Malema: Nationalisation will unite SA

[FatBoySlim]

"ten percent of the South African population was made up of whites yet they controlled 90 percent of the wealth. " - 16 yrs into democracy and theyve made this much progress, thing is, its not easy to remove laziness from a culture.

 

[killadoob]

"ten percent of the South African population was made up of whites yet they controlled 90 percent of the wealth. " - 16 yrs into democracy and theyve made this much progress, thing is, its not easy to remove laziness from a culture.

You can never remove it, all you can do is take from the hard workers and hand it out to the lazy who will run the country into the ground.

 

[DJ...]

To those of you who are pro-nationalisation, please address the following issues and questions which I raised when VioAdmin went on the nationlisation rampage. Unfortunately he hasn't been able to reply to any of them yet, probably because he's too busy running his very successful international company. Or so he claims...

Mining requires massive capital funding on a continuous basis, especially in South Africa where our mining efforts are quickly falling from the top of the perch they were once situated on. Unfortunately for the proponents of nationalisation, this funding requirement will be their downfall as there is simply no way for the government to be able to secure the necessary funding to remain competitive in this sort of global environment, not without illegally doing so in terms of international trade and therefore risking an embargo. This is not even beginning to consider the impact of adding this required debt to our already stretched balance sheet. And the cherry on top is that they willnot be able to access this funding through the traditionally cheaper capital markets, nor through investors, as they would flee any government controlled company.

Eskom embody everything wrong with nationalisation because they highlight the exact problems that every single nationalised company has faced: principal-agent issues; long-term capital funding failures; inefficiency; moral hazard; slowly becoming uncompetitive as a result of not being able to compete with better funded global companies etc.

The ANCYL seem to believe that they can redirect the cash flow of Billiton for example into the fiscus but it simply doesn't work like that. And let's not forget that miners make up the vast majority of our stock exchange, so much so to the point that when Anglos and Biillitons move sharply, so does the All Share Index. This would have a very negative impact on liquidity flows and see much of it redirected outside of our borders.

No longer do I think that Malema is doing this to curry favour with voters - I now see this as something far bigger. IMO he's going to suggest that we do something similar to what Nigeria are currently doing, where they are imposing near impossible targets for banks to comply with. If they fail to do so, they are nationalised with no compensation. This is what I see Malema proposing happen in SA and it's a far more eloquent way for him to package than merely passing a new blanket "nationalisation" law. He could in fact use economic terrorism as an argument for it - in fact the new secrecy bill might just be a pre-emptive strike at exactly this. If this happens, we truly will have a major problem on our hands...

How exactly will "Nationalisation" or the administration of the mines be better than it is now?
How will Taxes be paid if the mines are owned by the Government?
How will liabilities be offset in the capital intensive mining industry?
Will YOU pay from your personal income taxes the costs of mining and prospection?

Privatization is (actually) a MASSIVELY beneficial innovation of commerce that sprang about in the 1800's because it has huge benefits for shielding industry sectors from each other and allowing risks to be taken which don't sink the entire GOVERNMENT along with it!
This is why we no longer have kings owning every little company and industry any more. The risk is too high to have one entity responsible for running everything and funding it and being LIABLE (financially) for it too.

In a nationalised system, if a mine were to go under causing a MASSIVE dent in the national budget, we would have to "rescue" that mine with TAX money.
Yours and mine and if the mine was no longer viable (the minerals DO run out eventually) then who picks up the can for this?
The government?
and when it runs out of money? They either cut back on expensive social welfare and medical and / or they print money and inflate the money supply and make your life savings worth NOTHING in as little as 5 years.

And that's ONE Mine...
If there's an industrial action in the "Government Workers Union" which would now include all the newly nationalised employees of the state, how would you settle wage negotiations? What are you in fact actually paying your new government employees with? Tax money?
Tax money collected from whom? The other nationalised workers and new government employees?
This confusion leads to: Higher personal taxes because everyone's wages are actually paid from everyone's taxes and if one sector's employees demands higher wages, they get it at the expense of another sector's employees... and the problem COMPOUNDS with interest...

