of teachers torment us, and, especially, low-income families.

These problems aside, some progress has been made in addressing and eradicating the legacy of apartheid in education. Increased access to education has accelerated the growth of the black middle class so that, for the first time, in 2008, the size of the black middle class surpassed that of whites.

Throughout human history, education has been a big factor in the development of nations, and, therefore, South Africa’s prosperity is dependent on the quality of its basic education.

Even though South Africa’s education faces many challenges, it is fair to say that, on balance, the opening up of educational opportunities has had a positive impact on our society.

South Africa’s basic education challenges

Even with the progress that has been made since 1994, relative to the past, South Africa’s basic education is not doing as well as in other countries. Government is failing in many respects to pursue the reforms needed to improve the country’s education.

Besides the absence of teachers and dismal outcomes, other problems that challenge the provision of education in South Africa range from the shortage of educational facilities, to overcrowded classrooms, and the destructive actions embarked upon by teacher unions like SADTU (South African Democratic Teachers Union).

Most affected by government’s failure to improve public basic education are children from low-income families – where parents cannot afford to seek out alternative sources of education for their children.

Twenty per cent of South Africa’s government expenditure–the biggest allocation compared to other sectors, goes to education. Yet the outcomes still disappoint.

According to Africa Check, South Africa ranks behind poorer African countries like Kenya, Swaziland, Tanzania and Zimbabwe on literacy and numeracy. That we are behind these poorer countries with all our privileges ought to unsettle us all.”

In Trends in International Mathematics and Science Study (TIMSS)results released in 2016, South Africa ranked second last in the world. African countries like Botswana, Egypt and Morocco, performed better than South Africa.

Could independent schools be the solution to South Africa’s education problems?

As government fails to produce desirable results on public education, reforms are urgently needed to make improvements. Government needs to look into encouraging and creating an environment where independent schools can thrive and grow.

Independent schools are already having a significant impact on South Africa’s education. Between 2000 and 2010, according to an article that appeared in The Economist in December 2015, the number of government schools established in South Africa fell by 9%; while that of independent schools grew by 44%.

But parents from low income families cannot afford many of the independent schools. Private education is expensive. Government needs to find ways to encourage the establishment of low-fee independent schools to fuel not only competition between private schools, but also competition between low-fee private schools and public schools, and so improve overall basic education in South Africa.

Low-fee private schools have a huge potential. The Spark school in the suburb of Bramley, is a good example of the kind of education system the government could pursue.

“Quality independent schooling such as Spark, priced at R19,100 a year, means families with widely different incomes can afford to, or simply choose to, send their children to low-fee schools,” Lisa Steyn wrote in the Mail & Guardian in December 2016.

Schools like Spark are badly needed, and the task for government must be to encourage the growth of such low-fee schools so that education becomes competitive and its quality improved.

Competition would improve not only private education, but also public schools, because public schools would have to compete with other schools by providing quality education for South Africa’s youth.

The role played by businesses, parents, and communities in general, is critical in any effort to improve the education sector in this country. These stakeholders, other than our bureaucratic government, must assume greater control of the schools in their communities. The participation of the private sector in our schools would demand greater commitment from all involved.

Dr. Thomas Sowell, a senior fellow at the Hoover Institution, once said that there are no solutions in economics, there are only trade-offs. Competition will not be the solution to South Africa’s education problem – but it could be government’s first step towards bringing about significant reforms in the sector. PM



Sugar tax: It’s about personal freedom


FOR us who deeply believe in personal freedom, it is troubling. The notion that South Africa’s political elite unashamedly wants to tax us for consuming sugar and constrict our market choices, is deeply, deeply troubling.

At the present moment, I’m convinced the pistol is aimed our way. And it seems, at least to me, we can’t dodge the bullet in this situation. We will have no option but to abide by the political class’ sugar tax policy aimed at controlling our lives, if implemented. And frankly speaking, I doubt it will not be implemented.

I think the public hearing in parliament this week was not about its economic or health feasibility; well, it may have seemed like it was; but it was not, in my opinion.

The hearing was about whether the political elite should meddle in our lives, through taxes to discourage us from making personal choices about sugar; or leave us alone to decide on the amount of sugar we want to consume. That is what the public hearing was about, not the economic or health feasibility of the policy.

The department of health and the department of the treasury would be delighted to see the sugar tax policy implemented. And they are not the only people seriously wanting this. Even health experts want to see it rolled out. One of these health experts is Dr. Frank Chaloupka, a health economist from the University of Illinois, United States.

