WEBVTT 00:00:05.099 --> 00:00:08.599 Hello and welcome to the So What podcast, in 00:00:08.599 --> 00:00:11.099 which political economic analyst J .P. Landman 00:00:11.099 --> 00:00:13.919 discusses the issues uppermost in the minds of 00:00:13.919 --> 00:00:16.640 South Africans. You can find a written version 00:00:16.640 --> 00:00:19.679 of this content on J .P.'s website, jplandman 00:00:19.679 --> 00:00:24.120 .co .za. I am Ruda Landman, and I am your host. 00:00:26.980 --> 00:00:31.179 This podcast goes with J .P.'s newsletter dated 00:00:31.179 --> 00:00:35.729 the 4th of June, 2025. And the title, Budgets 00:00:35.729 --> 00:00:40.250 and Tariffs, So Where Are We Now? I feel we've 00:00:40.250 --> 00:00:43.850 been here before. Yes, indeed. This is the third 00:00:43.850 --> 00:00:46.509 note that we're doing on budgets and tariffs, 00:00:46.689 --> 00:00:49.630 because the thing has been developing so much 00:00:49.630 --> 00:00:52.369 and in so many directions. But this is hopefully 00:00:52.369 --> 00:00:55.070 a conclusion of the budgets and tariffs story, 00:00:55.229 --> 00:00:58.689 certainly the budget story. Last time, you made 00:00:58.689 --> 00:01:01.170 the point that for the first time now, Parliament 00:01:01.170 --> 00:01:06.299 has the right, the freedom. to change the budget. 00:01:06.480 --> 00:01:09.500 And you were quite worried. You said this was 00:01:09.500 --> 00:01:12.500 a decisive moment. Absolutely. And you just have 00:01:12.500 --> 00:01:15.900 to look at the US to see what can happen if parliamentarians, 00:01:15.939 --> 00:01:19.420 in the case of the US, the Congress, dive into 00:01:19.420 --> 00:01:22.459 the budget and start changing numbers as it suits 00:01:22.459 --> 00:01:26.640 them. So it was what I labeled it in the last 00:01:26.640 --> 00:01:30.719 newsletter was it was a moment of decision. And 00:01:30.719 --> 00:01:32.560 I'm happy to say at the time of writing this 00:01:32.560 --> 00:01:36.260 note, the correct decisions seem to have been 00:01:36.260 --> 00:01:41.519 taken. The centre is holding in the sense that 00:01:41.519 --> 00:01:43.680 most of the middle parties are coming together 00:01:43.680 --> 00:01:47.599 around the budget as proposed by Treasury. Treasury's 00:01:47.599 --> 00:01:50.840 integrity and reputation is intact. And there's 00:01:50.840 --> 00:01:54.219 no splurge of either expenditure or higher debt. 00:01:54.420 --> 00:01:56.980 So I'm quite happy that the moment of decision. 00:01:57.920 --> 00:02:00.159 That moment has come and passed and we've taken 00:02:00.159 --> 00:02:03.079 the right decisions. For you, it is mainly about 00:02:03.079 --> 00:02:06.480 debt. Oh, absolutely. It's about debt stabilization. 00:02:07.719 --> 00:02:10.539 There's simply no question about it. The biggest 00:02:10.539 --> 00:02:14.139 single issue is to stabilize South Africa's debt, 00:02:14.280 --> 00:02:17.620 bring it down and save money on interest. And 00:02:17.620 --> 00:02:19.539 for that, the most important number in the budget, 00:02:19.659 --> 00:02:22.979 for me at least, is the primary surplus. And 00:02:22.979 --> 00:02:25.840 the primary surplus is simply whether your income 00:02:25.840 --> 00:02:28.000 is more than your expenditure before you start 00:02:28.000 --> 00:02:30.599 paying interest. We've run a primary deficit 00:02:30.599 --> 00:02:33.460 for a long time. Three years ago, we started 00:02:33.460 --> 00:02:36.539 with a primary surplus. This year in the budget 00:02:36.539 --> 00:02:38.639 that has now been tabled, budget