XKPMG Tip­ping Point: The Tide Is Ris­ing/Turn­ing

THISDAY - - BUSINESS WORLD - By Basho­run J.K. Ran­dle

In the White House, the code name for Pres­i­dent Don­ald Trump is “Ever Ready”(in the old days a lead­ing dry cell bat­tery was named “Ever Ready”) be­cause he is al­ways ready to do com­bat with all and sundry – crit­ics (es­pe­cially the press); po­lit­i­cal ad­ver­saries, busi­ness ri­vals; and even his own friends not ex­clud­ing mem­bers of his cab­i­net e.g. Rex Tiller­son, the Sec­re­tary of State; Jef­fer­son Ses­sions, the At­tor­ney-Gen­eral plus a long list of for­eign foes rang­ing from Kim Jong-Un the Supreme Leader of North Korea and Gianni In­fantino, the Pres­i­dent of FIFA i.e. Fédéra­tion In­ter­na­tionale de Foot­ball As­so­ci­a­tion.

One of the videos cur­rently cir­cu­lat­ing on the in­ter­net por­trays Trump vig­or­ously lam­bast­ing the Pres­i­dent of FIFA fol­low­ing the elim­i­na­tion of the Amer­i­can team from Rus­sia 2018 af­ter los­ing to a lowly rated team from Trinidad and Tobago.

“I blame FIFA, es­pe­cially the Pres­i­dent. The United States of Amer­ica was forced to play against two coun­tries at the same time – one from Trinidad and the other from Tobago. It is most un­fair.”

Any­way, Don­ald Trump re­mains a fas­ci­nat­ing char­ac­ter whether you hate him or loathe him. Even be­fore break­fast, he had fired off sev­eral Tweet salvos against two Sen­a­tors and a Con­gress­woman.

Against Sen­a­tor Bob Corker, Repub­li­can Ju­nior Sen­a­tor from Ten­nessee:

“Bob Corker, who helped Pres­i­dent O give us the bad Iran Deal & couldn’t get elected dog catcher in Ten­nessee, is now fight­ing Tax Cuts....”

“Corker dropped out of the race in Ten­nessee when I re­fused to en­dorse him, and now is only neg­a­tive on any­thing Trump. Look at his record.”

Corker Fired Back Say­ing: “Same un­truths from an ut­terly un­truth­ful pres­i­dent. #AlertTheDay­careStaff”

Trump had some fi­nal remarks: “Isn’t it sad that light­weight Sen­a­tor Bob Corker, who couldn’t get re-elected in the Great State of Ten­nessee, will now fight Tax Cuts plus!”

He also took on Repub­li­can Sen­a­tor Jeff Flake from Ari­zona, who on the floor of the Se­nate, an­nounced that he would not run again for his seat, as a form of protest against the Pres­i­dent’s “reck­less, out­ra­geous and undig­ni­fied” be­hav­iour. He crit­i­cised the Trump Ad­min­is­tra­tion in his re­tire­ment speech say­ing:

“…We have again for­got­ten who we are sup­posed to be.

There is a sick­ness in our sys­tem — and it is con­ta­gious.

How many more dis­grace­ful pub­lic feuds with Gold Star fam­i­lies can we wit­ness in si­lence be­fore we our­selves are dis­graced? How many more times will we see moral am­bi­gu­ity in the face of shock­ing big­otry and shrug it off?

How many more child­ish in­sults do we need to see hurled at a hos­tile for­eign power be­fore we ac­knowl­edge the sense­less dan­ger of it? How much more dam­age to our democ­racy and to the in­sti­tu­tions of Amer­i­can lib­erty do we need to wit­ness in si­lence be­fore we count our­selves as com­plicit in that dam­age?

Nine months of this ad­min­is­tra­tion is enough for us to stop pre­tend­ing that this is some­how nor­mal, and that we are on the verge of some sort of pivot to gov­ern­ing, to sta­bil­ity. Nine months is more than enough for us to say, loudly and clearly: Enough.

