I read a recent article in the Financial Mail indicating that between 2005 and 2012 money paid to state employees went up by 76%.  The total bill for government employees has gone from 31,7% of government revenue in 2008 to 42,2% by 2012. The social grants we give out have gone from 12,6% to 14,2% which means, just between grants and what government employees are paid, that takes up 56,4% of all taxes that are raised.  In other words, everything else – education, public health, police, the defence force, etc – are all paid from 43,6%.  At the current rate, according to research done by Professor Rousseau, head of the Wits University School of Economic and Business Sciences, by the year 2026 – which is only 12 years away – social grants and state jobs will account for all government revenue.  They estimated if that was increased by 1%, company tax by 3%, fuel by 10% and personal tax for example increased to 50% at the top rate, that that would only buy us another two or three years.  It is no wonder that many years ago Trevor Manuel warned that the grant system was not sustainable, and that Pravin Gordhan said that we cannot afford to continually give above inflation wage increases to civil servants.  At the moment, nothing short of some amazing windfall, from the discovery of some sort of rare mineral and the taxes we are going to earn on it, is going to save us from what is a disastrous economic future between strikes from government employees for more wages and rapidly increasing taxes for everyone else.

As anybody who sits and taps away on their phone during a long boring meeting will know, having access to Wi-Fi and cellular data can make anything more pleasurable, and so it is with plane trips as well.  It is quite common now in America for you to be able to access, while flying, live television channels so you can keep following the sports event that you are watching live while travelling, and at the same time have Wi-Fi access on your phone or laptop and be able to deal with your e-mails there and then.  In fact, the blog that I wrote predicting that the Springboks would end the unbeaten run of the All Blacks, which indeed they did, was written and posted to my blog at 35,000 ft above America and it really was somewhat surreal for me, even if Americans on most domestic flights are used to that.  The planes have not been adapted yet so that you can do that on international flights, but that is surely only a matter of time and it would be particularly exciting especially for the longer flights.  Our technological world gets faster, smarter and more connected every year, and there is no reason why, when one is on a lengthy 12 hour flight, one should not be able to take advantage and attempt to reply to your e-mails while still conducting business.  

It is surprising that we do not have any of these cars in South Africa yet.  Obviously, the first thing we would need is the infrastructure and that is regular places for these cars to be charged.  In America, and while it is still the exception, you will find charging points in parking lots of grocery stores, as the photograph alongside indicates.  The car is being charged while the person does their shopping and at the moment it is a service that they actually provide for free.  It is important, when we consider our environment, that cars do become at least more fuel efficient and obviously electric cars will certainly play their role in that regard.  I just thought that it is not something that one would see in South Africa and the photo is certainly of interest!

The petrol price is going to be coming down, and not because of Rand strength.  this time it is the international price of fuel which has come down substantially and if in fact the Rand was strong, we would be seeing a bigger reduction.  In March 2013 the basic fuel price for 95 unleaded was R7,52 and at the moment it is R7,12.  As a result at the moment we are looking at about a 22c decrease from the current price of R13,61 for unleaded 95 petrol.  If the Rand was where it was a year ago we would probably be paying considerably less but we should not complain about a reduction in the rate and although it will not suit the oil producers, such as Russia and the Arab States, it appears that the fuel price will be coming down for still a few months more.  The link where you can find the fuel prices has changed and it can now be found at www.cefgroup.co.za/petrol-price/.

The iPhone 6 allegedly arrives in South Africa today.  I say “allegedly”, because I have witnessed the queues in America and I am aware of just how limited the stock is.  Every Apple store in America has a queue of about 200 to 300 people outside it every day, and the first 30 or 40 in the queue managed to get the new iPhone and the rest are told to come back the next day.  I have no doubt that the situation is going to be similar for South Africa – in other words, while it is technically true that the iPhone 6 is here, it will be in such limited numbers that it is going to be extremely hard to lay one’s hands on it for the next two or three months.  The fact of the matter is that Apple does not have enough products to supply their home country at the moment with, let alone the other 30 or 40 countries that are going to be supplying the iPhone 6 from today!  Of course, it may also be a marketing stunt to drive up demand by making it available, even though they probably don’t have much more than a few phones per store in South Africa at the moment.  

I was quite impressed with some of the developments that are happening overseas in terms of major musical festivals and how one pays.  They are going much more towards a cashless society and what they are doing now is that, like most concerts, you get your wrist band, but overseas they are beginning to use chip-enabled wrist bands that basically not only provide you access to the concert, but you activate it with your credit card so that, by presenting your wrist band, you can pay for anything – whether it is merchandise that the various pop stars are selling, food, drinks, etc and you don’t have to pull out cash.  If you lose your wrist band, it is not the end of the world because it is still activated by you with a pin code, so the person who takes your wrist band, which is not an easy thing to steal off your wrist in the first place, is not going to be able to do anything with it without your pin code.  Of course, the benefits include not only that you don’t have to carry cash and run the risk of having it stolen or lost, but more importantly it speeds up the payment process and allows the vendors to serve more people more quickly – something that is a common complaint at concerts in South Africa.