number three, 00:02:38.719 --> 00:02:42.539 the primary surplus is budgeted to be 65 billion 00:02:42.539 --> 00:02:45.479 this year. Now, it means you will still run on 00:02:45.479 --> 00:02:47.740 a deficit. It means that you will still incur 00:02:47.740 --> 00:02:51.870 debt, take on debt, but with 65 billion. more 00:02:51.870 --> 00:02:54.409 in income than expenditure, the debt that you 00:02:54.409 --> 00:02:57.770 take on is decreasing. And over time, that helps 00:02:57.770 --> 00:02:59.909 to stabilize debt. So the primary surplus is 00:02:59.909 --> 00:03:03.030 a very important number. What's happening to 00:03:03.030 --> 00:03:06.870 the debt to GDP ratio? That has gone up a little 00:03:06.870 --> 00:03:09.650 bit, not because there's more expenditure, but 00:03:09.650 --> 00:03:12.050 because economic growth is budgeted to be lower. 00:03:12.389 --> 00:03:14.889 In February, with the first budget, economic 00:03:14.889 --> 00:03:18.789 growth was assumed that it would be 1 .9 % for 00:03:18.789 --> 00:03:21.430 the year. After the Trump tariffs that we've 00:03:21.430 --> 00:03:23.949 had and so on, the assumption in the budget now 00:03:23.949 --> 00:03:27.770 is that growth will be 1 .4%. So because there's 00:03:27.770 --> 00:03:30.990 less growth, but all the other numbers remain 00:03:30.990 --> 00:03:33.430 the same, therefore the percentage goes up a 00:03:33.430 --> 00:03:36.409 little bit. It goes up by 1 .2 % and it goes 00:03:36.409 --> 00:03:40.669 to 77 .5%, which is a high number. But if you 00:03:40.669 --> 00:03:42.650 compare it to many other countries in the world, 00:03:43.349 --> 00:03:45.490 you know, it's still doable. The trick is to 00:03:45.490 --> 00:03:47.509 bring that number down and you do that by way 00:03:47.509 --> 00:03:50.259 of primary surpluses. And that can only happen 00:03:50.259 --> 00:03:53.259 over years. It's not a short -term thing. You 00:03:53.259 --> 00:03:55.620 need time for that. But when you start running 00:03:55.620 --> 00:03:58.479 primary surpluses, as we are now doing, this 00:03:58.479 --> 00:04:00.939 will be the third year, then people sit up and 00:04:00.939 --> 00:04:02.800 they notice and the markets start responding 00:04:02.800 --> 00:04:06.449 and your interest burdens start declining. How 00:04:06.449 --> 00:04:09.009 has the market reacted? Actually quite good. 00:04:09.789 --> 00:04:16.310 If you take the rate when Budget 2 was tabled 00:04:16.310 --> 00:04:20.410 in April, the long rate, the long yield was sitting 00:04:20.410 --> 00:04:24.769 at 10 .75%. It has slowly come down, drifted 00:04:24.769 --> 00:04:29.870 downwards, about 38 basis points. Now, 0 .38%. 00:04:29.870 --> 00:04:33.170 Now, you can say 38 basis points is not a lot, 00:04:33.269 --> 00:04:35.290 but on the amount of money that the minister 00:04:35.290 --> 00:04:41.430 wants to borrow this year, 588 billion rand, 00:04:41.470 --> 00:04:45.589 it implies an interest saving of 2 .2 billion 00:04:45.589 --> 00:04:49.269 rand over 12 months. So it's a huge amount of 00:04:49.269 --> 00:04:51.350 money that you save in interest with a lower 00:04:51.350 --> 00:04:54.610 rate. With 2 .2 billion, you can appoint a lot 00:04:54.610 --> 00:04:56.790 of teachers and you can appoint a lot of doctors 00:04:56.790 --> 00:05:00.750 and you can fix up a lot of hospitals. So the 00:05:00.750 --> 00:05:03.230 long rate is not just a theoretical concept. 