The out­come of this is in our hands. We can no longer re­main silent, merely ob­serv­ing this train wreck, pas­sively, as if wait­ing for some­one else to do some­thing. The longer we wait, the greater the dam­age, the harsher the judg­ment of his­tory.

We must never re­gard as “nor­mal” the reg­u­lar and ca­sual un­der­min­ing of our demo­cratic norms and ideals. We must never meekly ac­cept the daily sun­der­ing of our coun­try.

I have been so wor­ried about the state of our dis­union that I re­cently wrote a book called “Con­science of a Con­ser­va­tive: A Re­jec­tion of De­struc­tive Pol­i­tics and a Re­turn to Prin­ci­ple.” I meant for the book to be a de­fense of prin­ci­ple at a time when prin­ci­ple is in a state of col­lapse. In it, I traced the trans­for­ma­tion of my party from a party of ideas to a party in thrall to a charis­matic fig­ure ped­dling empty pop­ulist slo­gans. I tried to make the case for the some­times ex­cru­ci­at­ing work of ar­gu­ing and com­pro­mise.

This was part of the rea­son I wanted to go to the Se­nate — be­cause its in­sti­tu­tional stric­tures re­quire you to cross the aisle and do what is best for the coun­try. Be­cause what is best for the coun­try is for nei­ther party’s base to fully get what it wants but rather for the fac­tions that make up our par­ties to be com­pelled to talk un­til we have a pol­icy so­lu­tion to our prob­lems. To lis­ten to the rhetoric of the ex­tremes of both par­ties, one could be for­given for be­liev­ing that we are each other’s ene­mies; that we are at war with our­selves.

But more is now re­quired of us than to put down our thoughts in writ­ing. As our po­lit­i­cal cul­ture seems ev­ery day to plumb new depths of in­de­cency, we must stand up and speak out. Es­pe­cially those of us who hold elec­tive of­fice.

To that end, and to re­move all con­sid­er­a­tions of what is nor­mally considered to be safe po­lit­i­cally, I have de­cided that my time in the Se­nate will end when my term ends in early Jan­uary 2019. For the next 14 months, re­lieved of the stric­tures of pol­i­tics, I will be guided only by the dic­tates of con­science. It’s time we all say: Enough.”

Trump made a quick re­but­tal to these state­ments: “The rea­son Flake and Corker dropped out of the Se­nate race is very sim­ple, they had zero chance of be­ing elected. Now act so hurt & wounded!”

“The meet­ing with Repub­li­can Sen­a­tors yes­ter­day, out­side of Flake and Corker, was a love fest with stand­ing ova­tions and great ideas for USA!”

“Jeff Flake, with an 18% ap­proval rat­ing in Ari­zona, said “a lot of my col­leagues have spo­ken out.” Re­ally, they just gave me a stand­ing O!”

Against Frederica Wil­son, a Demo­cratic con­gress­woman, af­ter she crit­i­cized Pres­i­dent Don­ald Trump over his remarks to the widow of a soldier killed in Niger, Trump had this to say as a re­join­der:

“Demo­crat Con­gress­woman to­tally fab­ri­cated what I said to the wife of a soldier who died in ac­tion (and I have proof). Sad!”

“I hope the Fake News Me­dia keeps talk­ing about Wacky Con­gress­woman Wil­son in that she, as a rep­re­sen­ta­tive, is killing the Demo­crat Party!”

“Wacky Con­gress­woman Wil­son is the gift that keeps on giv­ing for the Repub­li­can Party, a dis­as­ter for Dems. You watch her in ac­tion & vote R!”

He was re­mark­ably cool and com­posed as he walked into the room full of XKPMG part­ners who are still await­ing their gra­tu­ity and pen­sion - to dis­cuss his new tax pro­pos­als/ re­form. We were all set for the val­i­da­tion tests; the sen­si­tiv­ity tests; the sce­nario planning; com­puter mod­el­ling; fi­nan­cial mod­el­ling; risk anal­y­sis; stress test etc. Don­ald Trump was as un­pre­dictable as ever. He launched into a ju­bi­lant self-rec­om­men­da­tion and ap­proval/ad­ver­tise­ment.