At the public hearing, Dr. Chaloupka cited Mexico as an example where the sugar tax policy, implemented in 2014, has produced desirable results – and reduced the drinking of sugary beverages by 11% by 2016.

He further said that, according to the Sunday Times report, a 10% reduction in South Africa would mean 189‚000 less people developing diabetes and could prevent 18 900 premature deaths.

The statistics pronounced by Dr. Chaloupka are statistics from his research, we cannot simply reject them. But we can certainly oppose his tax recommendations to reduce the consumption of sugar and alleviate disease.

His support for sugar tax is a clear reminder that people with fancy degrees can be very destructive to our society – when they do not uphold or believe in the principles of personal freedom.

None of us conservatives and libertarians oppose efforts to discourage consumption of sugar; at least I do not. Diabetes, tuberculosis and other diseases ought to be a concern to all of us. We all want a healthy, educated and prosperous nation. But the sugar tax approach isn’t the way to discourage sugar, quell disease and enrich this country.

A balanced approach is very much needed. As much as we want to overcome our socioeconomic predicaments, we must be cautious not to do it at the expense of peoples’ liberties, as personal freedom must be superior in public policy.

To department of health’s concern about the burden on the healthcare system, yes that may be true – but the suggestion that sugar tax should be adopted at the expense of personal freedoms, must be rejected outright.

We cannot and must not trade personal freedom for alleged low healthcare costs. We ought to think about other pro-liberty ways to discourage high levels of sugar consumption and fight disease.

Perhaps the better approach would be for government to educate people about the dangers of sugary beverages. Government can rigorously disseminate information so South Africans make informed decisions in the market. This may not be the best approach but it certainly is better than a sugar tax; because it upholds personal freedom.

We are unfortunate to live in times where government wants to be our nanny. Politicians think they can do almost anything to turn our planet earth into heaven – where there are no diseases and everybody is rich.

They see themselves as Messiahs who have come to save our world. In their pursuit of a heavenly world, peoples’ freedoms, in the process, are restrained.

We have to be very thoughtful on what our government can and cannot do, especially in a country that has a very small tax base, staggering unemployment and a rising public debt. The growing government by the ruling African National Congress (ANC) is a serious threat to personal freedoms. It must be spoken against and its potential tragedies highlighted.

This sugar tax debate must not be focused on the economics and health of the policy; individual freedom must be priority number one; the other stuff can come behind. Because it is not about whether this policy works or doesn’t work, it’s about the safeguarding of personal freedoms. PM


Where is Chris Hart?


I DON’T know about you, but I miss Chris Hart’s shrewd analysis on South Africa’s economic and social issues. I seriously do. I was thinking about him this week. I noticed on his Twitter account that he last tweeted on the 3rd of January 2016. He’s been silent ever since.

It is depressing that a man so incredibly smart on matters of economics has been silent this long. I have met Chris numerous times at the Free Market Foundation South Africa (FMF) in Bryanston. Last time I saw him was when he gave a brilliant talk titled “The Watershed” at the FMF. He’s a great man. That I do not doubt.

Hart was, after a string of tweets expressing his views about South Africa’s lacklustre economy, crucified for tweeting “More than 25 years after Apartheid ended, the victims are increasing along with a sense of entitlement and hatred towards minorities…”. Many, including his employer, Standard Bank South Africa, deemed this tweet racist. He had to apologize. Standard Bank South Africa suspended him.

My fellow South Africans, we have to face the reality here: South Africa’s economic future looks gloomier – and we shouldn’t expect any positive news anytime soon.

In his recent budget speech, the finance minister, Pravin Gordhan, stated that his department projects 0.9% economic growth this year. Unemployment remains one of the highest in the world – close to 40%. The rand has become too weak. Prices have risen. Electricity is going up. E-tolls, for us living in Gauteng have gone up. Taxes went up last year and they are going up again this year. Government spending continues to rise. This economy is in a serious crisis.

And government is the architect of the crisis we are in. E-tolls are government’s project, electricity is going up because government has monopolized the energy industry by its ownership of Eskom and barriers to entry. They raised taxes to finance their airlines company called South African Airways, and, of course to finance welfare.

The unstable economy and President Jacob Zuma’s scandals in his administration are partly to blame for the weakening of the rand. Unemployment is high for many reasons, including sectoral minimum wages and government’s regulations that stifle business growth.

Chris Hart has been terrific in identifying the root source of South Africa’s above economic woes. He’s also been honest on what he believes ought to be the approach to escape this crisis. Government, should exit the economy. Clearly, it is inflicting sever harm to all South Africans, especially the most vulnerable, us the poor.