00:05:03.290 --> 00:05:06.790 It's very real. It determines the interest that 00:05:06.790 --> 00:05:09.089 you pay and the lower it is, the lower interest 00:05:09.089 --> 00:05:11.529 you pay, the more money you have available for 00:05:11.529 --> 00:05:14.569 other things. Well, we all know what interest 00:05:14.569 --> 00:05:18.750 rates mean on... a bond on your house or a loan 00:05:18.750 --> 00:05:22.209 on your car. Exactly. You mentioned something 00:05:22.209 --> 00:05:25.110 really unexpected, a possible source of extra 00:05:25.110 --> 00:05:27.810 money. It sounds as if the nation has a sock 00:05:27.810 --> 00:05:31.490 full of money under the mattress. In a manner 00:05:31.490 --> 00:05:35.110 of speaking, almost, yes. It is called the Gold 00:05:35.110 --> 00:05:37.389 and Foreign Exchange Reserve Account, which is 00:05:37.389 --> 00:05:39.990 held at the Reserve Bank. And basically there 00:05:39.990 --> 00:05:42.050 are surpluses that build up in that account. 00:05:42.170 --> 00:05:46.329 And last year, the minister drew money from that 00:05:46.329 --> 00:05:50.829 account to pay off on debt. Where does that money 00:05:50.829 --> 00:05:53.850 come from? Well, when the RAND depreciates against 00:05:53.850 --> 00:05:56.129 foreign currencies, it generates a surplus on 00:05:56.129 --> 00:05:58.529 the reserves that the Reserve Bank are holding. 00:05:59.069 --> 00:06:01.790 And the question then is, to whom does that surplus 00:06:01.790 --> 00:06:05.029 belong? Does it belong to the Reserve Bank or 00:06:05.029 --> 00:06:06.829 does it belong to the nation? And it's a kind 00:06:06.829 --> 00:06:10.660 of a... iterative process between the two. So 00:06:10.660 --> 00:06:13.480 after last year's experience, what will happen 00:06:13.480 --> 00:06:15.420 this year is in the second half of the year, 00:06:15.540 --> 00:06:18.899 going towards October, the Treasury and the Reserve 00:06:18.899 --> 00:06:20.839 Bank will sit together and they will decide, 00:06:20.959 --> 00:06:24.579 is there a sufficient surplus in the GFRAC account 00:06:24.579 --> 00:06:28.000 that can again be drawn, 10 billion, 20 billion, 00:06:28.079 --> 00:06:30.920 whatever. And then if you draw that money, that'll 00:06:30.920 --> 00:06:34.120 be a bonus. You pay it off on debt and you save 00:06:34.120 --> 00:06:37.899 the interest. Just for context, last year, the 00:06:37.899 --> 00:06:42.740 bank paid over or the government drew 250 billion 00:06:42.740 --> 00:06:45.620 from that account. 100 billion went back to the 00:06:45.620 --> 00:06:48.300 Reserve Bank as equity capital. So you reinforce 00:06:48.300 --> 00:06:51.120 the balance sheet of the Reserve Bank and 150 00:06:51.120 --> 00:06:54.459 billion was used to repay debt. And that's why 00:06:54.459 --> 00:06:55.959 if you look at the numbers, you will see there 00:06:55.959 --> 00:06:58.060 was a sharp decline in interest payments last 00:06:58.060 --> 00:07:01.339 year, precisely because there is this extra money 00:07:01.339 --> 00:07:05.720 that was used to repay debt. There's a huge difference 00:07:05.720 --> 00:07:08.420 between drawing the money to repay debt and drawing 00:07:08.420 --> 00:07:10.959 the money to pay current expenditure. There are 00:07:10.959 --> 00:07:12.800 people who would like the money to be used for 00:07:12.800 --> 00:07:15.060 current expenditure, but that's, of course, a 00:07:15.060 --> 00:07:18.319 crazy idea. A slippery slope. It's a very slippery 00:07:18.319 --> 00:07:22.180 slope. So all, in your perspective, all good 00:07:22.180 --> 00:07:24.800 news up to now, but it's still a long road. There 00:07:24.800 --> 00:07:27.680 are still, what, four