1
00:00:00,080 --> 00:00:05,600
Speaker 1: Welcome John Lewes. John is currently an independent economist, formerly

2
00:00:05,640 --> 00:00:09,080
Speaker 1: of F and B. He's known for he's pragmatic, he's

3
00:00:09,160 --> 00:00:14,360
Speaker 1: data driven approaches to consumer behavior and the property market. Yeah,

4
00:00:14,400 --> 00:00:19,599
Speaker 1: the twenty twenty six economic landscape is interesting. I think

5
00:00:19,920 --> 00:00:22,439
Speaker 1: we're not even talking about temporary relief. We're talking about

6
00:00:22,440 --> 00:00:25,360
Speaker 1: structural reform these days, aren't we. John, welcome, It's good.

7
00:00:25,200 --> 00:00:28,080
Speaker 2: To have you morning. Clarence's good to be here, thank you.

8
00:00:29,240 --> 00:00:31,360
Speaker 1: Yeah. Is it structural reform that is needed? Do we

9
00:00:31,400 --> 00:00:33,080
Speaker 1: go do we go back to the drawing boards?

10
00:00:34,600 --> 00:00:37,920
Speaker 3: Well, you know, when you're talking about dependence exposure to

11
00:00:38,200 --> 00:00:41,960
Speaker 3: fuel price shocks, I think in the longer term to

12
00:00:42,080 --> 00:00:45,000
Speaker 3: prepare to be more have an economy that's perhaps more

13
00:00:45,479 --> 00:00:49,519
Speaker 3: proof from these type of shocks. Yes, it's structural reform.

14
00:00:50,040 --> 00:00:55,080
Speaker 3: It's about creating an economy that's got more growth friendly

15
00:00:55,240 --> 00:00:58,480
Speaker 3: policy that solved a lot of the infrastructure shortages and

16
00:00:58,960 --> 00:01:04,800
Speaker 3: services lacking of services and so on that area of

17
00:01:04,800 --> 00:01:08,360
Speaker 3: the economy. You can get to a level where you're

18
00:01:08,400 --> 00:01:10,720
Speaker 3: growing it's four or five percent, and when you get

19
00:01:10,720 --> 00:01:13,240
Speaker 3: a fuel class shock, you might slow to two or

20
00:01:13,280 --> 00:01:17,040
Speaker 3: three instead of from one to minus something, So that

21
00:01:17,080 --> 00:01:17,640
Speaker 3: can help it.

22
00:01:18,360 --> 00:01:22,000
Speaker 2: Doesn't proof you. It doesn't smooth out your cycle necessarily.

23
00:01:22,520 --> 00:01:29,120
Speaker 3: What can help the consumer is to be more public

24
00:01:29,160 --> 00:01:33,240
Speaker 3: transport dependent. That's more fuel efficient per passenger kilometer, be

25
00:01:33,360 --> 00:01:37,080
Speaker 3: it train transport, be it bus transport, and you can

26
00:01:37,080 --> 00:01:40,559
Speaker 3: smooth upper cycles and make people less dependent on fuel

27
00:01:40,720 --> 00:01:43,840
Speaker 3: as opposed to heavy dependence of a portion of the

28
00:01:43,840 --> 00:01:48,400
Speaker 3: population on private vehicle transport. So there are there are

29
00:01:48,560 --> 00:01:51,720
Speaker 3: structural changes one can make that doesn't help you right

30
00:01:51,800 --> 00:01:55,440
Speaker 3: now when you've got a five rand perlitter odd price

31
00:01:55,560 --> 00:01:58,760
Speaker 3: increase coming your way in a few days time, unfortunately,

32
00:01:58,840 --> 00:02:02,040
Speaker 3: but you know, over the longer term, those type of

33
00:02:02,440 --> 00:02:07,320
Speaker 3: changes can proof you against these type of shocks.

