Monthly Archives: February 2016

Die Vine Intervention: High Road Classique and Director’s Reserve

Two classy reds from the Cape this week from an old favourite – High Road – introduced by an even older favourite Michael Olivier.

We taste the High Road Classique and Director’s Reserve from 2012 with leading analyst Chris Gilmour, Clientele’s Malcolm MacDonald and the ever-willing Jeremy Sampson.

Check out the podcast:


Die Vine Intervention: Porcupine Ridge Chenin Blanc and Chardonnay

 

Two excellent value, but superb quality, Cape whites have been chosen for this week’s podcast by the posh palate of Michael Olivier – the Chenin Blanc and the Chardonnay from Porcupine Ridge.

The Jo’burg tasting panel includes Grape Slave and Cape Wine Master Debi van Flymen, the grander brander Jeremy Sampson, economist Mike Schussler and Barclays’ Chris Gilmour.

Do check out the podcast:


Die Vine Intervention: Baleia Inge Chardonnay

Food and wine superstar Michael Olivier invites the tasting panel to sample a cheery but elegant Chardonnay – the 2014 Inge Chardonnay from Baleia.

John Fraser hosts the Johannesburg panel of Barclays’ Chris Gilmour, branding legend Jeremy Sampson and IT expert Malcolm MacDonald.

Check out the podcast:


Budget Review

ZA Confidential Budget February 24th

What to make of the 2016 budget?      Spending is being curbed and taxes are going up a bit, but no changes to the individual’s tax rate, to VAT and still no wealth tax.  Lots of talk of savings, of reviewing spending, or fighting corruption.   We have heard it all before.   But some areas appear encouraging, and notably a high-level review of what is happening with our debt-ridden state-owned enterprises.  There is to be a new Board at SAA, hopefully with a new chairman to replace Jacob Zuma’s lady friend incumbent.  While the people of ZA are a vital audience, it is the ratings agencies who are being targeted with talk of belt tightening and what Minister Pravin Gordon called “fiscal credibility”.   He, of course has to match the strictness of appeasing the ratings agencies with the political imperative that there are elections looming.    One move is very welcome – a lower duty on SA Brandy, to help this struggling sector. Less welcome is a nanny-state tax on sugary drinks.

Here are a few of the more interesting announcements.

–          GDP growth this year is forecast at just 0.9%, down from 1.3% last year

–          Net national debt is due to stabilize at 46.2% of GDP in 2017/18, and to decline after that

–          Investments of over R20 billion recently in the automotive sector

–          The Budget deficit will be reduced to 2.4% by 2018/18

–          Tax revenue will be R11.6bn short of the R1 081Bn earlier projected.

–          There is a series of measures to contain government costs

–          R18bn in tax increases for 2016/17, and a further R15bn a year for the two following years

–          An extra R16bn to higher education over the next three years, with an extra R11.5bn on social grant allocations over the same period

–          Comprehensive social security proposals will be released by mid-year

–          General Fuel Levy to be increased by 30c/litre

–          Personal income tax relief of R5.5bn

–          Medical tax credit allowances to increase

–          New tax on sugary drinks, and increases of 6% to 8.5% on alcohol and tobacco

–          New tyre levy to finance recycling, increases in the light bulb tax, the plastic bag levy and the motor vehicle emissions tax

–          Wealth taxes are under review

–          Changes to transfer duty, capital gains

–          New tax amnesty for 6 months from October for undisclosed offshore assets

–          Further streamlining of public enterprises, with a look at a possible merger of SAA and SA Express

–          Brandy reprieve:    Historical changes in duty structure and regulatory requirements have led to brandy being at a competitive disadvantage relative to other spirits. To level the playing field, government proposes that a 10 per cent lower excise duty, based on litres of absolute alcohol content, be applied to pot-stilled and vintage brandy, and phased in over the next two years.

