A Grateful Panther

Three Things to Make National Anthem Ring Truer

 1. Outlaw door-to-door religious proselytism. Freedom of religion includes freedom not be regularly harassed by groups of people of varying size trying to convert you. Religious belief should essentially be a private matter and a good indication of the absence of any hidden agendas is religious groups growing at roughly the same rate. This hasn’t been the case. Plus a citizen should not be allowed to change her religion before she’s 21.

2. Freeze foreign real estate speculation. Prices should be determined by local purchasing power of Mauritians, not by those of the wealthiest foreigners. Especially when we have a serious housing problem in the republic. We can add banning deproclamation of public beaches here.

3. Recall elections and a couple of other tools so we can get rid of lousy MPs between general elections and toxic policies before they hurt our country. This will keep politicians on their toes, improving governance.

How It’s Like When a Journalist Does His Homework

Bug Kin Eklat Depo Minisyon Pe Dir Mank Lapud Dan Fizi

Tan sa inpe. Pa komik sa? Inpe pli lwin li dir bizin fer kitsoz fuka. Be pa sa mem lin fer a partir 2006?

Reds Back on Their Perch After 30 Years

Boy, does this feel good! And apparently nobody is going to Switzerland. 

YNWA

Toxic Bean-Counter Says Hike of Top Tax Rates Won’t Work

People, he said, will just engage in more tax-planning or take part of the salary in stuff like a passage benefit. At the same he asked the Minister of Finance to make a u-turn because the flat tax has been a fundamental element of our success during the last fourteen years.

Well if it won’t work it’s kind of useless to ask Minister Padayachy to reconsider this policy decision. Plus passage and other benefits may be made taxable. Besides we can do a little research on how Sweden and other countries collect revenue with tax rates as high as 70% (we might look at our own history too as they were that high at one point in time). For sure I don’t see how two of his colleagues will spend a cute sum of money on air travel especially after Covid-19.

As for the success of his tax reforms he can start by answering two questions. 1. In how many years since 2006 did we get the promised 8% growth (he can tell us about 7% and 6% rates too); and 2. What has been the total impact if any of not reaching that target in terms of GDP and government revenue shortfall? 

Why New York is America’s Covid-19 Epicentre

Mauritius Should Showcase the Sithanen Flat Tax Hell

We should make sure all 50-odd African countries are in attendance along with two university buddies. Then bring up the above table on the screen while a fresh round of gato-pima is served. And explain that by the end of last year Mauritius had about Rs1,800 billion of GDP missing compared to what the 8% growth the flat tax was supposed to generate – that’s 36 times how much GDP is roughly expected to fall this year from where it was at the end of 2019. If we assume a very conservative 20% cut for government revenue and the monies are left in a drawer (they are not reinvested) then there is more than Rs350bn of government revenue missing. This could have been placed in a sovereign wealth fund (SWF) that would have easily got us over the bump in the road that the pandemic is now creating. 

But we should have increased the share of government revenue to the OECD average of 35% as our population has been aging since 2005, to improve our welfare state and to bring back retirement age to 55 years so we mitigate our serious brain-drain problem. This would have boosted the SWF to Rs623bn. Even if we had grown at 6.5% over the past fourteen years there would have been between 195bn to 342bn rupees available to prepare us for any tough situation. Why is 5% in the table? It’s our average growth for the fourteen years – a period of progressive and sustainable taxation – before Sithanen started screwing up the economy and Mauritius big time. So even in this worst case scenario there would have been Rs58bn-Rs101bn of extra government revenue available for a bad year like 2020. Without compromising the independence of the BoM, destroying our savings culture and sending our rupee into a tailspin. 

Minister Padayachy has increased personal top tax rates to 40%. He had little choice. We don’t want to have a massive social crisis. 

Savings Likely to Hit At Least 60-year Low

It was there already in 2018 when it matched the 9% it reached after intense cyclone Danielle inflicted a 17.6% contraction to the Mauritian economy. As the table shows savings increased by a tiny bit last year but not enough to avoid the top three worst spots before COVID-19 arrived on the scene. We must also note that SSR is the only Prime Minister to have his two entries in the table linked to two intense cyclones. The other three PMs appear there because of two things. The first is the Sithanen flat tax which has broken the economy. The other is the removal of the tax exemptions which the people of Mauritius had been using to set up their long-term financial plans. 

The situation for Pravind Jugnauth is pretty worrying as all his three years as PM are very bad years for this fundamental statistic of economic resilience. Given that the figure for this year will likely go at the top of the table he should bring back some basic common sense by restoring a sustainable and progressive tax structure and personal deductions. This should start compensating for his extremely poor economic management of the past five years. 

African Countries With the Worst Covid-19 Death Intensity

 

As shown in the above table Mayotte is the African territory with the highest number of covid-19 deaths per capita and that too by a large margin. Its figure for cases per million people was even higher than that for Spain on May 13. This is pretty bad given that it had only 6 cases on March 20. A weak health system is part of the reason. Not unlike in France where thousands of beds have been eliminated in hospitals during the last two decades.

