Damn, that‘s more than 10% of the additional grant for HIV/Aids this year, or about 0,1% of the Budget, or about R1,75 per South African – which would be cheap if we were celebrating the end of an era. And I am not talking about the Thabo Mbeki era. I am talking about an era of bad luck that seems to have permeated our lives since December 2007.
Let‘s write it all down: Sub-prime, the Eskom load-shedding debacle, the global credit crunch, an oil and fuel crisis, interest rate increases, rampant inflation, exchange rate fluctuations, recession, property market collapse, car market disasters, insolvencies, JSE collapse, rampant unemployment, etc.
If all were not difficult enough, we have had to deal with a changing of the guard at Luthuli House and the Union Buildings and all that goes with it. And it has become all to easy for so many of us to blame our lot on local politics and completely forget international events. We must now hope that Zuma is doing community service in the Union Buildings and Tuynhuys, because while we have been playing politics ever since Polokwane, we have not been concentrating on those who the new South Africa was supposed to be about – the 15 million who have almost nothing more than a meagre social welfare payment. It‘s time to get back to work.
However, that‘s all politics. What about personal finances? How are we going to recover that?
A recession is defined as two consecutive quarters with negative real growth – as in the last quarter of last year and the first quarter of this year. More importantly, it has not happened since 1993. Yes, we are facing the new South Africa‘s first recession.
And if that‘s not frightening, try this: If we have not had a recession since 1993, then those under the age of 17 – about 38% of the population of 49 million – have never experienced a recession. And if you add 10 years to the case study (as those under 10 during the last recession were too young to know about it), then more than 50% of the population have no experience of a recession.
Since the last recession, we have attracted some very expensive consumer habits: One-telephone families acquired five cellphones, a fax machine and an ADSL line; one-car families were replaced with the expectation of a car for all at 18; private school education became the rage; overseas travel became accessible to all, and perhaps one desktop computer is now a laptop and 3G card for all.
More frightening than all of that was the availability of credit prior to the National Credit Act coming into force. “If you can‘t afford it, buy a house and put it on the bond.” All that is gone now.
So today we are facing the reality that we cannot afford all the goodies we want and some will be paying off their excesses for many years to come. That‘s a depressing prospect and it is so easy to blame it on someone else.
We are probably getting towards the bottom of the recession. The common view is that by this time next year, the world will be on the comeback trail. But that‘s not going to put everyone back where they were. Financial security is only going to come from one‘s own efforts.
The danger is that we spend far too much time whinging. It‘s time to see if Zuma can deliver and, for those who can, to get on with doing it for themselves.
Lester is professor of taxation studies at Rhodes University.