34
00:02:07,360 --> 00:02:09,640
Speaker 1: More spare me a thought. I've got a diesel tank,

35
00:02:10,160 --> 00:02:14,920
Speaker 1: a seventy liter diesel tank, may I add, But let's

36
00:02:14,919 --> 00:02:18,160
Speaker 1: look at so the general fuel levy it generates roughly

37
00:02:18,320 --> 00:02:21,639
Speaker 1: one hundred billion annually. I'd love to see that ring

38
00:02:21,680 --> 00:02:27,959
Speaker 1: fenced and going into public transport, efficient, affordable, safe, public transport,

39
00:02:27,960 --> 00:02:29,200
Speaker 1: because that will get me out of my car.

40
00:02:31,240 --> 00:02:34,080
Speaker 3: Yes, you know, this has been a trouble with the

41
00:02:34,120 --> 00:02:37,320
Speaker 3: budget for a few the government budgets for a few

42
00:02:37,320 --> 00:02:43,000
Speaker 3: decades since about the nineteen eighties, for various reasons, various aspects,

43
00:02:43,200 --> 00:02:49,280
Speaker 3: various things have crowded out infrastructure spend, very very important

44
00:02:49,320 --> 00:02:52,400
Speaker 3: infrastructure spend and spend on things like you know, as

45
00:02:52,440 --> 00:02:55,840
Speaker 3: I believe should happen on public transports and sign So

46
00:02:56,520 --> 00:02:59,080
Speaker 3: we've got a hi, we've got a high level of debt,

47
00:02:59,160 --> 00:03:02,600
Speaker 3: We've got to hide portion of our budget being used

48
00:03:02,600 --> 00:03:05,680
Speaker 3: to service that get which is difficult to get away from.

49
00:03:06,120 --> 00:03:08,680
Speaker 3: High level of social grants, which is a function in

50
00:03:08,760 --> 00:03:11,919
Speaker 3: part of the high level of unemployment and poverty. And

51
00:03:12,000 --> 00:03:16,480
Speaker 3: so we've got these commitments, these current expenditure type commitments

52
00:03:16,480 --> 00:03:21,280
Speaker 3: which are very difficult to get away from without incre

53
00:03:22,280 --> 00:03:25,720
Speaker 3: and and if you if you allocate more money to

54
00:03:26,160 --> 00:03:30,640
Speaker 3: important infrastructure spend without cutting those, then you're going into

55
00:03:30,840 --> 00:03:35,840
Speaker 3: horising government injebtedness. So at the moment, the fiscal situation

56
00:03:36,080 --> 00:03:40,480
Speaker 3: is tight, very difficult to to to spend on these

57
00:03:40,720 --> 00:03:43,360
Speaker 3: needs that you just mentioned and that I absolutely agree

58
00:03:43,400 --> 00:03:45,280
Speaker 3: should be should receive some attention.

59
00:03:46,000 --> 00:03:49,920
Speaker 1: Tight tight. So when we're talking structural reform, I'm sure

60
00:03:50,520 --> 00:03:55,720
Speaker 1: a doge can deliver significant efficiencies, and I'm talking that

61
00:03:55,840 --> 00:03:58,000
Speaker 1: kind of structural reform. Just going to the lane items

62
00:03:59,440 --> 00:04:01,080
Speaker 1: on government spend.

63
00:04:02,240 --> 00:04:06,040
Speaker 3: Well, I think you can't just cut the government wage

64
00:04:06,080 --> 00:04:10,280
Speaker 3: bills on. There's possibly part of it that inefficiencies can

65
00:04:10,320 --> 00:04:13,960
Speaker 3: be improved, but I think it goes more about shifting

66
00:04:14,000 --> 00:04:17,480
Speaker 3: the boundary between the private sector and the public sector

67
00:04:18,600 --> 00:04:22,200
Speaker 3: and letting the private sector deliver more of the goods

68
00:04:22,240 --> 00:04:26,920
Speaker 3: and services and the public sector withdrawing to being largely

69
00:04:27,040 --> 00:04:31,640
Speaker 3: a regulatory body and doing the regulatory well, creating well

70
00:04:31,680 --> 00:04:36,000
Speaker 3: regulated competitive environments. Now, this is slowly coming to parts

71
00:04:36,000 --> 00:04:39,240
Speaker 3: of the economy that needed, such as electricity where we

72
00:04:39,320 --> 00:04:43,400
Speaker 3: see more independent power producers, railways where we're starting to

73
00:04:43,440 --> 00:04:47,159
Speaker 3: see private sector concessions being offered, and even to the ports.