–          The excise duty on sparkling wine has risen well above inflation in recent years, mainly due to the influence of high-priced imports. As a result, the difference between the excise duties on sparkling wine and still wine has increased substantially. It is proposed that the current difference between the excise duties on natural and sparkling wine be maintained by pegging the sparkling wine excise rate at 3.2 times that of natural unfortified wine.


ZA’s Massive Toll Rip-Off

OUTA sight

We hear a lot in ZA about waste and corruption. Maybe because there is so much?  But certainly one of the nastiest stenches at the moment is the Gauteng highway improvement scheme, for which road users are all being asked to pay through high tolls.

Those fine chaps at OUTA – recently renamed: Organisation Undoing Tax Abuse – have done some research into what it cost, and what it should have cost.

An international benchmarking exercise of 11 similar projects concluded that we in Gauteng have paid over the odds by 321%.   Had there been proper budgeting, the tolls would not be necessary.  OUTA is now investigating this and all other projects by the national roads agency SANRAL.   We can’t wait.

For a public body to be this reckless with our money – assuming that OUTA has got its sums right – is such a scandal that it makes the President’s use of public money to tart up his family home at Nkandla an object lesson in frugality and restraint.

Of course, if there was extravagance on that scale, we can only hope that those who dipped their hairy paws into the pot of public money are named and shamed.  Get outing, OUTA.

 

Tweet of the Day

Vladimir Putin (spoof) @DarthPutinKGB:  We will honour a ceasefire in Syria. Like we did in Ukraine.

 

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Is an Exodus of Business Giants a Threat to ZA?

Foreign Perspectives on ZA

Jacob Zuma and his colleagues have been trying hard recently to convince the world that ZA is open for business, is an attractive place in which to invest, and has a robust economy despite global shivers.  Tell that to Barclays and Anglo.

These two global giants have a significant presence in two of our most significant economic sectors – financial services and mining.   And yet both appear to be scaling back.

In the case of Barclays, a bank which has a local presence through its large stake in Absa, the scale of withdrawal should soon become clear.   Will it scale down its investment, or just pack up and leave?

If so, there will be all sorts of opportunities for black economic empowerment, offset by all the potential dangers of enrichment and corruption which we have seen too often in the BEE arena.

And while Barclays’ culling of its African operations may well be part of a perfectly sensible global realignment, the signal it will send within ZA can only be a negative one.

Our ministers cheer when there is an investment in the country, such as those by the auto giants who are richly rewarded through state incentives.   They may not be as public about fleeing bankers, but some damage will be done.

And what about Anglo?  Despite this company’s rich heritage in South Africa, it has its main listing in London these days, and its current Australian CEO replaced a North American.   While it is not talking about closing down its SA businesses, its plans to exit Iron Ore would mean a goodbye to Kumba, this country’s biggest miner of the mineral.  Similarly, a likely move out of coal would also impact its local profile.   And if is also exits platinum, there would not be a lot left in SA of one of this country’s former giants.

Of course, change happens all the time.  Anglo acquired its stake in Kumba when the old monolithic Iscor was broken up and flogged off.  And in diamonds there was also a flurry of restructuring around Anglo and De Beers.

But at a time when the government is laying out the red carpet for new investors, it must be a worry to see some big players in the local economy wiping their muddy boots on the same carpet as they head for the First Class lounge at ORT.

 

Service.  Please?

Fine food and wine are, of course, essential for an enjoyable dining experience.  And South Africa has both in abundance.

But a meal out is more than just about filling your face and straining your liver.   The ambiance and the service can transform a good meal out into a great one.

Which is why I was so under-impressed when I recently had lunch at the Indian restaurant in the Gold Reef City Casino, South of Jo’burg.

The welcome was warm, it was a quiet lunchtime, and I hadn’t eaten Indian food for a while.

Food and wine were ordered, with me selecting a bottle of Allesverloren Tinta Barocca – a wine I know and enjoy and thought might make a good match for the spicy food.

The waiter arrived at the table with a bottle, and I was able to stop him opening it when I realized it was the wrong wine.   Once again, I told him what I wanted and he went off to fetch it.

