The Budget Speech is going to be held on 24 February and is eagerly awaited in many regards.  I have written about this topic before and how much government employees’ salaries are costing us as a country.  The bottom line is that government salaries are going to comprise 100% of the country’s entire GDP within about 10 to 12 years and while at some point the ANC will have to confront this problem, they are not going to choose to do so right now.  

Some well-known authors in somewhat negative books, have predicted that the ANC will never tackle the issue before the government will have to appeal to the IMF for a bailout and it is only at that time that they will then make a decision as whether to accept the advices that the IMF will surely give on firing large numbers of government employees, as well as cutting salaries that we will see any changes.  That might be an overly negative scenario, but it is the one painted by R W Johnson in his book “How long will South Africa survive?  The looming crisis”.  Even if you think that scenario is too negative, the one thing that you can accept is that while the ANC may not tackle this side of the problem – in other words, where the money is being spent and how it is being wasted – that they are certainly going to tackle the raising more money side of the equation.  The sensible way to do it would be to increase the VAT rate, but that will probably not fly politically.  It would be easy to justify and to point out that for example the UK has VAT at 20% and that is a far more modern first-world economy than ours, so it would not be hard to motivate increasing our VAT overnight to 17%.  I think however that what we are going to see is the same thing for a number of years – and that is slow, but continual increases in personal and company tax.

The Budget Speech is going to be on Wednesday, 24 February.  My main hope for this speech is that we see some cash injection for the Road Accident Fund.  There was of course a substantial 50c per litre increase last year, but with the Road Accident Fund hell-bent on settling as many claims as quickly as they can, seemingly to continue to run at a big deficit, it was not enough.  It must be borne in mind that for a number of years the Road Accident Fund settled 55,000 cases a year but suddenly in a time when less claims are being lodged against them than ever before they bounced that figure to 110,000 cases in a year and hence the problems we now face.  

What will assist the most is if, instead of just giving a per litre increase, and that needs to still be given, the government gives a lump sum. The Road Accident Fund is currently R10,1 billion in arrears on its payments and so one would need a lump sum like R3 or R4 billion just to have some impact.  If the levy is currently at R1,50 a litre one is going to need to see at least an inflationary increase, which would be another 10c or so per litre, but another 50c like last year would be ideal or at least, let us say 30c a litre together with a lump sum injection of R3 to R4 billion.  I don’t think we will get much of an increase, because to me, this has always seemed like a deliberate strategy to try and force in the new RABS Act by creating the shortfall that has been created and so, I don’t see government relieving it now.  There cannot be any other business where the CEO gets incentives, if by increasing the number of settlements he manages to manage the company into a cash flow crisis, but this is South Africa!  We’ve had government Ministers trying to explain that swimming pools are really there to put out fires, only for the President’s own advocate to contradict that in court and admit that the report of Thuli Madonsela was correct, so one must expect that nobody at the Road Accident Fund, including their Board, is going to bat an eye at the current mismanagement of the Fund.  You cannot describe actively going out, seeking new claimants, to block settle and mass settle as many cases as you can, when you do not have the funds to pay them as anything other than mismanagement and the only question is whether it serves a strategy or not?

I was quite surprised to hear from the owner of Wombles recently that they are moving to Bryanston.  They have been based in Parktown North for so many years that they are an institution in the area. Those who have been at lunch only would never understand exactly how popular Wombles is in the evening and they apparently turn away 30 to 50 bookings a night.  I am not sure that going to Bryanston is a good move for them but I have to say that it is by far my preferred steakhouse and I really had some superb meals at Wombles.  The management is also always excellent – from the second I walk through the door I am greeted by my name and they will come over and discuss, as they did on the most recent occasion, what the developments are with the RABS Bill.  That sort of awareness of your customers, what they do, etc together with good service and good food will always lead to keeping customers.  Client retention and word of mouth are far more effective, and cheaper, than advertising alone.

I was quite impressed with the additional steps Nedbank has taken in terms of security.  They now require all clients to have their fingerprints registered on their system and they also take a photograph of the client at the same time.  Your fingerprints are then checked with the Department of Home Affairs.  I must say that one has some concerns about banks working together with a government department in that way, but I would rather give up that privacy if it is going to ensure that it is harder for people to defraud one or steal money from one’s account.  There is really going to be much less excuses for a teller to pay out the wrong person, when they have your fingerprints on record as well as a photograph of you and I think the other banks will have to adopt this quite quickly because until they do all that will happen is that fraudsters and scammers will try and avoid Nedbank and just target clients of other banks instead.  

I read a very interesting article recently about open plan offices.  The theme of the article was more to do with end of year staff parties, but it detailed how around the world these parties are not what they once were and many companies are doing away with them. The article explained that the end of the year party started at a time when most people worked in big firms, in their own office, and there was very little interaction and that was the purpose of the end of year party or the monthly get together at a bar in the firm.  

