Friday, June 26, 2020

Covid Finances

Budget supplementary... fine so we are now told as many negatives as is humanly possible. R300billion shortfall in tax collection predicted. 7,2% shrinkage of economy, the worst we have seen in 90 years. The list of course goes on and far be it for me to repeat these delightful predictions here.
Why though are these foisted upon us? Is this a mechanism for us as taxpayers and those who bend under the burden of an incompetent corrupt government, to express our support and say "shame" things are so tough for those in charge? Profits are down we are told- recently it was mentioned that Disney was 91% down on profit earnings. Oh my word...93% down. Share price dropped from $3.53 to $0.26 Let us consider that- In terms of actual profitability Disney still produced a massive profit, despite the share drop. The world in fact did not stop turning. So why should we raise our hands in horror at hearing the profit drop. (look at their statements of Income/Expenditure online freely available at https://thewaltdisneycompany.com/app/uploads/2020/05/q2-fy20-earnings.pdf and check for yourself if interested. We do not focus though on profitability but on the 93% down. Covid earnings loss we are told. The same story echoes throughout the world with economies shrinking "alarmingly"- yes I may well be being somewhat simplistic as we all know that economies need to be stronger, money needs to be flowing in so that governments can grow the respective sections of their country. But do they? Do we actually see any difference at all when the economy of a country is doing well (regardless of Covid- which is an excellent excuse to hide behind when things have been going downhill for a very long time). I would posit that very little changes. The rich get richer and the poor stay way behind with the gap between the "haves" and the "have-nots" growing apace. Do we see the "ghetto" type scenarios in rich economies? Of course we do! Do these governments do anything in real terms to solve these problems. Very little is ever done. Only if the system begins to complain and the economy (political?) is seen in more of a spotlight (world?) is anything ever said! Note "said"- the gap between governments saying they will do something and actually doing is huge.
The only thing that Covid has achieved in the positive sense is that it has placed spotlights on the inadequacy of governments worldwide to be truly forward thinking and prepare for the tomorrows.
The UK has seen some light...electric cars/bicycles and cycle/walking lanes being budgetted for- and we trust of course that as in most cases in governments that the actual budgetted amount is used for what it was supposedly put aside for and not moved to another area. And there are other encouraging signs. But...
South Africa borrowing heavily from as many world sources as possible to merely keep the populations heads above water. Taxi drivers, all 200 000 of them demanding at least a R30 000 "recovery" payment due to lockdown losses. What does this actually say in terms of their true earnings (most of which one can guarantee are never declared for tax purposes. Perhaps a further comment in terms of the fact that only 3 million of the South African population pay personal  tax on earnings (not VAT). 3 million?  Out of a population of some 57 million? And the country is supposed to manage on that amount?
Let me stop my rambling  for now  before I delve into the corruption of things such as VBR bank and past presidents.