Saturday, April 18, 2020

Padayachy’s Obsession With Doing Business Could Prove to Be Politically Fatal

I mean Sithanen slashed top tax rates to get 8% growth and introduced the Doing Business Index (DB) as some kind of economic holy grail. When we never got the higher growth rates he told us it’s the fault of the Great Recession but they’d be on their way as soon as it ends. That downturn ended almost eleven years ago but still no trace of the 8% growth. In the meantime we’ve been bombarded with useful idiots presenting 3% growth as good. Even if it’s less than half the promised target while the country has been falling apart.

And Padayachy doesn’t talk about the 8% growth required to keep the regressive tax rates at all. He instead shifts our attention to the DB rankings trying to convince us that they are so important that we should aim at a top ten spot – we’re currently at the 13th place – and even a top five position. That would make sense if changes in the DB index were strongly correlated with growth. But as the chart shows they are not. At all. At least for us.

Now that the pandemic is here we’re all seeing how vulnerable the flat tax has made us and how close to bankruptcy our country is. 

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