a country renewed with hope but not yet reformed....a country renewed with hope but not yet...

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A country renewed with hope but not yet reformed.

Context international and local economy

Growth improves World vs SA SA Business:

Vanity; Sanity and reality. SA consumer.

Myths about debt and savings. The Budget

The Burden and how we spend it.

Does government spending result in success?

3

Copyright economistscoza (#)

Copyright economistscoza (#)

Copyright economistscoza (#)

SA Business can be measured in a few fact based ways. It is doing okay and here is why.

Copyright economistscoza (#)

The SA Consumer and Worker. Doing better than they think!

3/14/2018 18Economists Dotcoza0 5,000 10,000 15,000 20,000 25,000

Argentina Malta

SA gold minerSA Government

Turkey Poland

SA TransportSA Metal Worker

Thailand Chile

Malaysia Brazil

SA Farm worker Ukraine

SA Domestic UrbanSA Domestic Rural

China Russia

Philippines Indonesia

Mexico India

Vietnam Bangladesh

Cuba

19

21

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African Coloured Asian White

Owned 56.7% 55.5% 50.1% 45.0%

Occupied rent

free 16.2% 14.4% 3.7% 2.7%

Rented 25.8% 29.1% 44.8% 51.1%

Value of houses

owned of total 55.6% 6.8% 5.1% 32.5%

Source: StatsSA General Household Survey. Middle values taken for value calculation by race. Owner own estimate.

Copyright

economistscoza

24

You can give me tax rates and levels but I think one should look at what is actually paid!

0 5 10 15 20 25 30 35 40 45 50

Lesotho

Denmark

Namibia

Swaziland

Trinidad & Tobago

New Zealand

South Africa

Sweden

Austria

Jamaica

Botswana

United Kingdom

Greece

Belgium

Togo

Cyprus

Italy

Georgia

Belize

Israel

The world average total tax to GDP is 15% and SA is at 27,3%. This is for 2015 and SAin seventh place. However SA provides money from the customs Pool which means SA in effect pays for three countries above us. We are therefore in real life in fourth place for Total Tax Revenue to GDP!Again we leave out oil exporter and countries with less than a million people. Data mainly for 2015 but emerging markets can be 2013/4

0% 1% 2% 3% 4% 5% 6% 7%

Malaysia

Hong Kong

Cyprus

Cuba

South Africa

Bolivia

Uzbekistan

Namibia

Tunisa

Thailand

Morocco

Australia

New Zealand

Azerbaijan

Japan

Peru

India

Chile

Singapore

China

SA has 5th highest CompanyIncome Tax to GDP Ratio in the World. This is at 5,4% and the simple average is 2,8% The median country is Denmark with 2,59% burden about half SA company burden. (2015 ICTD)

0% 5% 10% 15% 20% 25% 30%

Denmark

Finland

New Zealand

Belgium

Sweden

Canada

Italy

Australia

United States

Austria

Germany

South Africa

United Kingdom

Switzerland

France

Netherlands

Lesotho

Ireland

Portugal

Namibia

SA has the 12th highest Personal Income Tax (PIT) Burden in the world! Some of our Neighbours are also high such as Lesotho and Namibia fall into the top 20 of countries. I only included countries with more than a1 million people and that do not export oil. Oil exporters generally have lower PIT so the excluded them in the simple average. The simple average Tax burden of individuals is 4,3%. The typical country has a PIT Burden of 3,2% and is Croatia. SA is more than Double these countries and is getting higher slowly but surely.The Data come from ICTD and UNWider. (2015 some 2014)

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1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

Euro area World South Africa

SA is going to go past 29% and close to 30% now!

How big is government spending and what are the trends!

25.0%

26.0%

27.0%

28.0%

29.0%

30.0%

31.0%

32.0%

33.0%

34.0%

Expenditure as % of GDP

0% 2% 4% 6% 8%

Education

Health

Social Security

Housing

Police & Justice

Defence

Economic Sevices

General Admin

Interest

1998/99

2007/08

2017/18

3/14/2018 33Economists Dotcoza

37.9%

48.8%

41.6%

55.0%

20%

25%

30%

35%

40%

45%

50%

55%

60%

1/1

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07

6/1

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7

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10

/1/2

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0

3/1

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1/1

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Wage bill as % of Tax revenue.

Consolidated Government salaries as % of tax revenue

Total government salaries (including universities) as % of tax revenue

Some data will surprise you!

65.1

69.568.4

67.2

58.4

56.3

60.4

40

45

50

55

60

65

70

75

1993 1996 2000 2005 2009 2010 2014

The % of the population living below $5.5 per day as per World Bank. 2014 is my estimated based on StatsSA numbers.

This is not absolute poverty but rather not having all your needs met. Thus Food; clothes; Transport; housing; school; etc.

0.66

0.70

0.72

0.70

0.69

0.71

0.63

0.64

0.65

0.66

0.67

0.68

0.69

0.70

0.71

0.72

0.73

1995 2000 2005 2009 2010 2014

Gini Coefficient of SA

The World Average for the number of children per teacher is 24. High Tax Europe is at 14, South Africa is at 32 and without the fee paying schools this will be close to 34 children to a teacher.

Our International test results are shocking e.g. PISA etc. Our success at finishing school i.e. passing Matric is at 40% odd

despite very low standards We have 1,8 doctors per 100 000 people while the world is at over

5 doctors per 100 000 people.

We have just above the world average in number of nurses but I believe not all are deployed.

We may have delayed the downgrade but I do not think we have avoided it.

World Growth best in years. Coal and Gold cooking Platinum’s diesel engine stopping. SA business is doing alright but would get more confidence and real

positive action would ignite a barrage of investment. SA consumer is better off than many think and has been recovering

from debt burden. Growth should be better but VAT hike and confidence are

stumbling blocks. Despite VAT increase Inflation should average below 6%. Government needs to get more efficient quickly and work on it’s

ability to deliver fast. Downgrade could happen but not end of the world as our asset

base is strong. Nationalisation will hurt average person more than some

politicians think.

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