Daan Steenkamp's Snippets

News:

  • Deeds Office closures in South Africa, owing to Covid cases popping up in them: If the e-model of examination had been implemented (this has been on the cards since at least 20 years ago) the delays, that we currently experience, would not have occurred.
  • Argument by threat? Your Lordship will say ‘no, you’re wrong, whatever, let’s just have another Marikana. Let’s have whatever might happen simply because this was an order of a higher court and with no authority being cited. I am tying my hands, and I will not be able to prevent that which the police and the president and everyone else seeks to prevent’. Dali Mpofo
  • An application by Bobroff against the NPA, challenging a forfeiture order of funds emanating most probably from unlawful activities, came to nought; Bobroff v NPP [2021] 3 SA 1 (SCA).

Hard news:

  • Freedom of testation does not trump unfair discrimination: where a fideicommissum, created in 1902, excluded female grandchildren, the Concourt was persuaded to intervene. King v De Jager; 2021 (4) SA 1 (CC).
  • The Legal practice Council may not demand that an attorney, seeking to convert his or her enrolment to advocate, first attain a greater qualification than set by the Legal Practice Act; South African Legal Practice Council v Alves 2021 (4) SA 158 (SCA).
  • On the SCA interpretation of the parol evidence rule see §43 et seq. Of http://www.saflii.org.za/za/cases/ZASCA/2021/99.html

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Economy

Our state needs to save money to meet budget restraints. Transnet employees were given a 5% rise. The state has just made an increase offer to it public servants generally of 1.5% plus R1000 – for the bottom end bunch this amounts to an effective 11% pay rise (cost: R11bn). Municipal workers are awaiting conciliation results but are readying to down tools.

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The extra money will have to come from somewhere as the government is “committed” not to spend more. The salary largesse has prompted the revival of talks of a tax revolt – this time led by Kieswertter (perhaps he is just a late starter?) whose argument is that if you choose to punish the government for poor service delivery, the poorest will suffer most. So, one blames those who can pay to prevent the demise of the poor rather than those who administer the money –which is the problem that underlies the spoken of tax revolt? Up

Part of our problem is that we are lifting social spending at an unsustainable rate: 20 years ago, we had 2.5m persons on social grants – today we have 18.2m people on such grants: the difficulty is that this is set against a backdrop of only 14m taxpayers.

Tax nerds would say that we need a program aligning our expenditure with expected revenue.

Much of this reflected in our exchange rates. We decry the Zim economy (in fact, a strong argument against adopting the Zimbabwean economic approaches, is this very fact) – its biggest bank note is Z$50 which equates to US $0.60. Our own R50 is worth only US $3.5 – 10 years ago our Rand was twice stronger. The fact is that we are going Zim, slowly but surely.

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Our neighbour, Namibia, is reportedly struggling with its government debt ceiling which is set at 35% of GDP – a figure last seen in South Africa just post-Manuel.

Business

An interesting note from Moneyweb is on a pushback on exorbitant directors’ fees in listed companies. Good: especially institutional investors should indicate that they do care – just a little bit.

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Another issue, joyfully reported on by Moneyweb, was the age-old debate between active and passive fund managing. The writer produced statistics saying that funds which charging higher fees were more likely to underperform the investment benchmark over time. Therefore, you should invest in passively managed funds. I forwarded this onto my broker with the implicit suggestion that he considers dropping his fees. A long and convoluted argument followed with no drop! In my defence, I had suggested to him a few weeks before the last market crash, that he encash my shares and buy after the drop – a suggestion that met with a long argument and little result.

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The DTI issued a note on the rebuilding of our industrial base with reference to progress with a sugar and poultry masterplan. Reading the note, what is meant, is primarily the entry of small-scale farmers into these production chains. As one who grew up in the age of the Rooi Gevaar, the term Masterplan, and my perception of government efficiency, is such that I am not heartened by this.

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On a more positive note –

  • Nedbank is reportedly moving into a hybrid workforce model accepting that some staff may work from home.
  • Cool Ideas has come out as the best ISP in South Africa.

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Big Pharma must be killing it – profit wise – on the back of the CV 19 pandemic? Obviously, there must be a financial incentive if one wants pharmaceuticals to invest in the research necessary to produce cures. As to great profits, it is reported that listed pharmaceuticals have underperformed the overall market significantly (17% growth as opposed to a 34% growth) over the previous 12 months.

Property

You might recall that the South African listed property market took a marked Covid dive (35% from a total return perspective) over the past year. The sector is rallying and is now around 23% up since the start of this year. It would have been a good buy then.

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Pam Golding says that it continues to receive enquiries from international buyers of South African property. In fact, as regards Cape Town, it says that it has seen more (top end) international buyers in the last year than at any time over the last 5 years.

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A report by the Centre for Affordable Housing Finance, holds that only 21% of our population can afford the cheapest housing available in South Africa. Mention is made of land and capital availability, skills development, reforms, and financing solutions. The fact is that if everyone had a well-paid job, this would not be an issue.

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Further afield: a Bloomberg opinion mentioned that housing in New Zealand is the most unaffordable in the world.

Quotables

Judge for yourself: extracts from Mr Zuma’s application to the Concourt, due to be heard this week:

  • § 12: I approached the Honourable Constitutional Court fully cognisant of the passionate, charged, and strong expression of judicial disdain for my apparent defiance of such orders…
  • § 13: The tone in which the Court conveyed its judicial exasperation and displeasure at my non-compliance with its orders in relation to my appearance at the Commission of Enquiry would ordinarily discourage any litigant from seeking the same court to reconsider, vary and rescind its orders. I approach the Honourable Court dreading the prospect that in dealing with this application against the background of its seminal and unprecedented judgement on summary imprisonment without trial for contempt of Court, I do trust that it will be able to dig from the depths of its judicial being, to extract the requisite calmness and restraint, and adjudicate on my application solely based on its legal merits,
  • § 14:  ..it will not be futile to make one last attempt to invite the Constitutional Court to relook its decision…
  • § 19: Imprisonment will not serve any constitutional value but may be a political statement of exemplary punishment which does nothing to affirm the court as the supreme custodian of our constitutional rights. As already indicated by the premature celebrations of newfound upholders of the rule of law, it may also satisfy the vengeful appetites of my political foes…
  • § 98: This unprecedented and cruel regime has therefore been custom-made and specifically designed for me because it is statistically impossible that in the future, another former Head of State who is almost 80 years old, will be forced to appear before a chairperson of a commission who is accused of bias and conflict of interests. Only Jacob Zuma will fit that bill. Any other future case will be easily and conveniently distinguished, for good reasons.

Comment

When Mr Zuma, the carrier of the hopes, dreams, and aspirations of a people, says that we are sliding back into the apartheid era, he levels an accusation no more at the former white government, but at a black government which has been in power for 25 years. This accusation has spawned widespread disruption, in especially KZN. Despite his accusation being devoid of fact and reason, his incarceration has resulted in widespread anarchy in this province. Clearly, there are many who do think that he is above the law.

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A writer in BusinessDay fingered two maladies holding back the development of this country i.e., crime, and joblessness. 

Our government does not seem to be addressing these issues.

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An investigation on the effect of the pandemic on our school dropout rate, pop reports a dropout rate of 500,000 children from our schools over the past year. This disturbing trend will certainly be paid for by future generations.

Lighten up

On stupidity:

  • In politics, stupidity is not a handicap. Bonaparte
  • Q: What do you call a man with half a brain? A: Gifted.
  • Only two things are infinite, the universe and human stupidity, and I’m not sure about the former. Einstein

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Contributed by:
Daan Steenkamp Attorneys
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