Attorney Michael de Broglio on: South Africa, Law, Politics, Attorneys, Sport, Photography, Technology, Gadgets, Media, Crime, Road Accidents Fund,
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This is becoming such a big issue that my staff members are asking about it. Normally, questions of economics are the last thing that people generally talk about in an office, but with Greece heading towards, what appears to either be a default or leaving the Euro-zone and all of these concerns leading to the weakening of the Rand it seems that everybody is concerned at the moment. Personally, I don’t think that South Africa has got much to worry about, our debt as a percentage of GEP is closer to 40%, whereas most of these countries that are in trouble have a ratio in excess of 100%.
Economists and financial experts may well describe things differently, but to cut a long story short, in my opinion, most of the problems really get down to people being given far too many benefits, for far too long, relative to the taxes that they pay. In other words, they have not been paying enough tax to all the benefits they allegedly have. They also have uncompetitive economies where huge percentages of the population essentially work for the government, and don’t necessarily work a hard-working 8 hour day either. It is very hard for politicians to get elected by telling people the hard truth, and so I think it is going to take many years for them all to realise that in future they are going to get much less benefits, pay higher taxes, have to work harder and retire later – but that is the reality and it really does not matter for how long politicians sugar coat this for them or they vote out governments and vote in new governments, they are all going to face the same problem.
Whether hardcore austerity measures are called for, or printing more money, and trying to use the power of inflation to reduce some of those debts is the question that most governments need to tackle and there are certainly no easy solutions. It is tremendous pity that South Africa, as an emerging economy, has to suffer, certainly in terms of the strength of our Rand, simply because some countries that we have very little trading with and little in common with, such as Greece, Ireland, Portugal and Italy or the so-called PIGS are in a very poor state.
Posted by Michael de Broglio on Thursday 13-Oct-11
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Lorette said:
on Thursday 13-Oct-11 12:10 PM
Just this morning I read an article on the New York times. I quote Christine Lagarde, the managing director of the I.M.F: “The set of solutions and methods to address the situation is quite well known. The challenge pushing the leaders into the direction where they have to take much-needed, more action than what has already been done.”
Safia said:
on Thursday 13-Oct-11 12:06 PM
Similar to the utopian idea of socialism . When people can have money without working then they will not work. why should they ? My friend in Italy every 6 months gets her contract terminated so she can have 600euro a month for 6 months as unemployment benefit and in the meantime she carries on working and gets paid "in black ". This way she rips of the system and on top of that does not pay any tax for 6 months , then she goes back on contract and the story continues .....
Johannesburg based attorney specializing in personal injury matters including Road Accident Fund claims and medical negligence matters. My interests include golf, reading and the internet and the way it is constantly developing. I have a passion for life and a desire for less stress!