The Road Accident Fund Benefit Scheme, as we always refer to it as RABS, has already been approved in principle by the Cabinet.  It may be a matter of months, or hopefully longer before it becomes law.  In their efforts to get attorneys out of the system, the Road Accident Fund has basically devised a scheme to make sure that attorneys will not in any way become involved.  Payments are made directly to clients, so that would disincentivise any attorney from financing a case where there is no guarantee of getting paid, but in addition to that and more importantly so as to ensure that attorneys are not needed, they are going to move the whole scheme to a no fault basis. That means when you are to blame for an accident you will have a claim, just as you will have a claim when you are not to blame for the accident.  That in theory gets rid of attorneys but of course to introduce all of those extra cases and still pay them, you have to reduce the benefits!  

Put another way, because the guilty person will now have a claim, the innocent person will have a claim for far less than before.  One should be suspicious of any legislation that has the word “benefit” in it because normally the word is only used when in fact there are no benefits at all and that is pretty much the case here – there will be so few benefits applicable under the new Scheme that I doubt the majority of people will even go through the process, especially without the assistance of an attorney, of lodging a claim.  The loss of income for example is capped at about R50 000,00 compared to the R220 000,00 a year now, and there will be no money for pain and suffering no matter how serious the case is, there will be no lump sums if indeed you do qualify for a claim, you will receive your payments as a monthly amount.  The only type of person who would be happy with this is the drunk who drives through a red robot, crashes into another car, paralysing them and injuring himself.  In the past he would not have a claim, but now for everyone else’s benefit it has been either removed or drastically reduced, he or she will have a claim.  I have put forward a resolution to be heard at this year’s Law Society Annual General Meeting, motivating that the attorneys’ profession must spend a lot of money on an advertising campaign informing the public of what is about to happen to the contribution they make to the Road Accident Fund every time they purchase petrol or diesel.  I am certainly hoping that the members of the Law Society will approve the resolution and that the Law Society will tackle this issue.

The Oscar judgment of 5 years was no surprise to me.  From day one I initially predicted 5 to 7 years and with the evidence (and his testimony) tended more towards the 7 years.  What was a surprise is how many people actually bet that he would not be going to jail.  A sentence like that was never going to be possible after he killed his girlfriend in the way that he did.  It has also amazed me, during this trial, that the sympathy for Oscar Pistorius has largely been from women and once again it is largely women who felt time at his Uncle’s house under correctional services would be appropriate.  Men typically have had little sympathy for him and in many ways that is a reversal of what one would expect.  Why is it that so many pretty young ladies have rushed to his defence?

In some ways his defence have done a great job.  He killed his girlfriend and with time off for good behaviour, and a first offence, he might be out of jail in as little as 2 years time abd his lawyers are saying he will be out after 10 months only.  He could easily have got 7 to 10 years and 5 years, is in my impression the lowest sentence he could have received.

An awful amount of money was spent on getting to a decision one could have reached within a week and I hope Oscar saves his last remaining money and does not appeal.  He won’t succeed with an appeal, he has no chance and it would be throwing more money away.

I wrote about Kapsch TrafficCom previously – it is the company that runs e-toll roads in South Africa.  At that time its share price was €38 (at one point it touched €45).  For those of you who did not believe that e-tolls were going to take off in South Africa you had a wonderful betting opportunity – to bet that this company’s share price would go down, and you would have made a fortune.  Its share price seems to be in a terminal slide at the moment and down to €18.83 and that seems to indicate that investors do not believe that the e-toll system in South Africa is going to survive.  That does place companies such as ours, where we followed the law, in somewhat of an unfair position – ultimately we would have paid tolls that three quarters of the people have not, and are probably not going to.  On the other hand, one does not want, as a law firm, to be breaking the law.  The bottom line though is that it certainly appears from the share price of Kapsch TrafficCom that the e-toll system is going to be done away with, one way or another eventually.

Its sentencing time now in what has really been a long winded trial.  From day one I said Oscar Pistorius would be found guilty of culpable homicide and get 5 to 7 years in jail.  After a long drawn out trial I haven't changed my mind.  The State have asked for 10 years in jail and the Defence have argued that correctional supervision and community service will be enough punishment.

We have have all heard and read the arguments and can make an educated guess as to the verdict - what do you think it will be?

I read with interest recently that Uber has started in South Africa.  Its basically a taxi service but not the regular registered taxi’s one is used to.  I have used the service in America and essentially you download an application to your phone, register with your name, cell phone number and credit card number and then using the GPS facility within your phone, which works out where you are, to indicate which address you would like to be taken to and Uber will send a driver along for you.  

