Sometimes life can really seem stranger than fiction. With everything going on in the country it was hard to make sense of Woolworths’ ability, or not, to sell cooked chicken and pies being the big talking point at the weekend. Initially I dismissed it as one of the cases of “fake news” (if it’s fake it’s not news) that have proliferated in this period.
Then there was the video of trade & industry minister Ebrahim Patel telling journalists that the policy on (not) selling hot prepared food had been clear all along, though the rationale for that stance seems far from clear. At this point I thought I had lost my senses, or the government had lost its own.
Then my brain started to run away with itself. Could there be sense to this madness? All governments need to have good deflection skills if they are going to get reprieve from an over-questioning populace. If one thinks about it, having the Twitter influencers involved in a slanging match over Woolworths and chickens is surely better than having them discussing why, almost a month after the president announced his intention to close the economy, we still don’t have anything resembling a coherent and systematic plan on how to deal with the aftermath.
As reported by Warren Thompson last week, this newspaper has been inundated with e-mail letters from desperate small businesses, some of which are about to enter their fourth week with no income, who can’t access the various promised measures of support from bodies such as the notoriously inefficient Unemployment Insurance Fund.
If I were in government I would also prefer it if the influencers were focused on Woolworths’ chickens. Even that debate didn’t seem to be what one would describe as of the highest quality. The point, it seemed, was not whether the ban was legal, rational or damaging to the economy, but a sort of culture war between the woke and the Woolworths-frequenting middle classes.
It’s a pity because there are economists and professionals out there producing interesting papers that are worthy of debate. Under the banner of the “Covid-19 Economists Group” chaired by Miriam Altman of the University of Johannesburg, one such initiative has covered a range of topics from fiscal policy to how to channel wage support for those who might find themselves temporarily without an income due to their employers shutting down.
Many of the measures, or at least versions of them, have been tried elsewhere, which makes it extra frustrating that after its “special” meeting last week the best the cabinet could come up with was a promise of yet more consultation and more committees. It’s fingers crossed that after Monday’s meeting, which comes just 10 days before the end of the lockdown — in theory at least — it will have something of substance to present to the nation.
The paper by Intellidex’s Stuart Theobald, a Business Day columnist, discusses the feasibility of a bridging finance scheme to stop companies that are otherwise solvent from keeling over during the crisis. It is too detailed for a quick summary here, but the point is that while we have barely started, other countries are at the stage where they are assessing the effectiveness of their interventions.
The UK, for example, has something called the coronavirus business interruption loan scheme (CBILS) to enable banks to channel money to struggling firms, with its treasury having agreed to underwrite 80% of the cost if the loans are not repaid. The debate has since moved on to whether the government has to make this 100%, as the take-up from banks has been disappointing so far, meaning struggling firms are not getting the finance they need.
That country has already developed a scheme to support wages for workers who are forced to take unpaid leave due to temporary closures. Britain’s finance minister Rishi Sunak initially won praise across the board after the government said it would underwrite 80% of the wages of workers who would otherwise be retrenched.
When rich soccer clubs such as Liverpool and Tottenham Hotspur, or billionaires such as Richard Branson and Philip Green, whose Arcadia Group owns brands such as Topshop, started using it, unease grew. It raised debates about perverse incentives as rich individuals and companies used it to score a generous subsidy from taxpayers.
But the point they illustrate is that the important thing is not to come up with the perfect plan first time. The urgency of the situation requires action now, and if problems emerge later, we can tweak.
Of course, that has its problems too. From the debacles over children’s travel documents to more recent debates about the sale of alcohol and cooked chicken during the lockdown, the ANC machinery and its inflexible ideologues isn’t one that encourages speedy rethinking when policy turns out to be bad.
Among the papers referred to earlier, ANC/SACP/Cosatu hardliners might find Michael Sachs’s paper an interesting read. They may, for example, be enthusiastic about the possibility of a solidarity or wealth tax, which will, of course, outrage their opponents on the right of the political and economic spectrum. But they might also be horrified at the mere mention of the country going to their favourite bugbear, the IMF, for a loan.
They will probably have the same response to Andrew Donaldson, another former Treasury official. There will be a lot of love for his suggestion of more aggressive intervention by the Reserve Bank, while less of an enthusiastic response to the idea that consolidation will have to follow at some point.
At least they’ll be engaged in something rather more fruitful than the government’s irrational attack on middle-class people who can’t cook for themselves.
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