Will the racing industry feel the pinch

Dennis Dykes – Chief Economist Nedbank

Good Morning South Africa TV2.

He seems to speak a lot but says nothing constructive.
A paradox.
The government says 1.5% growth, Nedbank says 2.5% growth.
The trade unions say another million jobs will be lost by December 2010
The government who has the union as their tri party alliance, says they are going to create jobs.
Pravin Gordon, minister of finance says we are short on collecting taxes by 184bn. Could be as high as R220b. before xmas we heard that we have overspend the budget of R657bn by R120bn.
So this is what is going to happen :
Banks are going belly up as I have indicated 12 months ago.
The Government is bankrupt.
The +840 JSE listed companies are going to post tax losses and carry them forward for 2010,2011,2012.
Transfer duty on property registrations are down and will go down even more as the banks don’t get money from the Reserve Bank to lend out for Home Loans.
Rates and property taxes, water and electricity will go up to bail out Local municipalities.
The government will issue more Government bonds.
Personal tax or vat will have to go up.
For the 8 month period march 2009 until November 2009, R126bn was collected in personal tax.
Divide that by 8, multiply by 12 for the years tax, divide by average 33 (average tax rate), multiply by 100 to get gross salaries paid to employees over the 12 month period, divide by 28 (Eskom as norm, where 28% of turnover is paid to salaries), multiply by 100 to get total company income for the country for 12 months.

Salaries paid to employees are almost the same as the entire budget for the country.
Hence the employees are stronger than the country.
Total company income is about 3 times that of the country budget.
It should be at least 7 times that of the country budget.

racing has been for years