Mboweni: Treasury not 'actively' considering prescribed assets

[konfab]

It's not about government spending your money as they see fit. It's about investing in the country. Yes, the ANC ****ed up, especially during Zuma's reign - things were actually on track before. I also understand, and agree, it's difficult to put any trust in any government, especially the ANC. And yes, I see prescribed assets as an absolute last resort but if we want things to turn around here we need to take on the risk of investing more in the country, however we choose to do it. Otherwise you may as well just go now, you've already given up on any future here. It also becomes a self-fulfilling prophesy - everyone runs with their money because they are afraid the country will crash and burn, but the very act of everyone running away with their money is what causes the country to crash and burn. Shrug. No easy answers here but my opinion is that if you choose to stay here and raise a family then it's in your interest to support any initiatives that will help turn things around. My main disclaimer here is that prescribed assets should only be an option once corruption is dealt with publicly and comprehensively. Until people are held to account, money is retrieved and people are punished, it's an absolute no go from me too.

Any incentive right?
Well in that case, I would gladly fund a free helicopter ride incentive for every communist party member in the country, as it is their dumb ideology that is the cause of the problem.

By all accounts, Eskom has too many employees. So what does the wise and all knowing Pravin Gordhan do? He says that no retrenchments will take place.

 

[Mista_Mobsta]

So you don't know how the current system works? Government already gets pension investment by advertising projects and promising a certain return, most of your low risk funds do this.

The difference here is that you cant pick what you want to invest in, who in their right minds would want to invest into Eskom?

This is what people don't seem to understand. Government already borrows heavily from pensions via the following method: Government Bonds!
The government issues bonds with the intent to raise funds. As it currently stands, local funds/banks (South Africans) currently own +- 63% of government issued bonds.
Is that not already enough of a funding tool for the moronic imbeciles in government?
No - purely because there is zero oversight on how they spend/(mis)manage the funds.
@C4Cat -> I do agree that a capital outflow would ruin SA's economy but the fact remains that prescribed assets is just politician speak for "expropriated savings". I agree that accountability in the form of civil AND criminal punishment must be enforced to stop the trough feeders from reaching any hard earned taxpayer money.
Lastly, SA does have more funding methods available (IMF anyone?) but our esteemed government knows the funding comes with some hefty restrictions. The ANC can't live up to the expectations of the IMF as they will lose power.
Proof, yet again, that the ANC never has and never will care about the country:
ANC 1st
Cadres 2nd
Struggle icons 3rd
South Africa Last

 

[grok]

No, it won't affect anyone because it's not policy and is not currently being considered as policy.

TIA! Who knows what tomorrow will bring..

 

[SaiyanZ]

That opinion is a stretch. I'll worry when the government actually makes concrete moves in that direction, not 'trojan horse' conspiracy opinions. Right now, it's not policy. In any event, I'm not convinced it's a terrible idea, tbh

When concrete moves are made, local equity will take a big hit as people pull out. Might be too much of a hit to risk waiting. Fixed deposits and cash (if not going offshore) seem a lot safer right now than SA equities. Interest rates will probably go up a bit too when we get downgraded to junk next year, making cash more appealing.

The only equity I have now is my retirement savings. Offshore/USD linked I have crypto. The rest is in fixed deposits/cash.

 

[Mephisto_Helix]

That opinion is a stretch. I'll worry when the government actually makes concrete moves in that direction, not 'trojan horse' conspiracy opinions. Right now, it's not policy. In any event, I'm not convinced it's a terrible idea, tbh

them rose tinted specs keep making dumb …..

 

[Sinbad]

The anc denies it.
Ergo, it is true.

 

[MachoPants]

Or it is being closely looked at behind closed doors, and they carry on , " with everyday is business as usual screwing the people, they wont/can't do anything.

 

[C4Cat]

So you don't know how the current system works? Government already gets pension investment by advertising projects and promising a certain return, most of your low risk funds do this.

The difference here is that you cant pick what you want to invest in, who in their right minds would want to invest into Eskom?

If we want electricity we need to invest in it, no?

 

[BBSA]

If we want electricity we need to invest in it, no?

Just fix Eskom, and people will invest.

 

[ArtyLoop]

The anc denies it.
Ergo, it is true.

Thanks, I was about to say the same thing

 

[ArtyLoop]

Just fix Eskom, and people will invest.

Not so simple, its more than that. They need to make the EWC horseshyte go away too

 

[SaiyanZ]

If we want electricity we need to invest in it, no?

You don't have to invest. I have internet from Telkom but I don't own any Telkom shares. Just pay them a monthly fee. Electricity can/should work the same way.

 

[C4Cat]

You don't have to invest. I have internet from Telkom but I don't own any Telkom shares. Just pay them a monthly fee. Electricity can/should work the same way.

Electricity generation and distribution is not really profitable for private companies here, not unless you, as consumer, are willing to pay a lot more than you currently do (scuse the pun) for electricity. Mbeki tried privatizing it (along with other SOEs) in 2002 already, nobody from the private sector was interested in taking it on. (IIRC, at the time government announced its intention to privatise all SOEs by 2004.)