Mauritius is at number four. We wasted precious time in the beginning when politicians were blurting out a lot of dangerous rubbish. We’ve seen how fundamental a good universal public health system is. We need to seriously upgrade ours. This involves a course correction. 

Why Our Government Hasn’t Been Functioning Properly

Three words. Sithanen flat tax. As it never produced the higher growth rates (8%) our central government has been piling up so much debt – increasing from a total of Rs106bn to Rs278bn between 2005 and 2018 – that it had to resort to creative accounting, push up the debt ceiling several times and has failed to solve many national problems. The USD has also appreciated by one-third against our rupee over the past 15 years. Not a good sign. Definitely not what you’d expect from a Tiger. But pandemics have such a way of bringing back sanity. 

Covid-19 Crisis Not Unprecedented

Nope. As the chart shows our GDP contracted by 10% in 1980 after cyclone Claudette visited us in the dying days of 1979. The contraction estimated by the Ministry of Finance for this year is between 7% and 11% so it’s going to be roughly the same. What’s going to be different is that since 2005 government has been working for the 1% while 41 years ago important components were being added to our welfare state helping tens of thousands of us have more meaningful lives. 

African Countries With No Covid-19 Deaths

As of yesterday there were a dozen of them. They all had people infected with the virus but so far have registered no fatalities. The infection intensity varies from 0.53 per million people in Lesotho to 522.01 in Réunion Island which is not independent.

Na Pa Tus Konze Travayer

Guvernman pe anvi kup konze travayer a koz covid-19. Fode pa li fer sa parski konfinman se pa en konze me en leksperians difisil kot dimun fin bizin res lakaz pu res an vi. Ena buku zafer li kav fer a la plas:

1. En konpayni pa gayn drwa diman kudme ek guvernman si li pan kup so dividen ek kup depans fla fla. Bizin usi kone komye fwa la pey ek benefis so CEO pli for ki travayer ek pli ti lapey. Ban aksyoner kav reinvesti dan zot konpayni pu kumanse.

2. En konpayni pa gayn drwa met dimun deor brit si li ena rezerv uswa fin fer profi u fin pey ban dividen egzazere ban dernye lane. Li bizin pa gayn drwa met travayer deor apre rod travayer pli bon marse depi lot pei.

3. Guvernman bizin introdwir en wealth tax ek remet taksasyon progresif.

4. Si bizin kup lapey u lavantaz ban travayer bizin fer li de fason progresif. Dimun ki gayn ziska 30,000 par mwa pa gayn kupe e dimun ki gayn 500,000 par mwa u plis kup ant 50% ek 75%.

5. Kansel tu privilez duti-fri pu loto pu prosen sink an.

6. Obliz tablisman plant manze lor zot later ek friz tu proze IRS/RES/PDS.

7. Friz dezyem faz tram ekspres ek pran kas ka don CEB pu li investi masivman dan soler/eolyen pu ki pri kuran vin byin pre a zero.

8. Remet laz retret 60 an kumsa kav angaz plis zen. 

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. 

Top 10 Worst Covid-19 Death Intensity in Africa

State Should Tighten Leaky Confinement Fast

Because we’ve wasted precious time, our public health system isn’t where it ought to have been – there are also several reports of frontline staff working in difficult conditions – and the virus is spreading at quite a rapid pace. The state should compensate for some of the blunders it made by having a free pack sent to the other 346,500 or so households so everybody has something to eat and stays inside for two weeks to slow down the advance of covid-19. The police/SMF/SSU and enough government employees can take care of the packing and distribution to every single household. Gas trucks should follow to exchange any cylinder for one that’s full (this will cost government only Rs80m). Staff should take down comments heard during the distribution so the system is improved quickly and other problems are solved.

How much would a healthy and reasonable pack cost? Given that we’re leaving the lobster thermidor out am guessing Rs1,500 to Rs2,000 should do the trick. So in all we’re talking around Rs850m here. Pretty cheap to help stem the infection and delay or avoid the collapse of our public health system. And this will be financed by more sustainable tax rates. 

Earth And Covid-19

Covid-19 Damage Across Africa Not Uniform

An Open Letter to Minister Dookun-Luchoomun

Dear Minister,

I read with interest on March 17th that your Ministry had made provisions for schooling for grades 7 to 9 to continue online using 994 videos and 70 questionnaires through the student support programme (SSP) should Covid-19 force us to shutdown schools.

As we already have our first three cases of that virus I am guessing the SSP will be extended to the other grades of the secondary curriculum. Considering that there might not be a lot of good news* coming our way for the next little while and that students could be at home for weeks if not months I would like to make an appeal that you allow all the students who didn’t get 5 credits at the SC level recently to go through into Lower 6 – which for now will be their homes – and have access to the relevant parts of the SSP. This will help soften the blow of the pandemic.

Thank you.
Best,
Sanjay Jagatsingh


*What Covid-19 Will Do to Mauritius, S. Jagatsingh, March 2020.