Tim Modise: Sizing up taxi rules, economy with SMME Forum’s Tebogo Khaas. LISTEN!

People have got to work and they’ve got to balance the interests between protecting their lives and their livelihoods. One person who is knowledgeable about these matters and has got strong opinions is Mr Tebogo Khaas, who is the founder of the SMME Forum. He also goes by asymptomatic Covid-19 as his Twitter handle. Khaas assesses the rules, with broadcaster Tim Modise – whose work is published under the SA Renewal banner on BizNews.com.

Tim Modise: The taxi industry standoff with the government has once again highlighted the tensions that exist between the business interests of the country as well as the employment situation and the restrictions imposed on the economy by the government. This, as we’ve seen, has led to the industry saying that they are now going to load to full capacity, 100%, instead of the 70% that they had agreed to with the Department of Transport some months ago. This has led to new fears that this is going to exacerbate the transmission of Covid-19 throughout the nation. 

People have got to work and they’ve got to balance the interests between protecting their lives and their livelihoods. One person who is knowledgeable about these matters and has got strong opinions is Mr Tebogo Khaas, who is the founder of the SMME Forum. He also goes by asymptomatic Covid-19 as his Twitter handle. Mr Khaas, thank you very much for joining me. Why asymptomatic Covid-19 twitter handle?

Tebogo Khaas: The reason I assumed that handle, asymptomatic Covid-19, is to propagate the awareness that I might not present with symptoms of having been infected with the coronavirus, might be a carrier, I might unknowingly be positive. I might then expose others to the disease.

I always assumed that the next person is Covid-19 positive and therefore I would expect them to take measures as I would, to ensure that we keep each other and those around us safe. It is a very difficult period that you’re living in, but as long as we always keep it in our consciousness that we might be carriers of the dreaded disease.

That is the awareness that I’m hoping for among the communities at large. If you look at where you come from or the townships and so forth, you can see the cavalier manner in which people go about their business. I am appalled to see people walking around that island with no mouth coverings or any official mask on themselves.

It is a worrisome situation because we do not know who’s next and we do not have a cure for this disease. To address the question about the taxi industry position to revert to 100% passenger loads, I must at the outset stated that I sympathise deeply with the taxi industry.

Not only the taxi industry, just as I would with any other industry, especially the small business sector. The hardship that everybody is enduring since the lockdown began. It baffles my mind, what is their rationale behind in the 70% load factor? I do not believe that if you reduce from loading 10 people and loading seven people, it makes it much safer in a taxi.

That five people or three people in a taxi are not capable of transmitting the disease. Then again, I suppose we have to do a balancing act in terms of whether we are going to close up the economy and make sure that people don’t travel at all, or we do it with minimising the risk.

Having imposed a 70% restriction, there ought to be some mitigating factors that have been put in place by the government to ensure that the hardship that would be endured by the taxi industries, who are being called upon to provide transportation for essential services, workers without really making the revenue that they are used to.

It would have been easier if the taxi industry was formalised in one form or the other. As we speak today, I’m unsure if the government knows exactly the number of people who own taxis, who operate to taxis and who work in the industry. It might very well be that some people do contribute to the unemployment insurance fund, but I do not think most operators or employers or employees within the taxi industry themselves contributed to the UIF benefits.

As we have seen, some companies have been exposed as they were approaching the UIF authorities to try and lodge claims for their employees, that they were not contributing at all. It creates a situation where you’re opening yourself to potential knock on your door by the authorities and Sars. If you have been outside of the tax radar, it becomes difficult for any employer or entrepreneur to go there if you know that you a complaint.

What the taxi industries did yesterday or today by unilaterally breaking their laws, shows the kind of scams that the industry has on the laws of this country. We can only hope that other subsectors of the economy, such as the liquor traders and so forth, did not follow in the same footsteps as the taxi industry. Can you imagine if the taverns and bottle stores start breaking the laws and say, we are also going to sell alcohol if the taxi industry can break the laws, what is stopping us?

There will be chaos and it’s becoming more and more of a reality. The point is, should the government be using force to try and enforce compliance or are there other mechanisms that can be pursued? It’s a difficult position for the government to find itself in. It is also a difficult position for the taxi industry, where it is aspected to provide a service at half its capacity.

When you talk about the hardship that the restrictions have imposed on the taxi industry, it reminds me of other sectors or other industries. Tourism, for instance, it is still under serious restrictions. The tobacco industry has also experienced the severest of the restrictions they’ve taken the locked down restrictions to the courts as we speak. There’s been talk that the illicit tobacco trade is doing very well in South Africa under these conditions. What is your comment regarding how some of these restrictions were imposed and forced?