74
00:04:47,440 --> 00:04:50,760
Speaker 3: So the thinking is shifting in that direction, just possibly

75
00:04:50,800 --> 00:04:53,680
Speaker 3: not fast enough, but yes, you'd have to not just

76
00:04:53,920 --> 00:04:58,360
Speaker 3: cut government costs aggressively. It needs to be a well

77
00:04:58,400 --> 00:05:02,559
Speaker 3: thought out strategy where private sectors allowed to take over

78
00:05:03,640 --> 00:05:07,000
Speaker 3: a big part of what was a government function to

79
00:05:07,040 --> 00:05:11,680
Speaker 3: deliver certain goods and services. That's really the guiding principle,

80
00:05:11,680 --> 00:05:13,520
Speaker 3: I think in the direction in which you've got to go.

81
00:05:14,640 --> 00:05:18,159
Speaker 1: Okay, so let's get a closer look at these fuel

82
00:05:18,200 --> 00:05:22,400
Speaker 1: price increases. So Treasury argued that the lack of fiscal

83
00:05:23,040 --> 00:05:29,480
Speaker 1: buffers means they cantcut the general fuel levee. What we

84
00:05:29,520 --> 00:05:32,160
Speaker 1: need to understand is is that inflationary risk of not

85
00:05:32,680 --> 00:05:36,000
Speaker 1: cutting the levee is it greater than a fiscal risk

86
00:05:36,120 --> 00:05:37,880
Speaker 1: of losing that tax revenue.

87
00:05:39,480 --> 00:05:41,560
Speaker 3: That is a tough one, A very tough one. Is

88
00:05:41,560 --> 00:05:44,080
Speaker 3: there is a thing called the Laffer curve, which says

89
00:05:44,120 --> 00:05:46,679
Speaker 3: that for a certain period of time, if you increase

90
00:05:46,760 --> 00:05:49,680
Speaker 3: tax rates, you'll get more tax revenue. When you reach

91
00:05:49,720 --> 00:05:51,800
Speaker 3: the peak of that curve and you start going down

92
00:05:51,839 --> 00:05:55,720
Speaker 3: the other side, further increases in taxes will lead to

93
00:05:55,800 --> 00:06:00,200
Speaker 3: a decline in tax revenue because of the damage to

94
00:06:00,240 --> 00:06:05,160
Speaker 3: the economy. I subjectively, I think I believe we're at

95
00:06:05,160 --> 00:06:07,640
Speaker 3: the peak of that curve and that tax cuts of

96
00:06:07,760 --> 00:06:11,680
Speaker 3: various types would be of benefit to the economy and

97
00:06:11,720 --> 00:06:15,080
Speaker 3: could boost tax revenues. But it's a very subjective view

98
00:06:15,160 --> 00:06:16,480
Speaker 3: and very difficult to measure.

99
00:06:16,920 --> 00:06:17,120
Speaker 2: Well.

100
00:06:17,240 --> 00:06:20,000
Speaker 3: It's not impossible as to where we are on that curve.

101
00:06:20,960 --> 00:06:22,800
Speaker 2: I don't think that.

102
00:06:23,720 --> 00:06:27,520
Speaker 3: Given the spending commitments the Treasury has, I'm not sure

103
00:06:27,520 --> 00:06:32,760
Speaker 3: that it will be giving relief this time around on

104
00:06:33,640 --> 00:06:36,719
Speaker 3: fuel levees. There are a lot of expenditure commitments which

105
00:06:36,720 --> 00:06:40,200
Speaker 3: it struggles to get away with without increasing.