“We are win­ning on all fronts. We have done more in the last nine months than all pre­vi­ous ad­min­is­tra­tions. The jobs are com­ing back. The New York Stock Ex­change Dow Jones In­dex hit an un­prece­dented 23,000. Even ISIS is on the run. We have re­gained con­trol of Raqqa.

As for tax re­form, it is a war and we are go­ing to win it.”

We were then treated to a gi­ant screen video of Mr. Nick Parker Pres­i­dent of The In­sti­tute of Char­tered Ac­coun­tants in Eng­land and Wales (ICEAW). His de­po­si­tion was on taxes.

“With ut­most sense of re­spon­si­bil­ity, our In­sti­tute is com­pelled to warn against the im­mi­nent crack­down by Her Majesty’s Rev­enue & Cus­toms [HMRC] on off-shore trusts. It will hit work­ers in­clud­ing clean­ers, teach­ers and nurses who have been mis­led into us­ing these schemes which are tech­ni­cally deemed as “dis­guised re­mu­ner­a­tion” by HMRC whereby the em­ployer pays the con­tri­bu­tion to an off­shore trust, in­stead of pay­ing re­mu­ner­a­tion di­rectly to the em­ployee. There­after, the trust would pay the money to the em­ployee in the form of loans (usu­ally in­ter­est free) on terms which ef­fec­tively meant that they would never be re­paid dur­ing the em­ployee’s life­time. As we have ex­plained on our in­sti­tute’s web­site, work­ers would be se­verely hit if and when taxes are im­posed on trans­ac­tions some of which go as far back as twenty years ago.

This is lit­tle sym­pa­thy for those peo­ple who adopted dis­guised re­mu­ner­a­tion in order to avoid (evade) tax and na­tional in­sur­ance con­tri­bu­tions and knew ex­actly what they were do­ing. How­ever, oth­ers do not de­serve heavy penal­ties as they may not have un­der­stood the schemes or had a choice if they wanted the work.

In Bri­tain, work­ers such as nurses, teach­ers, in­for­ma­tion tech­nol­ogy work­ers and clean­ers were of­ten paid earn­ings at around the na­tional min­i­mum wage with the bal­ance be­ing paid through loan ar­range­ments. They may have been un­easy about re­ceiv­ing loans rather than pay but as­sumed that em­ploy­ers were act­ing within the law. HMRC should have acted far sooner against the schemes. It is be­yond doubt that em­ploy­ees and con­trac­tors in dis­guised re­mu­ner­a­tion loan schemes were avoid­ing tax. We urge HMRC to adopt a sym­pa­thetic and flex­i­ble ap­proach that would al­low peo­ple ex­tended time to pay their tax bills. The ex­che­quer’s need to re­cover tax lost needs to be bal­anced with le­git­i­mate ex­pec­ta­tions.”

Ac­tu­ally, it was for­mer Chan­cel­lor of the Ex­che­quer, Ge­orge Os­borne ( who is now the Edi­tor of “Evening Stan­dard”, a free news­pa­per) and a fierce critic pf Prime Min­is­ter Theresa May whom he has la­belled as “Dead Woman Walk­ing” who an­nounced the (tax) charge in his 2016 Bud­get and ex­pected to raise £1 Bil­lion from em­ploy­ers, com­pa­nies and in­di­vid­u­als.

In its very mea­sured re­sponse, HMRC in­sisted:

“Our pol­icy mea­sures en­sure that those who have used dis­guised re­mu­ner­a­tion tax avoid­ance schemes pay their fair share of tax and na­tional in­sur­ance. We ac­cept 95 per cent of Time to Pay re­quests cov­er­ing ac­cel­er­ated pay­ments. Any tax­payer who thinks they will have prob­lems pay­ing tax bills should talk to us. We have an out­stand­ing record for supporting those with gen­uine fi­nan­cial dif­fi­cul­ties.