You sometimes have a choice of cars with a fancy black car costing you more than the uberX car.  Uber is having problems in many countries around the world who feel that they are competing with taxis, somewhat unfairly, but in my experience, a taxi driver is still cheaper. During my test in America I went to a place with a taxi which cost me $11 and when I came back from that same place to my starting point it cost me $42 with Uber which is four times as much.  In fairness to Uber they did send me a warning that it was peak time due to a music festival taking place at the same time, and I was not in the downtown area, and I had to enter onto the app on my phone that I agreed that I would be paying 2,75 times the normal rate so as to procure a driver.  It is huge in cities like New York, where business people are using them more and more in competition with taxis and of course it is one more option if you are in an area without a taxi.  

I think we will also find some people in South Africa who are going to decide that using their car and register as an Uber driver might just suit them, because they can decide when they are going to work, for example on a weekend only, but it is something that people will have to be fairly careful about and choose a safe location to work in.  Lastly, the drivers are rated, so you get a picture of the driver who is on the way to you, you can track on GPS where they are and how long they are going to take to get to you, you can see their overall rating such as 4,9 out of 5 and they in turn give you a rating!  You don’t pay when you get out of the car or anything like that, because that is all arranged via the app and your credit card is charged automatically as the journey ends.

I had the pleasure, or perhaps the torture, of seeing the new iPhone 6 and iPhone Plus and trying them out.  I say torture, because they are not available for sale as yet unlocked, which means you cannot buy them in another country and then bring them back to South Africa, because at the moment they are only sold on contracts overseas.  The iPhone Plus is already out of stock in America and still, a few weeks after it being sold out, there are long queues in any Apple store to buy the iPhone 6.  Some upgrades are marginally better than others, or look marginally better, but this is one of those “eat your heart out and die of jealousy” types of upgrades.  The new iPhone really is a creature of beauty, it feels better, it looks better and that is not just the bigger screen – the whole look of the phone is slimmer and just makes the current model, sadly, look terribly outdated.  

The iPhone Plus is a lot bigger, and probably better for people like me, who don’t need to pull out my phone in a nightclub and take somebody’s number and are struggling with small font.  Obviously there are so many middle-aged people who want the larger phone that it has sold out.  I understand they will be arriving in South Africa in December but once again that is probably on a contract basis initially and it may be some time before one can buy an unlocked version.  I am planning to get the iPhone Plus, but my wife preferred the iPhone 6 itself, saying that the Plus was a little bit too big, but either way, they are Apple’s fastest selling product in history, and when you see it, you will understand why – it is by far the most impressive iPhone ever.  I must say in terms of the applications I really enjoyed the time lapse video which creates a very interesting effect and of course the images are sharper, and all the usual improvements that have been made, but to me the big story here is that the phone itself is without doubt the best iPhone ever made.

I hope the heading caught you attention, because it certainly caught mine when I read all about a new product that finance companies are using in America. Essentially, more than 2 million cars in America have been sold on credit sale agreements subject to this device being installed in a car – and you can guess exactly what happens when people do not pay their instalments anymore!  I would not be surprised if it comes to South Africa soon, because most of the businesses that we see, whether it is from night clubs through to hotels, don’t invent something new but they copy something that has already been done overseas.  This will revolutionise car financing in South Africa which has a history of a lot of people not making payments.  

The device essentially allows the finance company not only to track where your car is via GPS, but should you fail to make a payment, they simply click a button on their computer and your car will not start and is disabled until you make your next monthly instalment!  I must say I love the idea and I hope they can spread it to as many other businesses as possible, but it will be interesting if we get that in South Africa because on the one hand we have such generous rights for tenants that it is very difficult for a landlord to toss them out when they fail to pay their rent and so one wonders if we are going to allow finance companies to stop somebody using their car when they have not paid. They should be allowed to do it, but nor should tenants be allowed to continue to occupy somebody’s assets when they have not paid and unfortunately with the legal process the way it is, they do get to abuse landlords for many months.  There have been all sorts of stories in the American media about people whose child was sick and who urgently had to rush off to the hospital, but could not do so because of the car being locked and I guess that is sad to hear, but people need to learn to actually meet their commitments, and not to borrow money and then simply renege on the deal. The bottom line is if you have not paid for something you should not expect to use it and however tragic the results are after that, it really would be a case of it is your fault, and it should be your problem!

The Rand has weakened quite considerably recently, which should have some impact on the petrol price.  This time it is not so much to do with internal factors, such as the resignation of the Reserve Bank Governor, Gill Marcus.  