And add into that concept: Bank Charges and Interest on loans and other suggestions and picture what will happen when there are no barriers to for everyone getting to one another's money...

It will not be "fair" or "nice"... Wars have happened over less.

But the Alexkor bailout is small change when compared to our other State-owned enterprises. Mismanagement has lead to billions pouring out of State coffers in
cash bailouts and other forms of financial assistance.

Eskom: R 208.67-billion
SAA: R5.2-billion
SABC: R2.23-billion
SA Post Office: R1.54-billion
Land Bank: R 9.2-billion
Denel: R8.82-billion
Pebble Bed Modular Reactor: R4.86-billion
Development Bank of South Africa: R15.2-billion
Sentech: R953-million
Nuclear Energy Corporation of South Africa: R586-million
Others: R 174-million

Right vio - I'll give you one more chance then to address the crux of my arguments against nationalisation which I have already posted yet you conveniently ignored.

Please address the liquidity flow issues relating to nationalisation.
Please address the issue of principal-agent and nationalisation.
Please address the inherent funding issues resulting from the mining industries.
Please address how we manage a balance sheet with additional debt considering these ongoing capital requirements.
Please address the inefficiencies in nationalised organisations (as has been evidenced all over the world).
Where would the government's ownership interests sit within the capital structure, considering that this would hit common shareholders massively (i.e. creating more poverty.)
How do you propose addressing the outflow of capital resulting from perception in the capital markets of a threat to their investments (this is inevitable - you cannot refute that this would not happen.)
How do you address government's paradoxical stance on the reduction of short-term costs, where historically it results in higher long term costs?
How do you introduce walls between a bank's lending practices and the policies of state?
How do you propose nationalising banks while maintaining control of the reserve bank without a conflict of interest arising?
How do you propose maintaining competitiveness in the marketplace when profits are redistributed into other areas of the economy instead of being reinvested (considering that this is what you're proposing)?
How do you resolve the issue that by potentially funding with taxpayers' money, you eradicate profit motive? Remember that governments are not profit generating institutions and are certainly not adept at doing so.
How do you propose nationalisation without defaulting on existing bond deals used to finance previous operations? They cannot simply be quashed. In case you're not aware of the structure of these fixed income deals, please research the outstanding bond issues from BHP Billiton, Anglos, Standard Bank and FNB (as examples.) Default on any of these and your entire balance sheet is shot to schit. And you will default, considering that the events of default clauses in these deals clearly stipulates a change in management structure not explicitly agreed to by shareholders as a default.
How do you maintain the AAA credit rating of these institutions (would you make guarantees on the balance sheet?)? Again, you'd have to - another blow to our balance sheet and yet another huge risk to the country as a whole.
What do you propose the government does with the tax shortfall due to nationalising these companies?

Those are just a few off the top of my head. Once you've addressed these we can move on to round 2. I sincerely look forward to your answers...

 

[rainynight65]

Anyone who believes that nationalization will actually benefit the people, has missed 50 years of communism. Entire continents stand witness to the fact that these concepts always fail in reality. I see absolutely nothing that makes me believe South Africa would do any better than that.

 

[Vrotappel]

Malema is a hollow headed dangerous fool.

I believe nationalisation of the mines is the way to go. The minerals/gas/liquid in the ground belongs to the country, not a few rich individuals.

What gives you the idea that it belongs to a few rich individuals?

 

[killadoob]

What gives you the idea that it belongs to a few rich individuals?

He means the owners and share holders, he wants the likes of malema and zuma to become rich and run the mines into the ground with mass job losses rather than what is happening now.

 

[Albereth]

He means the owners and share holders, he wants the likes of malema and zuma to become rich and run the mines into the ground with mass job losses rather than what is happening now.

I wonder what will happen when the trade unions wake up to the fact that pension schemes probably have an investment in the mines too.

 

[killadoob]

I wonder what will happen when the trade unions wake up to the fact that pension schemes probably have an investment in the mines too.

Well cosatu are against nationalisation aren't they? The unions know what happens when governments get involved.

 

[BBSA]

Well cosatu are against nationalisation aren't they? The unions know what happens when governments get involved.

Did you mis this thread?