In July this year, the Supreme Court ruled in favour of Her Majesty’s Rev­enue & Cus­toms af­ter a long run­ning dis­pute over off­shore trusts used by Rangers Foot­ball Club in a case that would have wide rang­ing im­pli­ca­tions for sim­i­lar tax avoid­ance schemes.”

The credit for the video was rightly awarded to Vanessa Houlder.

Straight af­ter the cof­fee-break, Don­ald Trump was back on cen­tre stage:

“It is not true that I hate everybody but there are times when you have to fight for what you be­lieve and make things bet­ter. Nei­ther is it true that I only like peo­ple who are like me; or that I am only com­fort­able with bil­lion­aires. I have just had a ter­rific meet­ing with Paul Rudd who is my long-time friend and con­fi­dant. He is my gen­uine friend. That he is a very suc­cess­ful busi­ness­man is an en­tirely sep­a­rate mat­ter.”

What Trump chose to brush off is that he is not only the wealth­i­est Pres­i­dent of the United States of Amer­ica ever but his cab­i­net is sat­u­rated with bil­lion­aires like Wil­bur Ross, the U.S. Com­merce Sec­re­tary who is worth $2.5 bil­lion; Carl Ichan, Trump’s Special Ad­vi­sor on Fi­nan­cial Reg­u­la­tion worth $16 bil­lion; Steve Sch­warz­man who is the Chair­man of Trump’s Strate­gic & Pol­icy Fo­rum who has a net worth of $11.8 bil­lion; Stephen Fein­berg, Trump’s Un­of­fi­cial In­tel­li­gence Ad­vi­sor

We must never re­gard as “nor­mal”the reg­u­lar and ca­sual un­der­min­ing of our demo­cratic norms and ideals. We must never meekly ac­cept the daily sun­der­ing of our coun­try. I have been so wor­ried about the state of our dis­union that I re­cently wrote a book called “Con­science of a Con­ser­va­tive: A Re­jec­tion of De­struc­tive Pol­i­tics and a Re­turn to Prin­ci­ple.” I meant for the book to be a de­fense of prin­ci­ple at a time when prin­ci­ple is in a state of col­lapse

who is worth $1.2 bil­lion; Co-chair­men of Trump’s In­fra­struc­ture Com­mit­tee - Richard LeFrak and Steven Roth who are worth $6.5 bil­lion and $1.1 bil­lion re­spec­tively.

Don­ald Trump took the XKPMG part­ners com­pletely by sur­prise when he in­sisted that since we had all lis­tened to the Pres­i­dent of the In­sti­tute of Char­tered Ac­coun­tants in Eng­land and Wales, Mr. Nick Parker, there are other mat­ters which should be of grave con­cern to us. As if on cue, the front page of “The Fi­nan­cial Times” of 16th Septem­ber 2017 popped up on the screen with the bold head­line: Kpmg Axes South Africa Ex­ec­u­tives As Gupta Rocks Pro­fes­sional Ser­vices:

“The South African scan­dal en­gulf­ing Pres­i­dent Ja­cob Zuma and the bil­lion­aire Gupta fam­ily spread deeper into the global pro­fes­sional ser­vices sec­tor yes­ter­day when eight se­nior ex­ec­u­tives were dis­missed from KPMG’s di­vi­sion in the coun­try.

The big­gest po­lit­i­cal scan­dal to face South Africa since the apartheid era has al­ready trig­gered the col­lapse of PR firm Bell Pottinger and forced McKin­sey, the con­sul­tancy firm, to launch an in­ves­ti­ga­tion into its work in the coun­try.

Pub­lic out­rage about the Gup­tas’ role in South African pol­i­tics in­ten­si­fied in June when leaked emails fu­elled fears the fam­ily was ex­ploit­ing its friend­ship with Mr Zuma to win state con­tracts and ma­nip­u­late po­lit­i­cal ap­point­ments. The fam­ily and Mr Zuma deny the al­le­ga­tions.

