Have changes to transfer duty rates impacted on home ownership?

Home ownership is a goal that most citizens strive for. However, the currently constrained economic environment means that most South Africans will have to wait to own a home. The government can play a role in facilitating this endeavor through a range of fiscal and monetary policy tools. For example, recent amendments to the rate of transfer duties on residential properties may impact on the ability to purchase/finance a home. The evidence, to date, is not particularly promising.

Taxes and democracy

While the annual admin of filing tax returns is deadly dull, the theory of taxation itself has some interesting side avenues. Its worth exploring these, given the current policy debate around radical economic transformation, and the appealing simplicity of the arguments that we should tax the rich more to transfer wealth to the poor. International and local experience suggests that it is unlikely to be that simple.

How much do state owned enterprises really cost us?

South Africa has opted to retain state control over a large number of companies which, in many other parts of the world, have been privatised. While state intervention can have an important role to play, for example in sectors where provision of services is important, but difficult to sustain on a commercial basis, there are often ways to achieve these objectives without resorting to state ownership of the organisation delivering the good or service. This obsession with state control has exacted a measurable cost to our economy.

Parenting and working

Having babies is a necessary part of sustaining economic growth. Without replacement labour force participants, its pretty obvious that economic systems would eventually grind to a halt. But the process of having a baby is incredibly costly – parents must lay out an enormous amount of time, effort and money to make a child into a productive member of the labour force (full disclosure: this is a topic close to my heart, as Truen junior is now just six months old).

Bread consumers should be compensated for bread cartel

In December 2006, the Competition Commission was informed of a potential bread cartel in the Western Cape. The offending firms were penalised by the Competition Tribunal for their behaviour. The penalties imposed by the Tribunal are collected by the National Treasury, so they function mainly to punish the firms, rather than to compensate market participants for the damage caused. However, an interesting development in this case has been that a private collective action by end consumers has also been initiated against the offending firms.

Liqour licensing in South Africa – improving credibility and compliance

The liquor industry occupies an interesting policy position, in the crossroads between industrial and health policy. While the domestic industry plays an important role in providing employment and export opportunities (particularly as regards the wine industry), which should be supported, the costs of alcohol abuse to health, human capital development and social stability are significant and need to be minimised.

Moving the moola: remittance flows from South Africa to the SADC region

South Africa is a hub of economic activity in the SADC region, and many migrants move to South Africa in search of a better opportunities and a better life for themselves and their families. The money and goods that these migrants send to their countries of origin are an important source of income for many households in those countries, but for undocumented migrants in particular, there are few formal options to get money home. As a result, migrants often rely on informal channels, such as sending money via taxi drivers, which take an unpredictable amount of time, are fairly expensive, and sometimes result in the loss of funds.

Taxpayer funding for toll roads

The public outcry over the proposed tolls for the Gauteng Freeway Improvement Project (GFIP) have substantially delayed Sanral’s toll implementation plan. They also pose a more fundamental question: if the user-pays principle is no longer going to be used to finance road infrastructure, then who is in fact going to pay? In this year’s budget, we got our first hint at an answer to this question, and not unexpectedly, its the taxpayer.

Waiting for the bus

Late last year I had a project which required a number of meetings at the National Treasury building in Vermeulen Street. As I live in Johannesburg, it made sense to take the Gautrain to these meetings – the Gautrain bus stop is just outside Treasury, so it should be pretty convenient. In practice, the commute was distinctly less than pleasant.

Fairness and toll roads

The Gauteng Freeway Improvement Project tolls are one of the first big tests of the policy of “user pays” for infrastructure which has been introduced by government. In theory, making the user pay for the infrastructure that they benefit from has the advantage of fairness, and helps to ease funding constraints that could otherwise prevent the construction of economically important infrastructure. However, in practice, both the fairness and economic sense of a given user pays project depends on the details of how it is implemented – and this is where problems begin to arise with the GFIP.