The Dollar has improved in strength against basically every currency in the world and even the Pound and the Euro have shown weakness against the Dollar.  The US economy is expanding again, it is growing and one of the advantages of a strong Dollar, to counteract our petrol prices, is when the Dollar does improve, things that are sold in Dollars generally get cheaper and luckily oil is one of those things.  The American economy has improved so much faster than the economies of the other countries in the world that they are now beginning to think about increasing their interest rates, and that confidence is exactly what has made the Dollar the most popular currency in the world at the moment, which is why everyone is buying it and selling the other currencies.  Obviously, it also hurts American companies as well – for example, Ford Motors make a lot of money from cars that they sell overseas and as a result of the strengthening Dollar they have just said that their profits are expected to decline from US$7 billion to US$6 billion in their next reporting period.  That in turn affects the American stock market, so hopefully we will see some interest in American in not having too strong a Dollar because it is sad to see the Rand getting walloped like it is at the moment – but we must bear in mind that it is not just us – it is countries all around the world whose currencies are weakening against the Dollar now.

Talent is Overrated is the title of a book on a similar topic, but that is not the subject of my blog today.  I just find it incredible how people always assume certain people either have talent or luck, but choose to ignore the fact that most people achieve what they do simply through hard work.  This has brought home to me every time I read an article involving a sport star.  If you read about golfers they will almost always tell you about 20% of what got them where they are is talent and the rest was pure hard work.  I read a similar article involving a swimmer recently who said that in the big races, and I like you thought it was all just about pure athletic ability and talent, that 80% of the result gets down to mental attitude and who wants to win.  

The best place to see this is in the office where you work because there will always be those that are recognised by the company as being the stars and those who are in the middle of the pack running along and working just fine, but who never become stars. Almost always the only difference between them is not education or talent, but some people just work harder than others. Some people put in more time, more effort and want to get ahead whereas others are just “there”.  I think that is a tragedy, because I don’t understand why anybody, who only gets one chance at living in this world, would choose to just be in the middle of the road, jogging along and not achieving anything instead of putting their foot down and trying to see how much they can do and how far they can go.  If you only get one chance, you really should take it.

I think our current rugby team is showing all the signs of a team that can win the World Cup.  They lost two narrow games overseas with some bad luck and perhaps not taking the penalty kicks they should have against Australia.

The All Blacks have not been beaten in forever, but if there is one team that can beat them its the Springboks and its the Springboks at home.  I think there is every chance that tomorrow we can upset the No.1 team in the world.  Lets hope for a great sporting weekend and to finally see someone topple the All Blacks.  The bookies price up SA at 12/10 and New Zealand at 9/10 but I am with the 2nd favourites on this one and have put my money on them!

Ebola continues to spread at a steady climb, and some experts are now saying that by 2 November there will be 20,000 infections.  This is according to an article in the New England Journal of Medicine and it would be interesting, on 2 November, to see what the figure is at that time. The World Health Organisation initially predicted that the virus could strike 20,000 people within 9 months, which is obviously a much longer timeframe and of course some say it will be millions by then.  So far the disease has really been limited, by and large to Liberia, Guinea and Sierra Leone.  There is every prospect that it can become a permanent part of life in those countries, with it being somewhat under control, and not spreading wildly, but nevertheless killing people on a regular basis.  Unfortunately, that is one of the more positive predictions from the experts – the disaster scenarios are much more scary.    

Over the years, whenever I wrote about Steyn City, I got all sorts of interesting replies on my blog from people who were clearly not regular readers of the blog and got to it via Google searches.  I was happy to see that Steyn City made the cover of the Financial Mail of 18 September, because it is really going to be a completely different development to anything we have seen before in South Africa.  The residential golf estate named after Douw Steyn of Auto & General and the golf course was finished three years ago, but it is still not open to the public because they want it to be so perfect when they do open it, which will apparently be in October.

Most people who know about Steyn City know about the house of Douw Steyn which is a 3000 metre palace which cost R250 million to build making it the most expensive house ever built in South Africa.  When Steyn City opens for sales next year it is certainly going to put pressure on Dainfern which is next door and possibly as well Blair Atholl which is further away.  It is going to have 10 000 residential properties, a retirement village, 80 000 square metres of offices as well as two primary schools, two high schools and not to mention the golf course!  

The developers have already spent R900 million just to upgrade William Nicol Drive.  From one lane in each direction as it used to be, from just before the Dainfern entrance,  William Nicol will now be three lanes in each direction and those of you who travel in this area would have seen the work that is going on in that regard – and it is a private developer who is paying for it and not the government!   There is going to be a centre with shops, restaurants and of course the offices, so it will really be the kind of place where you can live, work and simply never leave the estate and although it will take many decades to be finalised, I think it is going to be quite something to see, even if one does not want to buy or does not have the funds, when it goes on sale early next year and the estate is finally open for prospective buyers to go and see because at the moment only developers, builders and the various contractors can go into the estate.