The KPMG de­par­tures came af­ter an in­ter­nal in­ves­ti­ga­tion found the firm had missed red flags in its au­dit­ing of com­pa­nies owned by the Gupta fam­ily. The au­di­tor said on Fri­day that KPMG South Africa had re­ceived warn­ings “re­gard­ing the in­tegrity and ethics of the Gup­tas” that were not acted upon, and which should have led to it cut­ting ties with the fam­ily sooner.

KPMG au­dited com­pa­nies linked to the Gup­tas for 15 years but ended its re­la­tion­ship with them in March 2016 as the po­lit­i­cal scan­dal over the fam­ily’s links to Mr. Zuma deep­ened.

Trevor Hoole, the KPMG South Africa chief ex­ec­u­tive who left yes­ter­day, ad­mit­ted last month that the group “should have stopped work­ing for the Gupta com­pa­nies sooner than we did”.

KPMG has be­come cen­tral to the Gupta scan­dal since the leaked emails showed its South African of­fice al­lowed a Gupta-owned com­pany, Linkway Trad­ing, to treat spend­ing on a Gupta fam­ily wed­ding as a busi­ness ex­pense.

Op­po­si­tion par­ties and ac­tivists, who have ac­cused Mr Zuma of run­ning a state sys­tem rid­dled with cor­rup­tion and crony­ism, have turned their fo­cus on global com­pa­nies tainted by the scan­dal.

Save South Africa, a civil so­ci­ety group, has ac­cused KPMG and Bell Pottinger of play­ing a “cen­tral role in fa­cil­i­tat­ing state cap­ture”. It has urged KPMG and McKin­sey clients to drop the firms.

KPMG has de­nied that it “was in­volved in, or con­doned, any al­leged money laun­der­ing ac­tiv­i­ties” con­nected to Gupta-owned com­pa­nies or fa­cil­i­tat­ing off­shore tax eva­sion.”

Pres­i­dent Trump was back on his feet: “I am par­tic­u­larly con­cerned by these un­savoury de­vel­op­ments be­cause when I hosted African lead­ers last month in New York dur­ing the United Na­tions Gen­eral As­sem­bly, I as­sured them that the United States of Amer­ica is re-as­sess­ing Africa with a view to des­ig­nat­ing it as the new fron­tier for Amer­i­can com­pa­nies for in­vest­ments. The re­sponse has been most en­cour­ag­ing.

Au­di­tors play a cru­cial role in en­sur­ing the sta­bil­ity and in­tegrity of the fi­nan­cial sys­tem. I have al­ready im­plored the Pres­i­dent of the World Bank Dr. Jim Yong Kim; Mr. An­to­nio Guter­res, Sec­re­tary-Gen­eral of the United Na­tions; and Mrs. Chris­tine La­garde, Pres­i­dent of the In­ter­na­tional Mone­tary Fund to set up a com­mit­tee to thor­oughly in­ves­ti­gate all these com­plaints against au­di­tors – with­out com­pro­mis­ing the lessons learnt from the demise of Arthur An­der­sen fol­low­ing the En­ron Scan­dal.

I in­tend to nom­i­nate, Mr. Barry Me­lan­con the Pres­i­dent of the As­so­ci­a­tion of In­ter­na­tional Cer­ti­fied Pro­fes­sional Ac­coun­tants; Ms. Rachel Grimes the Pres­i­dent of the In­ter­na­tional Fed­er­a­tion of Ac­coun­tants [IFAC] and Mr. Nick Parker, Pres­i­dent of the In­sti­tute of Char­tered Ac­coun­tants in Eng­land and Wales [ICAEW] to join them.