voting dates? Yeah, as 00:07:27.680 --> 00:07:30.019 we discussed in our very first note that we did 00:07:30.019 --> 00:07:33.160 on the budget three notes ago, there are four. 00:07:33.660 --> 00:07:36.560 decision -making stages. The first one is the 00:07:36.560 --> 00:07:39.019 approval of the fiscal framework. That is at 00:07:39.019 --> 00:07:41.300 the moment penciled into the parliamentary calendar 00:07:41.300 --> 00:07:45.959 for 11 June, basically the week after next. Then 00:07:45.959 --> 00:07:47.959 the second decision is the division of revenue 00:07:47.959 --> 00:07:52.639 bill that is put down for 25 June when parliament 00:07:52.639 --> 00:07:55.459 has to decide on that. And then the third one 00:07:55.459 --> 00:07:59.300 is the Appropriation Bill, which will start, 00:07:59.379 --> 00:08:02.060 the discussion will start on 27 June. And the 00:08:02.060 --> 00:08:04.399 Appropriation Bill is basically the approval 00:08:04.399 --> 00:08:06.680 of each individual department in government. 00:08:07.420 --> 00:08:10.620 In a jargon, it's called a parliamentary vote. 00:08:11.000 --> 00:08:13.839 All those individual departmental budgets must 00:08:13.839 --> 00:08:16.680 be approved. And then the final approval of the 00:08:16.680 --> 00:08:20.430 Appropriation Bill will be on 23 July. So it's 00:08:20.430 --> 00:08:23.069 about seven, eight weeks from now. And then in 00:08:23.069 --> 00:08:25.569 October, we'll get the medium -term budget policy 00:08:25.569 --> 00:08:29.790 statement. And after that, there will be the 00:08:29.790 --> 00:08:32.070 revenue bills that will be tabled to Parliament. 00:08:32.509 --> 00:08:35.169 So it's basically four decision -making rounds, 00:08:35.309 --> 00:08:37.909 and each one of them is quite important. If one 00:08:37.909 --> 00:08:39.830 of them falls by the wayside, then you don't 00:08:39.830 --> 00:08:42.370 have a budget. You've got to have all four decisions. 00:08:43.009 --> 00:08:45.409 And this is where the party whips come in. They 00:08:45.409 --> 00:08:48.070 have to keep the members in line and make sure 00:08:48.070 --> 00:08:51.559 that people vote. according to the party's position. 00:08:51.879 --> 00:08:53.879 Now, so far, the parties, the main parties in 00:08:53.879 --> 00:08:57.440 Parliament, all support the budget. MK and EFF 00:08:57.440 --> 00:09:00.700 is against it, and EFF is taking the increase 00:09:00.700 --> 00:09:03.220 in the fuel levies to the High Court. We will 00:09:03.220 --> 00:09:06.779 have to see what the court decides on that. So, 00:09:06.820 --> 00:09:11.159 the second half of the newsletter, post the White 00:09:11.159 --> 00:09:14.700 House meeting that had us all glued to our screens, 00:09:14.980 --> 00:09:18.399 when the dust has settled, it's really about 00:09:18.399 --> 00:09:21.620 trade. Where are we on that? That's where I want 00:09:21.620 --> 00:09:23.899 to focus. I think, you know, millions of people 00:09:23.899 --> 00:09:26.419 have got trillions of opinions on the theater 00:09:26.419 --> 00:09:29.399 and the theatrics around it, be that as it may. 00:09:29.679 --> 00:09:31.860 I think the important point for us is trade. 