 

[SaiyanZ]

Electricity generation and distribution is not really profitable for private companies here, not unless you, as consumer, are willing to pay a lot more than you currently do (scuse the pun) for electricity. Mbeki tried privatizing it (along with other SOEs) in 2002 already, nobody from the private sector was interested in taking it on. (IIRC, at the time government announced its intention to privatise all SOEs by 2004.)

If government stays out of it, someone will do it in a free market. Supply vs demand and there will always be demand. It would probably be cheaper too as right now we have to pay for the basic free allocation, Soweto and all the municipalities that don't pay. Cut all that out and you'd probably pay less per KWh.

The only major hurdle is the network/distribution investment cost but private internet providers have got past that so private electricity companies should also be able to get past that.

 

[C4Cat]

If government stays out of it, someone will do it in a free market. Supply vs demand and there will always be demand. It would probably be cheaper too as right now we have to pay for the basic free allocation, Soweto and the municipalities that don't pay. Cut all that out and you'd probably pay less per KWh.

I don't think you really grasp how expensive it is to generate and distribute electricity. Prices would definitely go up, not down. Why do you think electricity is more expensive in most of the rest of the world, compared to SA? The free basic allocation isn't going away (and is necessary here) and setting up a distribution network will have to be done everywhere, including Soweto, even if only for those customers who do pay. If this country is ever going to get out of the mess it's in, one of the most basic requirements is access to electricity everywhere in the country

 

[ToxicBunny]

I don't think you really grasp how expensive it is to generate and distribute electricity. Prices would definitely go up, not down. Why do you think electricity is more expensive in most of the rest of the world, compared to SA? The free basic allocation isn't going away (and is necessary here) and setting up a distribution network will have to be done everywhere, including Soweto, even if only for those customers who do pay. If this country is ever going to get out of the mess it's in, one of the most basic requirements is access to electricity everywhere in the country

Ummm just a point of clarity....

In the glorious US of A, the average price of the electricity is 12 cents, so using todays exchange rate that equates to R1.78. Large swathes to the US Grid are privatised and they're making money... so no electricity doesn't necessarily have to go up in this country if they can do it in the US of A for roughly the same price we get it here (even cheaper in some cases)

 

[C4Cat]

Ummm just a point of clarity....

In the glorious US of A, the average price of the electricity is 12 cents, so using todays exchange rate that equates to R1.78. Large swathes to the US Grid are privatised and they're making money... so no electricity doesn't necessarily have to go up in this country if they can do it in the US of A for roughly the same price we get it here (even cheaper in some cases)

According to this it's $0.14 which is average... (SA is at $0.12)
https://www.globalpetrolprices.com/electricity_prices/

 

[R13...]

Ummm just a point of clarity....

In the glorious US of A, the average price of the electricity is 12 cents, so using todays exchange rate that equates to R1.78. Large swathes to the US Grid are privatised and they're making money... so no electricity doesn't necessarily have to go up in this country if they can do it in the US of A for roughly the same price we get it here (even cheaper in some cases)

It probably works in places like the US because people pay. It didn't work in India because they have something akin to our culture of non-payment. Getting private investors in generation didn't work like c4cat said because of low prices. I doubt anyone would be willing to invest the kinds of money it takes to build Eskom scale plants. Selling them is also not a good a idea and you'd not have takers, because they didn't do a good job of looking after them and private investors won't want to invest in bringing them up to code what with carbon taxes and profits to earn.

 

[Johnatan56]

According to this it's $0.14 which is average... (SA is at $0.12)
https://www.globalpetrolprices.com/electricity_prices/

rather pick something like this: https://www.eia.gov/electricity/monthly/epm_table_grapher.php?t=epmt_5_6_a
Then take a similar state that is like South Africa, probably just average it to the cheapest 5/6, up to maybe 10 small states for land mass equivalence.

The average electricity price also includes e.g. Alaska, which messes the average up quite a bit, just a quick screenshot:

23 and 31 Hawaai versus Idaho's 10.18 for residential (yes, so that would mean it's more like 10-12c for most places, cheaper than SA. Hawaii, Alaska and California drag the numbers up, and California has so many issues, and yes, renewable is one of them, they invested a ton into it before it was as cheap as it is now, and I think up until this year there was an added levy which was used to fund tax cuts on people who install rooftop solar).

Electricity prices in California rose three times more in 2017 than they did in the rest of the United States — Environmental Progress

Between 2016 and 2017, California’s electricity prices rose three times faster than they did in the rest of the United States, according to a new analysis by Environmental Progress. The increases came despite 2017 having the highest output of hydroelectricity — the state’s cheapest source of elec

environmentalprogress.org

 

[ToxicBunny]

It probably works in places like the US because people pay. It didn't work in India because they have something akin to our culture of non-payment. Getting private investors in generation didn't work like c4cat said because of low prices. I doubt anyone would be willing to invest the kinds of money it takes to build Eskom scale plants. Selling them is also not a good a idea and you'd not have takers, because they didn't do a good job of looking after them and private investors won't want to invest in bringing them up to code what with carbon taxes and profits to earn.

Yeah, my point of issue with his post was that Electricity prices would have to go up, when its evident that they wouldn't (making assumptions about payment cultures and all that of course)

And the reason no investors were interested in Eskom back in the day were the low prices, and probably the already evident lack of maintenance of the fleet.