While I want to cut government ministries some slack and say they’ve got their heart in the right place, I think the restrictions are all nonsensical in many respects. For example the alcohol/tobacco regulations. Other than Botswana which has just lifted the ban recently there is no other country in the whole world where such a ban was ever enacted.

If it was indeed true that banning cigarettes and alcohol was a factor in fighting the spread of the pandemic, we wouldn’t be ranking up with the highest countries with infections. I saw some something over the weekend, we were number eight or in the top 20 for all the wrong reasons, amongst countries who do not even have alcohol and cigarettes ban.

The flip side of that coin is you now encourage criminality. We live in a country that is battling high crime rates and taking otherwise law-abiding citizen, which happened to smokers and turning them into criminals, it just doesn’t make sense. We have seen reports that over the period of the lockdown, the local economy was deprived of about R3.5 billion in taxes, yet we go to IMF and other entities begging for funding.

That is money that could have easily been used to stymie the hardship that the economy is enduring. The same applies to the alcohol, which now creates avenues for bootlegging and depriving the fiscals of tax revenue, not as much as it does with cigarettes. We are encouraged by the fact that the big players, be the SA Brewery or the BAT companies and so forth, they seem to be responsible corporate citizens.

This type of responsibility doesn’t seem to be replicated in other sectors, such as the taxi industry. It is fortunate that most the people who utilise the minibus taxis, people who are poor, vulnerable, or workers who depend on their endings day to day to make a livelihood.

Those are the people that unfortunately, when they get infected or contracted coronavirus, that most likely going to pass it on to whoever it is that they interact within the mainstream economy. You can imagine what the unintended consequences of such greed from the taxi industries may very well be. It is very sad that on the one hand, you might want to empathise with the industry, but at the same time, is it worth risking the lives of ordinary workers, poor people, vulnerable people because of the current situation in which everybody’s suffering.

taxi
A minibus taxi drives through the Randburg taxi rank in Johannesburg, South Africa, on Thursday, May 14, 2020. South Africa’s government announced plans to further ease a nationwide lockdown as the fallout from shuttering much of the economy threatens to outweigh the damage wrought by the coronavirus. Photographer: Waldo Swiegers/Bloomberg

Talking about the economy, the Minister of Finance Tito Mboweni recently spoke about the difficulties that we face as a nation and said that the economy was going to contract and we may need to go and borrow from the multilateral institutions. That the budget may be constrained by more than R300 billion, for that matter, in the process. One wonders what is going to happen then when the growth is gone, and the jobs are going over 80,000 during the lockdown, people have been retrenched. What do you think is going to happen to the economy or is happening now and how do we get out of this situation where jobs are being lost, businesses are closing down and the fiscus is losing the revenues, as you mentioned earlier?

I’m sure we are all alive to the fact that even before coronavirus became a lexicon in our own public discourse. Some of us didn’t even about the existence of Corona before, the only Corona we knew was a beer. Be that as it may, we knew that our economy was already battling.

The so-called nine and some argue 26 years of ANC rule, was just a disaster. Our economy was facing a high unemployment rate, GDP, was hovering below 2% if not below 1% depending on who you chat with. With this happening now, it is projected that in the next financial year, the economy will contract by about 8%.

Is a dire situation. If you had to do extrapolation, the unemployment rate will be sitting at more than 40%.

Even an arduous task that any nation would be faced with and it is even much more so if you give in the fact that our own government doesn’t have the fiscal play, to be able to rearrange or move about funds from one area allocated to another area because we don’t have the taxpayers, it has shrunk.

Even those with a larger tax base, if you take the US, as much as they we’re able to issue those tax cheques. Now they’re relooking, and they can not do another round, so they’re forced to open the economy. In our instances, it is much dire, because our economies industrial and manufacturing base has been whittled down over the years.

We import more than we export, we are a net importer. A result is, its going to take a whole lot of reengineering the economy to make sure that the basics are done and they are done well. To be able to even begin with that, there are some fundamental issues that need to be tackled. For example, there should be a restructuring of the economy and that will require a lot of difficult but necessary decisions. First of all, the public wage bill has to be cut.

We cannot sustain the kind of public wage bill that we endure, we have to make sure that our interest repayments on our loans are also in check. Which is why I think the budget Mr. Mboweni had announced, a zero-based budgeting methodology, could very well be helpful.

To the extent that we’ve got a lot of venal characters within the system, corruption is everywhere worldwide but we seem to be excelling in that. We are going to find it very difficult for people to really be realistic and say, yes, this line item we really don’t need it.

It means that those who are dependent on the public purse to advance their political agendas might find it difficult to continue in the same vein as they had been used to. It is a good thing, but whether its practically it’s going to happen is another thing, because it requires diligence, it requires commitments, it requires forthrightness on the part of those who are tasked with managing the public purse.