00:09:32.039 --> 00:09:35.259 So let me first summarize where we are now. First 00:09:35.259 --> 00:09:39.399 of all, Agawa is dead. That's quite clear. Trump's 00:09:39.399 --> 00:09:42.639 general 10 % import levy that he's imposed against 00:09:42.639 --> 00:09:45.600 the whole world, not just against AGOA members, 00:09:46.080 --> 00:09:49.240 drove a stake through the AGOA agreement. So 00:09:49.240 --> 00:09:51.679 that one is dead. And people must, I've said 00:09:51.679 --> 00:09:54.080 it before, people must just forget about it. 00:09:54.419 --> 00:09:59.200 It's not going to be around. Then Trump has also 00:09:59.200 --> 00:10:02.879 threatened to impose 31 % reciprocal tariffs 00:10:02.879 --> 00:10:08.940 on many countries also on South Africa. It's 00:10:08.940 --> 00:10:11.039 important those tariffs, as you know, have been 00:10:11.039 --> 00:10:13.440 suspended until 9 July and we will have to see 00:10:13.440 --> 00:10:16.100 whether he brings them back or not. It's important 00:10:16.100 --> 00:10:19.039 to note that half of South Africa's exports to 00:10:19.039 --> 00:10:22.679 the US have not been tariffed because it consists 00:10:22.679 --> 00:10:25.879 of minerals, various mineral products that the 00:10:25.879 --> 00:10:28.799 US is keen to have and Trump has therefore exempted 00:10:28.799 --> 00:10:32.480 those minerals from tariffs. So there's a general 00:10:32.480 --> 00:10:35.539 10 % on everything, but not on minerals. Minerals 00:10:35.539 --> 00:10:39.559 have been exempted. And then there is a 25 % 00:10:39.559 --> 00:10:44.080 tariff on steel, aluminium, automobiles, motorcars, 00:10:44.080 --> 00:10:47.759 and also automobile spare parts, which are used 00:10:47.759 --> 00:10:51.779 in the US to assemble motorcars there. What will 00:10:51.779 --> 00:10:56.610 happen on the 25 % we don't know. We've started 00:10:56.610 --> 00:10:59.629 writing this note. Trump has, in fact, doubled 00:10:59.629 --> 00:11:03.029 down and increased the steel tariffs to 50%. 00:11:03.029 --> 00:11:06.769 So we'll have to see how that turns out. So in 00:11:06.769 --> 00:11:10.649 summary, half the exports are not tariffed. The 00:11:10.649 --> 00:11:14.730 rest is subject to 10%. But steel, aluminium 00:11:14.730 --> 00:11:17.970 and motor cars are subject to 25 % and steel 00:11:17.970 --> 00:11:21.269 now apparently to 50%. So that's where we stand. 00:11:22.610 --> 00:11:25.730 What has South Africa put on the table? Well, 00:11:25.809 --> 00:11:29.289 the details of the South African proposal have 00:11:29.289 --> 00:11:32.169 not been made public yet, but thanks to Reuters, 00:11:32.389 --> 00:11:37.470 some of the details have come out. And South 00:11:37.470 --> 00:11:40.509 Africa is basically offered to buy liquefied 00:11:40.509 --> 00:11:44.169 natural gas, LNG, from the United States for 00:11:44.169 --> 00:11:47.549 a period of 10 years at a rate of between 75 00:11:47.549 --> 00:11:50.950 and 100 million cubic meters per annum. Now, 00:11:51.029 --> 00:11:55.259 as listeners will know, South Africa is facing 00:11:55.259 --> 00:11:59.480 a gas cliff by 28, 29 when gas from Mozambique 00:11:59.480 --> 00:12:02.100 will run out and we'll have to find other gas 00:12:02.100 --> 00:12:05.740 sources to satisfy internal demand. So buying 00:12:05.740 --> 00:12:11.279 LNG from America is not a bad idea. And that's 00:12:11.279 --> 00:12:13.539 one of the things that South Africa has put on 00:12:13.539 --> 00:12:16.279 the table. South Africa has also proposed, secondly, 00:12:16.360 --> 00:12:20.580 that 40 ,000 motor vehicles can be exported to 00:12:20.580 --> 00:12:23.559 the U .S. every year duty -free. Now, last year, 00:12:23.580 --> 00:12:26.740 we only exported 20 ,000. So the 40 ,000 is quite 00:12:26.740 --> 00:12:31.500 a generous claim, if I can put it that way. Again, 00:12:31.679 --> 00:12:33.179 we'll have to see whether that's acceptable. 