Because of these disastrous policies and programs, the economy will grow by less than 1% this year. And it could be worse. The Institute of Race Relations’ chief economist, Ian Cruickshanks, projects 0% economic growth in 2016. Given this reality, how exactly are we going to create jobs for the millions of people who are unemployed? The economy needs growth, and it’s not there, because government represses it.

And politicians never ever acknowledge the fact that it’s their policies that are a problem. What they go around telling people is that we are in a crisis because of some selfish, greedy capitalists; and that government must intervene more into the economy. It’s never ever about their policies.

The outcome of all this is serious damage to our society. We have developed the thinking that we are entitled to other peoples’ properties. That some greedy capitalists out there owe us something; and that we are entitled to taxpayers’ money. It is this sense of entitlement that has produced turmoil in our universities. Students feel they are entitled to the so-called free higher education. Well, it is not free, somebody has to pay for it. Who should it be?

I’d argue that the source of xenophobic attacks was also a sense of entitlement. We assaulted and burned our fellow Africans to death; looted their shops they have worked too hard for.

As a well-informed economist, Chris Hart sees this huge problem. I see it too, and have written a few pieces about it. He spoke the truth – we are suffering because of government’s disastrous policies. And the increasing sense of entitlement is worrisome.

It’s time to get serious about the future of this country. To move forward, from now, we’ll first need to face the reality – that government is a problem. It is we the people who can make our country a better place.

Mr. Hart should come back. He’s contributed immensely on the field of South African economics. This is a critical time for our nation. His voice is needed. PM


South Africa’s obsession with race will impede its progress


AFTER President Jacob Zuma’s flip-flops with the finance ministry last week – sacking Nhlanhla Nene as head of the ministry – and appointing the African National Congress’ backbencher, Desmond van Rooyen – and then replacing him with Pravin Gordhan – all this in less than a week – thousands of South Africans had had enough. They took to the streets to protest against Zuma’s leadership.

The marches were huge, all races came out in large numbers to call for the end of Zuma’s presidency. But the huge turnout of whites raised questions from many South Africans. They branded the whites’ turnout racist – a protest against black government. Some said that they should have also protested in the apartheid era, against the then racist and oppressive government, and, in the march against the increase in university fees last October.

I was disappointed to see people speaking this way. At a time when we face a problem that affects us all as South Africans – a crippled president ruining our country; couldn’t we at least, for now, unite as citizens of the Rainbow Nation on an issue this critical? This was an opportunity to show unity and speak with one voice.

I just cannot fathom the narrative that if a significant number of whites, who are productive citizens of the country and pay taxes, is visible in a march against an incontrovertibly corrupt and incompetent state, it is racist. President Jacob Zuma has inflicted serious harm to this country. The Economist wrote a very intelligent and insightful article this week, on how Jacob Zuma has ran South Africa into the ground, since he took the presidential office in 2009; and we all feel the pain.

So I do not think it was necessary to invoke race in this march. The nation is clearly on the wrong path under Zuma – and when the implosion ensues, we will all suffer, blacks and whites.

Most of the people who discredit the march along racial lines are the same people who today, call Nelson Mandela a sell-out. Why? Because, in my assessment, by the time Madiba negotiated with the apartheid government to form a new democratic South Africa, and then became the president of the country, he had renounced Marxism. He chose reconciliation, democracy, and improved relations with the West. He had recognized that socialist policies do not work. And that to move forward in a way that benefits us all, we have to, at least to an extent, embrace free markets economics.

Now, according to these left-wing hardliners, whites’ assets should have been confiscated, they should have been taxed at a rate of almost 100%, key sectors of the economy should have been nationalized so that government can address the racial imbalances that existed at the time. In other words a Marxist revolution should have taken place.

Do they realize how catastrophic that would have been? We would be worse off, all of us, blacks and whites. The racist Marxist policies would have impoverished the country.

Even though the apartheid government claimed to be pro-market and capitalist, the fact is it wasn’t. It pursued racist, statist policies in order to suppress people’s freedoms. It wasn’t working. The net outcome was negative.

Another example is Zimbabwe. It’s racist, statist rule over the past fifteen years inflicted sever pain to the people of that country. Poverty and political violence forced many Zimbabweans to migrate to Europe and other countries, more than two million crossed the border into South Africa, most illegally.

Julius Malema and his party, the Economic Freedom Fighters (EFF) have started to violently seize people’s properties. The party wants a socialist revolution – which would produce the very chaos and human rights abuses that Mandela tried to evade.