106
00:06:39,720 --> 00:06:41,200
Speaker 2: The debt to GDP ratio.

107
00:06:41,520 --> 00:06:44,440
Speaker 1: Yeah, I guess there's not a There isn't any space

108
00:06:44,520 --> 00:06:46,320
Speaker 1: left for another hole in my belt. I mean, just

109
00:06:46,320 --> 00:06:49,760
Speaker 1: to what extent we tighten the belts. But let's look

110
00:06:49,800 --> 00:06:56,240
Speaker 1: at raf road accident funds technically insolvent despite a handsome levy,

111
00:06:57,480 --> 00:06:59,560
Speaker 1: and I think everybody wants me to ask this question.

112
00:06:59,600 --> 00:07:02,720
Speaker 1: I mean, throwing good money after bad money. I mean

113
00:07:02,720 --> 00:07:05,320
Speaker 1: that levy is also increasing on the first of April.

114
00:07:06,240 --> 00:07:09,960
Speaker 1: Is this a part of the inefficiencies that we should

115
00:07:10,040 --> 00:07:10,800
Speaker 1: be reforming?

116
00:07:12,360 --> 00:07:14,080
Speaker 2: Well, that's a that's a tough one.

117
00:07:14,280 --> 00:07:17,520
Speaker 3: I mean, certainly reforming in terms of speeding up the

118
00:07:17,600 --> 00:07:21,720
Speaker 3: Road Accident Fund's ability to deliver on on on the

119
00:07:21,760 --> 00:07:27,440
Speaker 3: claims that that would be desirable, I guess. But But

120
00:07:27,880 --> 00:07:31,280
Speaker 3: in terms of perhaps abolishing the road Accident Fund, well,

121
00:07:31,280 --> 00:07:33,480
Speaker 3: that's a that's a different debate. You know, there's there's

122
00:07:33,640 --> 00:07:37,960
Speaker 3: there's some good and there's certain good arguments for some

123
00:07:38,000 --> 00:07:42,640
Speaker 3: sort of cover for for for a road accident's situation.

124
00:07:43,960 --> 00:07:46,160
Speaker 3: That's a that's a heavy to be hefty debate to have.

125
00:07:46,600 --> 00:07:49,080
Speaker 3: But what would require in any case a change in

126
00:07:49,120 --> 00:07:53,960
Speaker 3: the legislation and policies One can't just overnight say well,

127
00:07:54,000 --> 00:07:57,000
Speaker 3: we were, we're doing away with that. So that's that's

128
00:07:57,360 --> 00:08:01,080
Speaker 3: I don't see that as a as a as a

129
00:08:01,120 --> 00:08:04,520
Speaker 3: potential measure which you can just unilaterally decide overnight that

130
00:08:04,560 --> 00:08:08,280
Speaker 3: you're going to cut that and and provide fuel relief.

131
00:08:08,920 --> 00:08:12,040
Speaker 3: I suspect that would take quite a significant period of

132
00:08:12,040 --> 00:08:12,880
Speaker 3: time to get right.

133
00:08:14,040 --> 00:08:20,080
Speaker 1: Okay, So let's look at the Raymond acumen argument argument,

134
00:08:20,480 --> 00:08:24,120
Speaker 1: and that is the deregulation of maybe ninety three octane competition.

135
00:08:24,320 --> 00:08:28,520
Speaker 1: Since you're saying we should go to the private sector

136
00:08:28,320 --> 00:08:34,760
Speaker 1: for some relief and for some assistance, could deregulation help

137
00:08:34,840 --> 00:08:35,200
Speaker 1: us more?