We must re­store con­fi­dence in au­di­tors and dis­suade ac­coun­tants from mort­gag­ing their souls, re­gard­less of whether or not they have re­tired.” Pres­i­dent Trump was not done yet. “I be­lieve in lead­er­ship by ex­am­ple and that is why it is not suf­fi­cient for me to urge Amer­i­can com­pa­nies to in­vest in Africa.

The first Su­per Trump Tower in Africa is go­ing to be built on the site of the de­mol­ished Chief J.K Ran­dle Me­mo­rial Hall and the ad­ja­cent Dr. J.K. Ran­dle Swim­ming Pool plus what was pre­vi­ously known as the Love Gar­den. Con­se­quently, we shall serve no­tice on Con­struc­tion Kaiser Lim­ited and Ford Foun­da­tion as well as oth­ers (par­tic­u­larly the gov­ern­ment) who have in­vaded the land. The ethos of Amer­i­can busi­ness and phi­los­o­phy of enterprise is that what­ever can be han­dled by pri­vate en­deav­our should be left to the pri­vate sec­tor. The gov­ern­ment has no busi­ness in busi­ness. The rule of law must be seen to pre­vail; oth­er­wise busi­ness can­not thrive. In­deed, un­less Africa can get its act to­gether, the United States of Amer­ica and Europe will con­tinue to be bur­dened by the refugee prob­lem and the hope­less­ness which ISIS; Boko Haram; Al She­bab and other in­sur­gents have cap­i­talised upon and ex­ploited cyn­i­cally/ ruth­lessly.

Let me quote Gen­eral Thomas Wald­hauser - “With all the chal­lenges with the youth bulge, the poverty, the lack of gover­nance, the wide open spa­ces, these are ar­eas where ex­trem­ists like ISIS or Al Qaeda thrive. In places like the Sa­hel, in places like So­ma­lia, ISIS con­tin­ues to look for lo­ca­tion, looks for places to estab­lish it­self.”

Most un­ex­pect­edly, Don­ald Trump de­clared his com­mit­ment to Africa:

“I have made it clear that Amer­ica comes first in my vi­sion and strat­egy. Re­gard­less, I shall de­vote sig­nif­i­cant time to Africa and its 1 bil­lion peo­ple. We must abol­ish the per­ma­nence of suf­fer­ing. By the same to­ken, we can­not ex­pect Africans to em­brace tri­umph and dis­as­ter with the same phleg­mat­icsm. There will al­ways be con­se­quences.

I would like to seize this op­por­tu­nity to let the re­tired part­ners of KPMG who are still await­ing their gra­tu­ity and pen­sion that as we speak, some of the in­ter­ven­tions and ini­tia­tives I spoke about will com­mence shortly.

We have reached the tip­ping point and the tide must rise in our favour.”

It’s all over Wash­ing­ton D.C. The ru­mour is that Pres­i­dent Trump is re­ally only com­fort­able in the com­pany of fel­low bil­lion­aires. As he made his exit, we caught a glimpse of his bil­lion­aire pals – the heavy­weights of Amer­i­can busi­ness – led by Peter Thiel, the ven­ture cap­i­tal­ist and a co-founder of PayPal. Iron­i­cally, Jeff Be­zos of Ama­zon; Tim Cook of Ap­ple; Mark Zucker­berg of Face­book and Sun­dar Pichai of Google Inc. in­sisted that their lunch meet­ing with Pres­i­dent Trump had noth­ing what­ever to do with pol­i­tics – just busi­ness, es­pe­cially In­for­ma­tion Tech­nol­ogy and its im­pact on busi­ness.

As for Bill Gates, for­mer Chair­man of Mi­crosoft, he was adamant that his main fo­cus is on fight­ing poverty and dis­ease in Africa. The more money he gives away through his Bill and Melinda Gates Foun­da­tion, the more his wealth grows by leaps and bounds. Amaz­ing!!

Then Came the Break­ing News:

“Price­wa­ter­house­Coop­ers (PWC) es­ti­mates that 38 per cent of all jobs in the U.S. could be lost to au­to­ma­tion in just 15 years.”