I doubt we are at the stage where people would really be able to look beyond their selfish or narrow interests and the interests of the country. If we don’t do anything, we are doomed as a nation. What I also liked about what Minister Mboweni announced was to refocus, I think this was directed to big business, especially in the leisure industry. Where he said he doesn’t see why restaurants and leisure industry would be employing 100% foreigners in some instances. if you go back 6 years, you would find that out of the 10 people who were employed in any establishment, you’d find at eight, at least in South Africa.

If you don’t create a sense where there’s hope for the local populace, your just asking for civil war. We hope this pendant being will ignite the tinderbox that has been set for all these years. This is a perfect moment to go back as government and make sure that they implement the kind of thinking that we’ve seen coming out.

It’s not going to be easy because we’ve got a vested interest, if you will have seen some documents circulating recently, at the instances of the ANC, the deputy secretary-general in his appointments to the boards to the SOEs and so forth, all the be vetted and appealed.

It means you’re not going to get necessarily the best people for the job because you’re going to find that patronage and political influence is still going to direct as to who are the individuals who ultimately become appointed for those key positions in the public sector. We’ll be going back to the same clawing pot.

Incidentally, as we are trying to establish this connection, I was in a conversation with a very close friend of mine who was also in the laser industry, who indicates that out of an abundance of caution he decided to pull out of the NAEE because he doesn’t see the industry recovering, not even to the 50% the industry that they were accustomed to. That tells you a lot, there’s going to be a need to cut down on the number of employees in that space.

Even if they say the lockdown is over, we are back at level zero next month, nobody will be rushing to the casinos which contain confined spaces. The economy is going to take a long while and long painful decisions need to be are to be taken before we can even begin to think we are clawing back some of the losses that we’ve otherwise endured.

Tell me anecdotally, what are some of your members or friends in the business community telling you about their experiences, what is happening? You’ve mentioned one who says he’s pulling out of the leisure industry, but what’s happening in the real economy anecdotally, are people seeing opportunities or creating new opportunities or are people despondent and just closing shop?

The one thing that I’ve realised is since the beginning of this surge, it has taken a toll. I know I felt the strain myself, on almost a daily basis. These days it is becoming better but on almost a daily basis, I’ll be fielding calls from entrepreneurs, some running businesses.

Others that have the potential to grow, to be sustainable and keep employing people that are about to give up because either they are not being paid on time or either some of the major customers are just playing fast and loose. The stress is palpable in the sector, especially for all entrepreneurs.

What I have also been observed are the frustrations where you’d find the likes of the UIF benefits system, not being helpful at all. You must have picked up in the mainstream media recently of the kind of fraud and corruption that has been going on. People creating pseudo companies to channel funds that they’re not entitled to, to benefit themselves.

It is sad, that people don’t realise that their little action or actions, no matter how isolated they may be, they’ve got the potential to break companies, to break families and their livelihoods. That, in turn, is not good for the social economy contract that you all have signed up to.

We’ve got people who are committed to doing their bit, in terms of saving the country whatever capacity, as a cashier, as a security guard or as a delivery person, and you’ve got the level of crime that is also creeping in. Unfortunately, we do not see any tangible action even by those tasked with the responsibility of ensuring this compliance, doing much about it.

Taxi industry
Unlevel Three (Taxi industry). More of Zapiro’s magic available at www.zapiro.com.

Instead, it is their citizen who seems to be law-abiding who seem to be made examples of. It’s going to take a while and once all of this is happening, if you look at the US, for example, sins for the past three months. I saw a report yesterday, there were about 4,000 companies that have already applied for liquidation.

What does that mean if these bigger companies with some sort of financial inclusion can now bailout? What about the small companies who may be limited in terms of their reserves. What about those who those mostly depend on the public sector?

They’re just going to find it difficult to even continue but hadn’t painted such a dire picture, which is the reality of the situation, I am rather hopeful because I do know there are projects which are independently driven from the presidency, which seek to address some of the economic implications imposed by their coronavirus pandemic.

For example, one of the projects I have been looking at, the ITC space, seeking to employ about 10,000 unemployed black graduates. Certainly, that will go a long way towards creating some employment opportunities, even though it may not be financially as rewarding as otherwise, it could be good enough. Others in the agricultural sector, some in the mining sector. You’ve got all these projects that are shovel ready, which have got allocated funding. We can only see that offers a glimmer of hope to those people who still can be able to offer something to the economy as we seek to rebuild it.

Mr Tebogo Khaas, the founder of the SMME forum. He goes under the handle on Twitter @tebogokhaas, asymptomatic nCovid19. Thanks very much for talking to me and sharing with me your thoughts on what is developing in the economic space of South Africa. I appreciate it.

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