00:12:33.539 --> 00:12:39.200 And thirdly, on steel, we have proposed that 00:12:39.200 --> 00:12:44.120 385 million kilograms of steel and 132 million 00:12:44.120 --> 00:12:47.419 kilograms of aluminium can be exported duty -free 00:12:47.419 --> 00:12:50.100 to the US every year. Those are the free... very 00:12:50.100 --> 00:12:53.259 tangible things that Reuters have picked up. 00:12:53.899 --> 00:12:57.279 Now, whether that's acceptable to the Americans, 00:12:57.399 --> 00:12:59.460 we'll have to see. I think one must look at the 00:12:59.460 --> 00:13:02.279 negotiating position. America clearly wants some 00:13:02.279 --> 00:13:04.120 of our minerals. They also want the American 00:13:04.120 --> 00:13:07.679 companies to be involved in gas exploration in 00:13:07.679 --> 00:13:10.259 South Africa, which we're undertaking. They also 00:13:10.259 --> 00:13:13.559 would like to sell gas to us. On the other hand, 00:13:13.559 --> 00:13:16.610 we would like to sell... motor car parts to them 00:13:16.610 --> 00:13:18.629 and automotive parts and we would like to sell 00:13:18.629 --> 00:13:21.309 steel and aluminium. So they want access here, 00:13:21.450 --> 00:13:24.450 we want access there. We'll have to see whether 00:13:24.450 --> 00:13:29.090 these two things, these two sets of demands can 00:13:29.090 --> 00:13:31.710 be turned into an agreement. And that really 00:13:31.710 --> 00:13:33.830 is perhaps the most important comment on a White 00:13:33.830 --> 00:13:36.669 House meeting. The proof of the pudding is in 00:13:36.669 --> 00:13:40.190 the eating. And if the meeting in the White House 00:13:40.190 --> 00:13:42.889 can help to keep These have African proposal 00:13:42.889 --> 00:13:46.090 on the table and at the front of the queue. And 00:13:46.090 --> 00:13:48.450 we can negotiate it quicker than what we otherwise 00:13:48.450 --> 00:13:51.490 would have had negotiated it. That would be a 00:13:51.490 --> 00:13:54.549 very clear win. Trump himself has said that the 00:13:54.549 --> 00:13:57.710 United States cannot negotiate all these agreements. 00:13:58.090 --> 00:14:00.190 They just don't have the people and the time. 00:14:00.350 --> 00:14:01.250 They just don't have the people and the capacity. 00:14:01.730 --> 00:14:04.190 You're talking about something like 90 countries, 00:14:04.350 --> 00:14:07.779 9 -0. that have indicated that they want to negotiate 00:14:07.779 --> 00:14:10.539 with the US. Now, obviously, you would much rather 00:14:10.539 --> 00:14:14.059 be country number 10 than country number 90 or 00:14:14.059 --> 00:14:16.740 country number 80. And if the White House meeting 00:14:16.740 --> 00:14:19.679 helped to achieve that, then I think it would 00:14:19.679 --> 00:14:24.720 have been a clear win. What about Starlink? Starlink 00:14:24.720 --> 00:14:29.500 is about a lot of dust and noise. The principle 00:14:29.500 --> 00:14:38.100 is very simple. BBBE Act, Broad -Based Black 00:14:38.100 --> 00:14:42.019 Economic Empowerment Act of 2003, there's a very 00:14:42.019 --> 00:14:46.419 clear stipulation that an equity ownership requirement 00:14:46.419 --> 00:14:50.639 can be replaced by what is called equity alternative 00:14:50.639 --> 00:14:53.539 investments. And there are several big American 00:14:53.539 --> 00:14:55.860 and global companies operating in South Africa 00:14:55.860 --> 00:14:58.480 who've made use of this. For example, Citibank, 00:14:58.539 --> 00:15:01.980 I think Amazon and so on. So what those companies 00:15:01.980 --> 00:15:04.559 are saying is we can't give