138
00:08:36,559 --> 00:08:39,319
Speaker 3: I'm not sure it could make a difference to how

139
00:08:39,360 --> 00:08:43,040
Speaker 3: the fuel price the timing of fuel price fluctuations. But

140
00:08:43,679 --> 00:08:46,520
Speaker 3: when you get a very significant oil price shock and

141
00:08:46,600 --> 00:08:50,880
Speaker 3: a rand appreciation too, and you're importing a significant part

142
00:08:51,880 --> 00:08:54,439
Speaker 3: or portion of your of your fuel.

143
00:08:55,520 --> 00:08:56,560
Speaker 2: I'm not sure.

144
00:08:56,920 --> 00:09:00,679
Speaker 3: I don't know how much difference that would make across

145
00:09:00,720 --> 00:09:04,760
Speaker 3: the world, where whether whether fuel prices are deregulated or not,

146
00:09:05,559 --> 00:09:08,520
Speaker 3: the world does feel a very significant impact of these

147
00:09:08,520 --> 00:09:14,000
Speaker 3: oil price shocks. So perhaps deregulation perhaps if you didn't well,

148
00:09:14,040 --> 00:09:15,800
Speaker 3: if you didn't have the fuel levue be a good

149
00:09:15,840 --> 00:09:21,200
Speaker 3: few round cheaper, that's true, but the fluctuations worthwild oil

150
00:09:21,240 --> 00:09:24,320
Speaker 3: price spikes such as the current one. I don't know

151
00:09:24,360 --> 00:09:29,680
Speaker 3: if you'd meaningfully get away from that the Yeah, so

152
00:09:29,679 --> 00:09:32,520
Speaker 3: so I know, I'm not I'm not providing much in

153
00:09:32,559 --> 00:09:34,520
Speaker 3: the way of solutions in the short term.

154
00:09:34,679 --> 00:09:36,719
Speaker 2: As I say, I think the bigger.

155
00:09:36,520 --> 00:09:39,000
Speaker 3: Solutions line in the longer term to be more public

156
00:09:39,040 --> 00:09:43,200
Speaker 3: transport dependent, more fuel efficientes in economy. But in the

157
00:09:43,200 --> 00:09:46,600
Speaker 3: short term, given the tight first of all situation in

158
00:09:46,640 --> 00:09:51,079
Speaker 3: which Treasury sits, I'm not sure what what relief can

159
00:09:51,120 --> 00:09:53,719
Speaker 3: be given immediately to the situation.

160
00:09:54,679 --> 00:09:58,320
Speaker 1: Okay, so there's no room there for them to bring relief.

161
00:09:58,320 --> 00:10:02,640
Speaker 1: We understand that, understand that maybe we should just look

162
00:10:02,760 --> 00:10:06,000
Speaker 1: at at work from home, what other means can we

163
00:10:06,080 --> 00:10:10,040
Speaker 1: employ to mitigate the desire? So that's going to come

164
00:10:10,080 --> 00:10:11,320
Speaker 1: with us fuel price.

165
00:10:12,000 --> 00:10:18,280
Speaker 3: Yes, I think that's where there will be significance changes made. Firstly,

166
00:10:18,440 --> 00:10:22,679
Speaker 3: consumers they do have, or many consumers should I say

167
00:10:22,720 --> 00:10:26,160
Speaker 3: many middle to higher income low income people unfortunately have

168
00:10:26,360 --> 00:10:27,199
Speaker 3: very little.

169
00:10:27,320 --> 00:10:28,079
Speaker 2: Room to maneuver.

170
00:10:28,640 --> 00:10:32,880
Speaker 3: They are more dependent on public transport, which fluctuates typically

171
00:10:33,000 --> 00:10:37,360
Speaker 3: less than private transport. But that small consolation for them.

172
00:10:37,400 --> 00:10:40,120
Speaker 3: The poor are always the most vulnerable to these type

173
00:10:40,160 --> 00:10:44,320
Speaker 3: of things. In the middle to hiring income groups, yes

174
00:10:44,360 --> 00:10:48,119
Speaker 3: there's room for many to work from home, not everybody,

175
00:10:48,120 --> 00:10:50,640
Speaker 3: but where possible. I suspect they might be a push

176
00:10:50,720 --> 00:10:54,679
Speaker 3: for more of that temporarily. And then of course there

177
00:10:54,720 --> 00:10:58,360
Speaker 3: is the discretionary type of spend, be it on transport.