Cosatu had encouraged the ANC Youth League to place nationalisation firmly on the agenda, he said.

 

[Ricard]

LOL!

Malema, the poor dyslexic wood-worker.. He meant to write

Malema: Nationalisation will untie SA

 

[DJ...]

I wonder what will happen when the trade unions wake up to the fact that pension schemes probably have an investment in the mines too.

This has been on my mind for a bit too considering that the PIC are the single largest investor in SA, however I see money being "redistributed" from the PIC to fund nationalisation. The unions are well aware of this, but remember one thing: the unions are introducing their own pension and provident fund schemes for their members. There are already NUMSA-branded provident fund schemes available, all managed by Thebe Investments and South African Quantum (who [allegedly] bribed Vavi's wife to market their products to the unions.) Nothing ever came of that though, which is a pity considering it was an open and shut case against her and SA Quantum...

 

[DJ...]

Well cosatu are against nationalisation aren't they? The unions know what happens when governments get involved.

Hell no. Cosatu want nationalisation to go ahead and are firmly behind this agenda. Cosatu will gain even more power should nationalisation get the go ahead. in fact finally, a union would have a seat on the board (just think of those consequences.)

 

[JungleBoy]

Just look at the aurora mess! Pillaged and broken, gone.

Was it nationalised ?

 

[killadoob]

Hell no. Cosatu want nationalisation to go ahead and are firmly behind this agenda. Cosatu will gain even more power should nationalisation get the go ahead. in fact finally, a union would have a seat on the board (just think of those consequences.)

Eish boy i must have read something very wrong then .

O well we all knew the day was coming, just a matter of time.

 

[DJ...]

Was it nationalised ?

No, you're right, it wasn't - although they did appeal for government bailout money. However this does highlight the problem with politicians trying to run businesses. I have no issues with businessmen entering the political fray, but certainly have an issue with the opposite happening...

 

[JungleBoy]

No, you're right, it wasn't - although they did appeal for government bailout money. However this does highlight the problem with politicians trying to run businesses. I have no issues with businessmen entering the political fray, but certainly have an issue with the opposite happening...

I disagree. Khulubuse Zuma as one of the partners in Aurora is the nephew of JZ. However he has never been involved in politics and if I'm not mistaken he started off as a taxi boss in KwaMashu Dbn (owning in excess of 40 taxes).

Also, the people who have gone from politics to business have (contrary to what you are saying) have done very well for themselves. Considering the likes of Tokyo, Ramaphosa, Phosa, Ngcuka, Macozoma as just a pick of the bunch.

 

[DJ...]

I disagree. Khulubuse Zuma as one of the partners in Aurora is the nephew of JZ. However he has never been involved in politics and if I'm not mistaken he started off as a taxi boss in KwaMashu Dbn (owning in excess of 40 taxes).

That's the only name ever harped on about in the press, yet he is but one of many. And Aurora is a cesspool of politicians...

Also, the people who have gone from politics to business have (contrary to what you are saying) have done very well for themselves. Considering the likes of Tokyo, Ramaphosa, Phosa, Ngcuka, Macozoma as just a pick of the bunch.

Cyril and Tokyo were always in the business fray, long before they became political leaders. Before Tokyo was mayor of JHB he ran a few rather successful businesses and is why he left politics eventually - there was no way to balance the two lives he was trying to live. Cyril Ramaphosa is an exception who proves the rule imo. The others, er, not so much, but that's subjective.

My issue is politicians trying to be both at the same time. From my perspective, many high ranking ANC officials see absolutely no problems with holding a government position while being on the board of thirty private companies. It's absurd to believe that this is an attenable situation. Moreover, government officials tend not to make very good businessmen and I stand by this statement. I've dealt with far too many senior government officials to believe that they would in any way make decent businessmen, if it weren't for corruption. Of course there are the few exceptions, as stated but the majority rule the roost unfortunately...

 

[grok]

Face it, the ANC cannot ever ensure parastatals are run properly, how the hell are they going to keep the mines running?

How do you anyway trust someone who talks about uniting the people on one hand, while shouting 'kill the boer' from the stages. Malema cares about one thing, and one thing only, power and how to use it to grow his own pocket.