“More than a third of U.S. jobs could be at “high risk” of au­to­ma­tion by the early 2030s, a per­cent­age that’s greater than in Bri­tain, Ger­many and Ja­pan, ac­cord­ing to a re­port re­leased Fri­day.

The anal­y­sis, by ac­count­ing and con­sult­ing firm PwC, em­pha­sised that its es­ti­mates are based on the an­tic­i­pated ca­pa­bil­i­ties of ro­bot­ics and ar­ti­fi­cial in­tel­li­gence, and that the pace and di­rec­tion of tech­no­log­i­cal progress are “un­cer­tain.”

It said that in the U.S., 38% of jobs could be at risk of au­to­ma­tion, com­pared with 30% in Bri­tain, 35% in Ger­many and 21% in Ja­pan.

The main rea­son is not that the U.S. has more jobs in sec­tors that are uni­ver­sally ripe for au­to­ma­tion, the re­port says; rather, it’s that more U.S. jobs in cer­tain sec­tors are po­ten­tially vul­ner­a­ble than, say, Bri­tish jobs in the same sec­tors.

For ex­am­ple, the re­port says the fi­nan­cial and in­sur­ance sec­tor has much higher pos­si­bil­ity of au­to­ma­tion in the U.S. than in Bri­tain. That’s be­cause, it says, Amer­i­can fi­nance work­ers are less ed­u­cated than Bri­tish ones.

While London fi­nance em­ploy­ees work in in­ter­na­tional mar­kets, their U.S. coun­ter­parts fo­cus more on the do­mes­tic re­tail mar­ket, and work­ers “do not need to have the same ed­u­ca­tional lev­els,” the re­port said. Jobs that re­quire less ed­u­ca­tion are at higher po­ten­tial risk of au­to­ma­tion, ac­cord­ing to the re­port.

Other in­dus­tries that could be at high risk in­clude hos­pi­tal­ity and food ser­vice and trans­porta­tion and stor­age.

An­a­lysts have said truck driv­ing prob­a­bly will be the first form of driv­ing in the U.S. to be fully au­to­mated, as long-range big rigs travel pri­mar­ily on high­ways — the eas­i­est roads to nav­i­gate with­out hu­man in­ter­ven­tion.

But ro­bots won’t nec­es­sar­ily re­place so many hu­man work­ers. The re­port highlights sev­eral eco­nomic, le­gal and reg­u­la­tory hur­dles that could pre­vent au­to­ma­tion, even in jobs where it would be tech­no­log­i­cally fea­si­ble.

For one, the cost of ro­bots — in­clud­ing main­te­nance and re­pairs — could still be too ex­pen­sive com­pared with hu­man work­ers. And in the case of self-driv­ing ve­hi­cles, ques­tions re­main about who is li­able in an ac­ci­dent. In other words, mov­ing ro­bots out­side of a con­trolled en­vi­ron­ment is “still a big step,” said John Hawksworth, chief econ­o­mist at PwC in Bri­tain.

Trea­sury Sec­re­tary Steven Mnuchin said Fri­day that he wasn’t wor­ried about ar­ti­fi­cial in­tel­li­gence tak­ing over Amer­i­can jobs.

“I think we’re so far away from that that it’s not even on my radar screen,” he told Ax­ios Me­dia. “I think its 50 or 100 more years.”

Mnuchin also said au­to­ma­tion would en­able hu­man work­ers to do more pro­duc­tive jobs at higher wages. “It’s taken jobs that are low-pay­ing,” he said. “We need to make sure we are in­vest­ing in ed­u­ca­tion and train­ing for the Amer­i­can worker.”

Au­to­ma­tion could end up cre­at­ing some jobs, the PwC re­port said. Greater ro­botic pro­duc­tiv­ity could boost the in­comes of those be­hind the new tech­nol­ogy, which Hawksworth said could flow into the larger econ­omy.

Sec­tors that are harder to au­to­mate, such as health­care, could also see a rise in jobs, he said.


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