178
00:10:58,440 --> 00:11:01,800
Speaker 3: The many trips are discretionary and one can cut back

179
00:11:01,800 --> 00:11:06,160
Speaker 3: on those. That's not great for tourism and leisure. And

180
00:11:06,200 --> 00:11:10,080
Speaker 3: then there's obviously other spending items that are non essential

181
00:11:10,120 --> 00:11:13,080
Speaker 3: in nature and also postponable.

182
00:11:13,120 --> 00:11:15,199
Speaker 2: You know, the new car that you do need at some.

183
00:11:15,200 --> 00:11:17,440
Speaker 3: Point, but you can postpone it for quite some time.

184
00:11:18,480 --> 00:11:21,760
Speaker 3: Those type of items are often put on hold, so

185
00:11:22,120 --> 00:11:25,840
Speaker 3: consumers will have room to maneuver in middle to higher

186
00:11:25,840 --> 00:11:31,520
Speaker 3: income ones in many instances, and that's where significant change.

187
00:11:31,360 --> 00:11:35,240
Speaker 3: One will see significant changes in consumer spend, and for

188
00:11:35,280 --> 00:11:38,559
Speaker 3: the office workers, the work from home is an option

189
00:11:38,679 --> 00:11:39,800
Speaker 3: for a significant portion.

190
00:11:41,720 --> 00:11:45,480
Speaker 1: I guess this is John Lewes, an economist we're talking about,

191
00:11:45,480 --> 00:11:48,440
Speaker 1: to do we need government intervention? I think we do

192
00:11:48,520 --> 00:11:52,520
Speaker 1: need government intervention, and maybe we should get creative about it.

193
00:11:53,400 --> 00:11:57,280
Speaker 1: To cope with the fuel price increases, and again, if

194
00:11:57,320 --> 00:11:58,959
Speaker 1: we're working from home, I just want to sas you

195
00:11:59,040 --> 00:12:03,600
Speaker 1: out on this one, do we create a two chair economy.

196
00:12:03,640 --> 00:12:07,200
Speaker 1: We know office workers can maybe save money, but essential

197
00:12:07,280 --> 00:12:11,560
Speaker 1: workers the manufacturing center sector will be the full brunt

198
00:12:11,679 --> 00:12:15,400
Speaker 1: of transport inflation. So yeah, your response to that.

199
00:12:16,280 --> 00:12:19,120
Speaker 3: Yes, And I know some people have said, you know,

200
00:12:19,360 --> 00:12:21,680
Speaker 3: it's it would be unfair if some are allowed to

201
00:12:21,720 --> 00:12:23,760
Speaker 3: work from home and others can't because of the type

202
00:12:23,760 --> 00:12:25,559
Speaker 3: of jobs they do, and that is true. I mean,

203
00:12:25,800 --> 00:12:29,319
Speaker 3: you know, it's never a fair I mean, we all

204
00:12:29,360 --> 00:12:33,320
Speaker 3: have different jobs, and there's certain jobs which are client

205
00:12:33,400 --> 00:12:36,000
Speaker 3: facing and they have to be in person. You think

206
00:12:36,040 --> 00:12:38,440
Speaker 3: of the medical care for instance, you can't really do

207
00:12:38,520 --> 00:12:42,320
Speaker 3: that online. So that is that is always the problem,

208
00:12:42,880 --> 00:12:46,280
Speaker 3: just as various jobs earn different incomes as well. It's

209
00:12:46,280 --> 00:12:50,319
Speaker 3: never equal and it's never it's never the same for everybody.