away or we can't 00:15:04.559 --> 00:15:08.639 do a deal around equity in our South African 00:15:08.639 --> 00:15:11.379 subsidiary, but we're happy to do more for training 00:15:11.379 --> 00:15:13.879 or more for people development or more for enterprise 00:15:13.879 --> 00:15:16.259 development. There we will do more than what 00:15:16.259 --> 00:15:19.500 is required in the various scorecards and those 00:15:19.500 --> 00:15:22.899 equity equivalents then make up. for the equity 00:15:22.899 --> 00:15:26.080 component so that is not a new principle it's 00:15:26.080 --> 00:15:29.759 it's an act it's also in the be each other for 00:15:29.759 --> 00:15:33.200 the ict sector so what is in what is this fight 00:15:33.200 --> 00:15:35.759 then about this fight is because in the electronic 00:15:35.759 --> 00:15:39.080 communications act there's a specific requirement 00:15:39.080 --> 00:15:42.759 that before a license can be issued under the 00:15:43.230 --> 00:15:46.870 act there must be a 30 ownership component now 00:15:46.870 --> 00:15:50.450 that is what the act currently says the minister 00:15:50.450 --> 00:15:54.429 has now issued a government gazette to say that 00:15:54.429 --> 00:15:57.309 that can be changed by way of regulations that 00:15:57.309 --> 00:16:00.690 is very dubious because if it's an act it's an 00:16:00.690 --> 00:16:02.809 act and if you want to change it you will have 00:16:02.809 --> 00:16:04.610 to change the act and that's a lengthy process 00:16:04.610 --> 00:16:07.809 it can take a couple of months to do that he's 00:16:07.809 --> 00:16:09.769 trying to take a shortcut by saying that the 00:16:09.769 --> 00:16:13.529 regulator icasa can take a decision around that 00:16:13.529 --> 00:16:15.629 by way of regulations. And that's what the debate 00:16:15.629 --> 00:16:18.169 is about. I suspect in the end it will have to 00:16:18.169 --> 00:16:22.509 be determined by a court ruling. But it's certainly 00:16:22.509 --> 00:16:24.750 not a new principle. It is something that has 00:16:24.750 --> 00:16:27.190 been used in South Africa, and there's no reason 00:16:27.190 --> 00:16:29.870 why it cannot be used again. Who will take it 00:16:29.870 --> 00:16:34.809 to court? Well, anybody who's unhappy. You know, 00:16:34.870 --> 00:16:38.750 anybody who's unhappy can take it to court. I 00:16:38.750 --> 00:16:40.950 just want to point out, people are focused on 00:16:40.950 --> 00:16:43.490 Starlink, but there are other operators in the 00:16:43.490 --> 00:16:48.970 world who also operate LEO's low -Earth orbit 00:16:48.970 --> 00:16:53.389 satellites. CAPER, for example, which is the 00:16:53.389 --> 00:16:55.330 name of some galaxy somewhere in the universe, 00:16:55.529 --> 00:16:59.690 is a project run by Amazon. Amazon has started 00:16:59.690 --> 00:17:03.429 launching satellites to introduce Project CAPER 00:17:03.429 --> 00:17:07.039 to do exactly the same thing as Starlink. Eurotel 00:17:07.039 --> 00:17:09.420 is doing the same thing in Europe, exactly the 00:17:09.420 --> 00:17:14.960 same story. They're talking to MTN. Vodacom is 00:17:14.960 --> 00:17:18.900 talking to Project Caper. So there are other 00:17:18.900 --> 00:17:20.759 alternatives. There are also alternatives in 00:17:20.759 --> 00:17:25.579 China. So Starlink is not the only game in town. 00:17:25.839 --> 00:17:28.319 But these other companies, should they want to 00:17:28.319 --> 00:17:30.599 come in, they would also have to meet the 30 00:17:30.599 --> 00:17:33.619 % requirement. So this exemption can apply to 