Economic review

Nine years ago an International Panel On Growth provided a set of recommendations to our Treasury, which advice has been ignored in the broad thrust of our government policy. One of their members, Hausmann, a Harvard development economist, says that he is taken aback by two things: the overeagerness and magnitude of corruption in SA, and the courage and the energy of society by which this has been resisted. Politically an internal enemy, a scapegoat – white monopoly capital – has been produced.

Purchasing Power Parity is the lani term used for comparing the actual value of a currency compared to others. A better known variant thereof is the Big Mac Index. By this measure, our currency is undervalued, not only against the US dollar (true valuation is estimated to be R10.6) but against a basket of key currencies. The exception, interestingly enough, is the Pound.

SARS calling for the dismissal of judge Davis from the specialist tax committee after his comments that SARS was at risk of imploding, is farcical. Consider this; Davis is said to be part of a “systematically orchestrated narrative” seeking to undermine SARS leadership which would have resulted in a lack of public confidence in that authority. If one considers the latest scandals (VAT repayments?) in which that entity is embroiled in, the criticism was quite probably earned.

Exports to Sub-Saharan Africa accounts for some 30% of our exports in 2015 – significantly more than China coming in at 12%. That region’s growth performance has a material impact on our economy.

Business review

I was taken aback when I read this week that a mere 2% of students who enter the TVET vocational training colleges, qualify in the minimum period of 3 years. Barely a third graduate and, of those who do, many wait years for their certificates. According to another study, 1/3rd of such students pass their first year, 15% the second year and 6% graduate on schedule. The root of the problem appears to be that these colleges get funding regardless of their pass rates, poor career advice given to students and managerial problems. So much for educating youth for the future.

It is reported that the JSE All Share Index returned just 2.6% last year, including dividends. In Rand terms, offshore returns were even poorer. It is said that these trends are unlikely to reverse this year.

The Conduct of Financial Institutions Bill is destined to impose standards on products and services offered by banks, including assessing whether charges levied are fair. This bill is destined for Parliament by year-end.

Tax: the 183 day rule; if you work outside South Africa and if you spend a total of 61 continuous days and an aggregate of 184 days outside annually, then potentially what you earn outside the country will be exempt from South African tax. You may have to pay tax in the country in which you work. The premise is that if one pays tax where you work you should not be paying tax in South Africa. One of the new tax proposals made, holds that if one does not pay tax outside the country, then you should be paying it here, and this exemption is set to be addressed.

Beneficiation: the Tanzanian Minister of Energy and Minerals has banned all export of gold and copper concentrate from Tanzania in order to ensure that the value-edition activities are carried out with in the country. It will be interesting to see how this plays out as I have no doubt that, if successful, our government might well take a leaf from that book.

Property review

Nedbank cautions that there is a looming oversupply in the office and retail property sectors. It predicts a reasonable run in upmarket residential properties, affordable housing and student accommodation.

Loos says that the percentage of properties (under R10m) sold below the original purchase price increased to 12% in January this year, up from 9.8% in August. Compared to the 2008/9 disaster; at that time resale price deflation peaked at 23.5%.

The Estate Agency Affairs Board has apologised to its former CEO for rubbishing her name when she was at the helm of the board. It is said that the reason why she suffered an illegal firing, was that she pursued the abuse of trust funds by some of the biggest names in property. One wonders whether, following on the apology, an investigation will be launched to uncover the rot that she was investigating?

The South African listed property sector has been a consistent performer for almost 15 years. Consensus holds that we are again likely to see relatively solid growth from real estate counters on the JSE. Its performance was second-best on the JSE, delivering a 10.2% return last year.

An Agbiz survey indicates that capital investment confidence amongst agri-businesses declined 13 points from the previous quarter. The drop is attributed to the rise of “radical economic transformation” proposals debated of late.

The Estate Agency Affairs Act is 40 years old and is set to be repealed by the Property Practitioners Bill. One of the changes that the bill will introduce is a demographic change in the composition of real estate practices. In this respect it has been said that the real estate business is still 90% white controlled.

Practice review

Conveyancers and estate agents should note that the updated registration taxes scheduled for Deeds Offices will come into operation on April 1 this year.