It was to encourage interaction, people to see who they are working with and get to know each other.  The article said that around the world there is a trend towards open plan offices where a lot of people now work in the same office and generally know each other much better than they did when they worked in small closeted spaces.  They see each other every day, they greet each other, they meet at lunch, they share lift clubs on the way home, etc and there is not the same interest anymore in end of year parties as there used to be.  I wonder what your thoughts on that are – I only know the complications of arranging them. Whatever date you arrange, whether it is one or two years in advance, there are people who cannot go.  If you arrange a club there are certain people who will not go to a club or a bar, if you don’t arrange a club or a bar and you arrange a picnic at a restaurant, there are those who will find that too boring and will not go to that.  There are those who want to take their partners, there are those who want their partners to be paid for and there are those who are possibly too embarrassed to take their partners and don’t want their partners to attend.  That was an easier one to settle because research quickly indicated that most firms do not allow partners and where they do, they pay their own way.  I find when you ask somebody to pay their own way or even contribute towards the function that is the best way to get them to lose interest in it!  I suppose it is inevitable in a country where we have 13 official languages that there is so much diversity and so many different people that it would be very hard to genuinely find one activity that everybody can be moderately happy with to do.  I think quite frankly, even if the company pays for it, if you were to for example arrange it for a Saturday and the staff members are now going to the party out of their own free time, you will find that only a few would turn up – probably your best staff actually.  That would probably be the best way of testing whether there is actually an interest, because if you are not interested enough to turn up in your own free time for a function to get to know fellow staff “better”, then one can hardly say it is something that is important to one.  If I think back, probably the most successful staff function I ever had, apart from some staff leaving early and taking some of the food and drinks with them, was a function that we had at the horseracing and when I was begged by everybody to repeat it, I did.  Of course, a number of those invited, including those who said it was such a good idea and would love to come, immediately came back with the “I really did want to come but unfortunately I cannot this time, but next time for sure.” 

I often send my staff memos with advice that does not actually relate to anything to do with work, and in a recent one, I gave them advice on what to do with bonus money paid at the end of the year. So many people in this day and age go out and treat themselves straightaway, or use the money to upgrade some aspect of their life instead of focusing on the important things. The important things are settling debt and providing for one’s retirement, not to mention the ups and downs of life. 

The comparison that I gave my staff is that bookmakers find it a profitable business to take bets on sports because most sports, and certainly the most popular ones are popular because things don’t always go as expected – and that is exactly like life. I have written about golf in that way previously, because golf is very much like life. You can hit a fantastic shot but it bounces on something hard and takes a tremendously bad bounce and you are in terrible trouble. Sometimes a whole combination of things lead to the team that cannot lose, playing against somebody who has never beaten them before, losing and one would think of the Springboks and Japan in that regard. 

At other times, it really gets down to the bounce of the ball, and a rugby ball is no doubt shaped deliberately as it is, to bring the element of chance into a game. The reality of life is that it is not that different to many of the sports events we watch. Sometimes it goes as expected but on many occasions it does not and during the course of the event, or one’s life, there are ups and downs and good luck and bad luck. You have to ride the good luck, you have to capitalise on it, and you also have to prepare for the bad luck. You have to put money aside and keep money in a rainy day fund, or whatever you call it, so that if somebody does go wrong you don’t have to explain to everybody else how you have been tremendously unlucky and something completely unexpected has happened and that is why you never planned for it or had any money set aside. The point is you should expect the unexpected, because it does always happen to one, and unfortunately on more than a few occasions during your lifetime. The unexpected is not unexpected. 

With the whole issue of the ISIS terrorists recruiting people from around the world on the Internet, the issue of freedom of speech and privacy is once again going to raise its head. Obviously, there is a vast difference between speech that would encourage people to commit violent acts, which is illegal in most, if not all, countries in the world, and general freedom of speech. There is also however the question, and perhaps Ed Snowden, who did not do the world as many favours as his fans seem to think, when it comes to privacy. The fact of the matter is that ISIS or ISIL or IS, however one prefers to refer to them, are using Facebook and Twitter to communicate their messages and more importantly to recruit new members. At some point these companies, which are all based in America, need to start showing some allegiance to the citizens of the world, as well as their host country, and start, in my opinion, notifying the authorities the second their software picks up any reference to ISIS, ISIL, the leader of ISIS, Abu Bakr al-Baghdadi, and whatever other search terms are relevant. In many cases postings are made to Facebook and Twitter just before an attack commences and it should not be the job of authorities to obtain this information after people have been murdered. I am sure there are many who will scream that the second you start giving governments this power, that many of them, and the National Party in South Africa would be the best example, will start abusing that power. On the other hand, are these companies going to sit back and allow terrorists to use their products to kill people? The internet companies should seize the initiative and warn Government authorities immediately of any positive references to these terrorist organizations using their products to spread their message of hatred and death.

In recent years there has been a lot of evidence that much of what we rely on, to prosecute people, does not really hold up to scientific scrutiny. Apparently, not even fingerprints and certain kinds of DNA are as certain as we once believed, according to scientists. They have however said that nothing is less certain than bite marks and a recent Texas Commission has looked into bite marks and investigated the situation. Their full report is only expected to be released in February 2016, but it has already allowed some people to be set free from jail, after the dental experts in most cases have accepted that the so-called experts were wrong. 

In the cases involved, the prisoners were convicted solely on the basis ultimately of bite marks, because none of the other evidence was good enough. The experts have subsequently said that because of the malleability of human skin, the same teeth actually leave different marking patterns on somebody with each bite – there is nothing consistent about somebody’s bite on human skin. Leading forensic dentists, when given photographs of skin wounds, apparently could not even agree, in many cases, as to whether or not marks were even caused by a bite. It makes one always appreciate that what we regard today as certain and as science is so often overturned later. 

When I was a young candidate attorney I was sent by my principal to a man who was often quoted in the media as an expert on forensic science in South Africa, in particular with regard to criminal matters. His job was to say whether a tape recording of a call was authentic and I must say I thought the process was laughably amateur. He put the tape into a normal tape recorder and listened to it and simply because there were not any obviously edited parts to it, or pauses, he said that in his opinion the recording was genuine. There was no actual expert analysis of the tape – no rendering it through computer systems and detailed analysis – it was just his “trained expert” ear. I am sure that the tape recording was genuine, but I don’t think his process was scientific and every time I read his name in the newspaper, giving an opinion on some or other topic, in criminal matters, I wonder if the issue has been as glossily brushed over, as the tape recording of the phone call, I saw him handle.