00:17:33.619 --> 00:17:36.819 more than just Starlink. In summary, so what? 00:17:37.480 --> 00:17:40.440 Well, I think, first of all, the drama that we 00:17:40.440 --> 00:17:43.420 had around budget when Parliament flexed its 00:17:43.420 --> 00:17:46.299 muscles and the budget first couldn't be tabled 00:17:46.299 --> 00:17:48.720 and then the increase in the VAT rate couldn't 00:17:48.720 --> 00:17:51.259 go through and so on, that is now behind us. 00:17:51.299 --> 00:17:54.140 And I think the bottom line is that the central 00:17:54.140 --> 00:17:57.779 focus of debt stabilisation and debt consolidation 00:17:57.779 --> 00:18:01.950 has not been lost. There's a clear political 00:18:01.950 --> 00:18:05.089 focus on that. There's a clear political will 00:18:05.089 --> 00:18:09.049 to bring that down. The increase that we've seen 00:18:09.049 --> 00:18:12.210 in the percentage is because the GDP growth is 00:18:12.210 --> 00:18:14.230 lower, not because there's more expenditure. 00:18:14.470 --> 00:18:17.670 So I think that's a plus. The centre is holding 00:18:17.670 --> 00:18:20.089 around the budget. There's a kind of a fiscal 00:18:20.089 --> 00:18:23.930 conservatism or a fiscal middle -of -the -roadism, 00:18:24.009 --> 00:18:27.250 which I think is to be welcomed. That's a very 00:18:27.250 --> 00:18:32.390 important so what. And I think, secondly, the 00:18:32.390 --> 00:18:35.289 mere fact that the budget in South Africa, after 00:18:35.289 --> 00:18:39.029 the shaky start, has taken this way, stands in 00:18:39.029 --> 00:18:42.049 very sharp contrast to the way the US is now 00:18:42.049 --> 00:18:44.950 finalizing their budget. It went through the 00:18:44.950 --> 00:18:47.789 House of Congress last week. So you've got a 00:18:47.789 --> 00:18:50.869 clear comparison. If you look at how that budget 00:18:50.869 --> 00:18:53.450 is just exploding in terms of deficit and more 00:18:53.450 --> 00:18:56.569 debt, and you look at how the South African budget 00:18:56.569 --> 00:19:00.259 is being... controlled or managed down by way 00:19:00.259 --> 00:19:02.579 of discipline, it's an interesting contrast to 00:19:02.579 --> 00:19:06.059 take note of. And then South Africa, I think 00:19:06.059 --> 00:19:07.940 the third show what it does, that South Africa 00:19:07.940 --> 00:19:11.220 now has tabled the proposal. We must now see 00:19:11.220 --> 00:19:13.779 how the US reacts to it. Now, when the US will 00:19:13.779 --> 00:19:15.720 pay attention to it, when there will be serious 00:19:15.720 --> 00:19:18.640 negotiations, that is up in the air, we don't 00:19:18.640 --> 00:19:21.640 know. But at least there's a proposal on the 00:19:21.640 --> 00:19:24.240 table and hopefully that will help to stabilize 00:19:24.240 --> 00:19:26.440 the trade relationship between the two countries. 00:19:28.299 --> 00:19:31.599 What's the Chinese curse? May we live in interesting 00:19:31.599 --> 00:19:36.019 times. I hope it becomes boring soon. Absolutely. 00:19:36.339 --> 00:19:42.059 Thank you very much. Thank you. Thank you for 00:19:42.059 --> 00:19:44.720 listening to the So What Podcast. If you enjoy 00:19:44.720 --> 00:19:47.400 this content, please don't forget to leave a 00:19:47.400 --> 00:19:50.240 review and a rating, and please consider subscribing 00:19:50.240 --> 00:19:53.460 so you don't miss any future episodes. Also, 00:19:53.559 --> 00:19:56.579 tell your friends. Remember, you can find a written 00:19:56.579 --> 00:20:00.480 version of all JP's content at jplandman .co 00:20:00.480 --> 00:20:01.160 .za.