WHAT MADNESS WILL THEY DREAM UP NEXT?
IN A FREE MARKET economy, I’ve never seen the economic logic for a “windfall tax” on Sasol and PetroSA, especially when Government is apparently also considering how to encourage Sasol to invest huge sums in more synfuel capacity. The attempted justification that it’s because they were built up in part with State money is both the retrospective politics of revenge and envy, and a little hard on investors – many of them foreign – who bought shares in good faith after the listing, contributing to our healthy balance of payments.
But there’s not even that flimsy excuse for the suggestion that a similar tax could be imposed on all mines’ “excess” profits. The turnover-linked royalties they will soon face will amount to much the same thing anyway.
Above all, though, the mind boggles at the thought of a bunch of grey-suited civil servants – even Pravin Gordhan’s finest – sitting around a table to decide the “right” price of copper. Or, say, ruthenium. Or antimony. Or… but I needn’t go on, need I?
And I take it the authorities realise that if they impose “excess” profits taxes in volatile industries, they will have to subsidise the same operations in hard times. We must have symmetry in these matters, mustn’t we?
I was planning to write nice things this week about the proposed easing of regulation in petrol retailing, and the social security proposals. But I can usually rely on the public sector to do something to relieve me from such unnatural benevolence and it didn’t let me down.