Finweek English Edition - - Companies & markets -

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.

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