It is reported that a former employer of an estate agent compelled its former employee, by way of a court order to update his LinkedIn profile, which showed that he was still employed by that employer. The failure to update amounted to a misrepresentation which could cause harm to the image of the applicant.

Three of the stalwarts of the Judicial Services Commission that appoints judges have been relieved of the position by the Prez. It is speculated that one of the replacements he has in mind, is the representative who represented him in the Spear case and that he may be seeking to load the judiciary with more executive-friendly judges? Furthermore, the ANC wishes to have a re-look at the appointment criteria used to appoint judges to Superior Courts.

Earthlife Africa has had mixed fortunes at the courts this week. It was successful in compelling our Department of Environmental Affairs to undertake a full climate change impact assessment report on the proposed Thabametsi coal-fired power station. Expect this to become the norm for projects such as these.

Cases and such

I hold a copy of guidelines for legal representatives of children in civil matters, drawn by Legal Aid South Africa and the Centre for Child Law, UP. Ask me for a copy

Land instalment sales and recordal

Where residential property is sold in aninstalment sale agreement our Law requires the contract to be recorded within a certain time against the title deeds in order to protect the purchaser from selling the property repeatedly on similar terms. If this is not done the seller may not claim compensation before that recordal. What happens if the recordal is late? Does the obligation to pay instalments halt or must one continue paying until the recordal takes place? The court held that aside from the prohibition on receipt of consideration the statutory provisions do not impact on the terms of the agreement.

Amardien http://www.saflii.org/za/cases/ZAWCHC/2017/14.html ex STBB

Land reform: claimant sold to the SA development trust – is he entitled to more compensation?

In this case, a claimant had sold properties under duress to the SA Development Trust in 1977. He argued that the sum then received was not just compensation. The courts decided that a dispossession had taken place and that the issue at hand turned on whether a fair value for the properties had been paid. At the time the compensation was determined by a state valuer whose determination was clearly not just. Notable is that such a sale does amount to a dispossession and that, if one is able to prove that full value was not received, one would be able to claim.

Minister of Rural Development versus Phillips SCA 52/16

Sham trusts and divorce

A husband and wife decides to start a trust in order to protect assets against attack and save some tax on the side. Given that a trust is a separate entity, is a partner to that marriage entitled to claim an asset from the trust as part of a divorce settlement? This is an evergreen issue which does not have a simple answer. If this interests you, ask me for an article which appeared in the is a Mercantile Law Journal, authored by Shipley.

Quotables

The truest characters of ignorance are vanity and pride and arrogance. Butler

Comment

Rosatom has announced a tranche of bursaries in nuclear studies for South Africans. Disinterested philanthropy? Investing?

Several of our ministers are under siege for their non-performance, not to mention the downright bizarre conduct of our Minister of Social Development, and rightly so. What was interesting a was questions raised about our Constitutional Court. Why, when the storm surrounding SASSA had become apparent months ago, did it wait until virtually three weeks before the deadline before it asked questions?

The state-under-siege situation has led to this State Security Minister trotting out the hoariest of red herrings: foreign intelligence agencies working with “negative domestic forces” to undermine our state and achieve unconstitutional regime change. What is this man smoking?

A new study has found that men who are short and have light skin are more at the risk of premature hearing loss. Interestingly it also found that light skin colour is linked to bone density. Bonehead…

Social distance: the latest PC terminology for out of touch. Applied to politicians who have no idea what is happening in their constituencies.

Officials implicated in the Nkandla scandal are in the process of being disciplined. As a reference point one, could take the recommended donations of the Special Investigations Unit which held that 44 criminal cases be opened, 15 civil cases be pursued and 64 disciplinary charges pressed.

NHI in the making: 15 specialists reportedly have left the KZN public hospitals for private practice. The private sector says this is owing to a head cut for overtime and the state says that this is simply going to doctors following personal development opportunities.

Lighten up

Sometimes the first step to forgiveness is realising the other person was born an idiot.

'Politics is supposed to be the second oldest profession. I have come to realise that it bears a very close resemblance to the first.'

Ronald Reagan

The consensus after the election is that 100% of Americans think 50% of Americans have lost their minds.

Prescient? Today's public figures can no longer write their own speeches or books, and there is some evidence that they can't read them either.

Gore Vidal