No-one denies that racism exists. It exists here, in Europe, and everywhere around the world. But we should be careful how we deal with it. Let’s not point to racism even where it is unnecessary. Where we are all affected by the incompetent and the ever-expanding state, we should speak with one voice. By that I do not mean the protests against Zuma were people’s discontent over the expanding state and the suppression of liberties. Many of the protesters were just sickened by President Zuma the man. They have no issues with the idea of an interventionist government. But, it’s good that they reacted to Zuma’s recklessness.

Trying by all means to look beyond race and recognizing that racist policies won’t work, while addressing our challenges on unemployment, the incompetent government, poverty, and education; is the only way we can become a better country. The obsession with race, will impede our progress. PM



The solution to South Africa’s gun-related crime is not tighter gun-control laws


IT WAS a night of horror in our house at Roodepoort, Johannesburg, two weeks ago. Two armed men stormed into the house, assaulted us, and robbed us our cell phones, laptops and other possessions. It was a traumatic experience – one that left us in fear. We became victims of crime and felt violated. The incident got me thinking about a much bigger problem South Africa faces – the astonishing high rate of gun-related crime.

This country has one of the highest crime rates in the world. Millions of South Africans are victims of crime every day. It’s something that continues to taint the image of our nation. With so much potential, crime is one of the many contributors to the sluggishness of our socioeconomic progress.

We lead the African continent on the murder rate – which is one of the depressing statistics to learn about. We live in a society where a citizen is intentionally murdered with a bullet every few hours. Roughly eighteen people are killed in this country every day. These statistics are based on the reported criminal incidents. Many are unreported – which therefore means the problem is much larger than what the statistics tell us.

The robbery happened in a secured complex, with a security guard, cameras and electric fence – where we thought we were safe. We were all puzzled as to how they came through, and how they could have left so easily. If they could do this in a secured building, then how vulnerable are the citizens living in townships and poor neighbourhoods? These are places where the police pass by once in two weeks.

It’s clear we need solutions that work to quell this disturbing crime. We need a justice system that works.

But, our government thinks the appropriate way to address this problem is by tightening gun-control laws – a terrible mistake.

A week ago, the minister of police, Nathi Nhleko, told delegates to the National Dialogue on Crime and Violence in Boksburg on the East Rand that, guns were used in many serious crimes. That to fight these robberies and gun-killings, there needs to be an investigation into ways to tighten gun-control laws. He wants to amend the Firearms Control Act (FCA) to further tighten the current gun-control laws.

I wasn’t surprised by his words. Many people believe the way to quell gun-related crime is through gun-control laws. The problem with this argument is that it ignores the fact that the law-abiding citizens do and should have a right to own guns.

Even though the FCA came into effect in 2000, South Africa’s violent crime remains one of the highest in the world. Why? Because what such laws do, is disarm the law-abiding and peaceful citizens, while criminals do get hold of guns.

I doubt people who speak like the minister have ever had to go through the experience of seeing a gun or a deadly weapon aimed at them, in a matter of life and death. I doubt.

You know, it took criminals at least forty-five seconds to break into my room as I was inside. After assaulting us and taking all we had, I thought to myself, if I had a firearm, perhaps I would have protected our property from these heartless outlaws. Perhaps, our belongings would still be with us. That’s what I’ve been thinking ever since.

It wasn’t the first time this happened to me. It did happen in 2012. My computer and other stuff was taken away too. The feeling was the same – that had I had a firearm, my belongings would have never been taken away.

So I’m really baffled by people who argue for gun-control laws that deny the law-abiding citizens the right to own guns in order to protect themselves and their property. The FCA is in force, and yet, criminals do and will always have access to guns. It’s the peaceful citizens who are and will be left defenceless.

What we need is a justice system that works to protect us from criminals. That’s all that’s needed, not disarming hunters and people who want to protect themselves and their property. The police must be effective in their job. And we should stop the leniency towards criminals. They should be held accountable for their evil deeds, and we should be harsh on them. That’s the way we should fight crime while ensuring people’s liberties (including liberty to own firearms to protect themselves) are left intact.

What happened to us last week made me think this will happen again. What’s frightening, is that, as I mentioned above, South Africa ranks amongst the top countries with violent crime in the world. People die daily here.

With criminals owning guns, the inefficient justice system, and the law-abiding citizens denied the opportunity to defend themselves, I’m hopeless. And the situation is likely to deteriorate as government enacts more and more gun-control laws. How sad. PM