This time he not only arrived with the wrong wine – but it was the wrong colour, too.   I enjoy white wine but that was not what I had ordered.

Soon there was a huddle of people around the table, with the manager finally admitting that although the wine I wanted was listed, they were out of stock.

I hastily ordered an alternative, opting for something which was not nice at all, and was way overpriced.

The food was excellent, but because I was crying over unavailable wine, the meal was a disappointment.  Fortunately, I was using up some vouchers I was given at the relaunch of the Casino, so it wasn’t too expensive.  But had I been paying full price, I would have been really annoyed.

Service is a challenge, even in very good restaurants.   I recall the first time I went to Bistro Michel in Jo’burg, the waiter was clearly out of his depth, and the main courses were brought to the table before we had received our starters.

South African restaurants regularly feature in lists of the world’s best, and with the weak rand you can arguably eat better here for less than almost anywhere else.

But if you do not train your people properly, you are not offering the full dining experience.

Besides, take-away curry can taste just as good, without the need to pay for overpriced wine, beer or whatever you choose to glug down with it.

 

Tweets of the Day:

James Martin (@Pundamentalism):  They’re planning to close insect impersonation club. And then where will we bee?

Jewish Comedians (@JewishComedians):  Jerry Seinfeld: If a book about failures doesn’t sell, is it a success? | #Quotes

 

ZA Confidential is a subscription newsletter.   For subscription details, to invite us to events with edible food and drinkable wine, or any other communication, please contact:    zaconfidential@gmail.com    

Follow us on twitter:  @zaconfidential @dievinein @clasfras1    


Policy Uncertainty Index and OUTA

Policy Uncertainty Index

 

If there is one thing the markets hate, it’s uncertainty.  And if there is one thing the ZA government is good at, it is inflicting uncertainty on us.

So it is good that our chum Professor Raymond Parsons and his team at NW University have come up with a new Policy Uncertainty Index for ZA.

While the launch this week was a bit underwhelming, with too much focus on methodology and too little on the actual findings for Q4 2015, we can only hope that this becomes a valuable tool for those responsible for all the uncertainty, as well as those who are trying to make sense of what is happening in ZA.

The events late last year, when President Zuma changed his Finance Ministers more often than he changed his socks gave the markets a scare, hit the rand, and arguably led to the latest painful jump in interest rates.   While we appreciate this is good for savers, most of us are borrowers, and we are going to hurt.

As with most indicators, the trend can be very important, so while it is worrying that the index jumped from its base level in Q4, it will be interesting to see whether any stability is being achieved in the wake of the return of Pravin Gordhan to the Treasury when the next data are released.   The budget on the 24th should give a reasonable indication of whether he is going to open the floodgates of spending and borrowing, to appease disgruntled ANC supporters, or whether prudence will reign – which might help us avoid a further ratings downgrade to junk, or dog poo, or whatever is used for economies where the fan is turning a nasty brown colour.

It would be sad to think that spreading policy uncertainty is one of the few things our political leaders are good at.

OUTA

We have discussed in the past the importance of OUTA, which began as an anti-toll movement, but is evolving into a wider advocacy movement against unjust taxes and corruption.  ZA Confidential visited the OUTA offices this week, and was impressed by the clarity of thought and commitment of OUTA leader Wayne Duvenage.   A media briefing is being planned later this month to give some insight into the methodology and strategy of the movement, which seems to be attracting growing support and will hopefully be able to match this with sustainable funding.

 

Tweet of the Day:

Shit Jokes (@ShitJokes):  Last night I tried wife swapping for the first time, it’s brilliant!! I managed to get a new lawnmower for mine.

ZA Confidential is a subscription newsletter.   To join the elite, to invite us to events with edible food and drinkable wine, for sponsorship discussions or any other communication, please contact:    zaconfidential@gmail.com    

Follow us on twitter:  @zaconfidential @dievinein @clasfras1    

 


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