210
00:12:50,400 --> 00:12:53,959
Speaker 3: That that is unfortunately the case. So you know, it's

211
00:12:54,040 --> 00:12:59,840
Speaker 3: up to different industries to and different people and households

212
00:12:59,880 --> 00:13:02,160
Speaker 3: to come up with their own solutions, and some are

213
00:13:02,160 --> 00:13:05,559
Speaker 3: more able to than others. Unfortunately, that is the situation

214
00:13:05,679 --> 00:13:08,160
Speaker 3: we we unfortunately sit in at the moment.

215
00:13:08,480 --> 00:13:11,319
Speaker 2: Is you know, we've we've had these fuel.

216
00:13:11,080 --> 00:13:17,079
Speaker 3: Price shocks before, and yes, theoretically one could provide some relief.

217
00:13:18,000 --> 00:13:20,080
Speaker 3: I don't think the FISCUS has much room to move.

218
00:13:20,120 --> 00:13:23,640
Speaker 3: But let's say even they did were able to reduce

219
00:13:23,720 --> 00:13:26,480
Speaker 3: or suspend the fuel levy and provide a few rand

220
00:13:26,559 --> 00:13:30,720
Speaker 3: polter relief, that's still only a small, small impact. We

221
00:13:30,840 --> 00:13:34,520
Speaker 3: still are highly exposed to these oil price spikes. We

222
00:13:34,559 --> 00:13:36,760
Speaker 3: don't know how far this one's to go, going to

223
00:13:36,800 --> 00:13:39,040
Speaker 3: go so or just now oil price one hundred and

224
00:13:39,080 --> 00:13:41,400
Speaker 3: fifteen dollars a bot. So it's climbed since before the

225
00:13:41,400 --> 00:13:45,720
Speaker 3: weekend already, and we are unfortunately exposed to these type

226
00:13:45,760 --> 00:13:46,880
Speaker 3: of wild swings.

227
00:13:47,520 --> 00:13:49,120
Speaker 1: Yeah, and I think right now we should have for

228
00:13:49,240 --> 00:13:54,200
Speaker 1: a quick and abrupt end to the war in the

229
00:13:54,320 --> 00:13:59,959
Speaker 1: Gulf region. Mantashi John has said that we must drill

230
00:14:00,120 --> 00:14:02,600
Speaker 1: we mu's draw, women's draw in the orange of a basin.

231
00:14:02,640 --> 00:14:05,360
Speaker 1: We should drill for shale in the Karu. He says,

232
00:14:05,400 --> 00:14:09,240
Speaker 1: we must build refineries. We've got what the strategic Strategic

233
00:14:09,240 --> 00:14:12,040
Speaker 1: Film Fund. We should have a couple of million barrels

234
00:14:12,240 --> 00:14:14,600
Speaker 1: of well that we bought at a cheaper price. Could

235
00:14:14,760 --> 00:14:18,360
Speaker 1: that not bring some relief while it lasts well?

236
00:14:18,559 --> 00:14:23,000
Speaker 3: The drilling takes years, so chain changing your production capacity

237
00:14:23,040 --> 00:14:28,160
Speaker 3: that's again a long term thing. But the strategic oil reserves,

238
00:14:28,400 --> 00:14:30,560
Speaker 3: now that's a I mean, that's a possibility that the

239
00:14:30,600 --> 00:14:32,360
Speaker 3: AA has muted.

240
00:14:33,040 --> 00:14:36,160
Speaker 2: In recent you know, well, I've saw the report this morning.

241
00:14:38,000 --> 00:14:40,200
Speaker 3: Again, I'm not an expert on how far that can

242
00:14:40,240 --> 00:14:44,760
Speaker 3: go to to alleviating to giving some price relief, And

243
00:14:44,760 --> 00:14:47,360
Speaker 3: obviously it depends on how long this elevated oil price

244
00:14:47,440 --> 00:14:49,800
Speaker 3: goes on for as to whether you eat your whole

245
00:14:49,840 --> 00:14:55,160
Speaker 3: fuel reserve up or not. But my but one one

246
00:14:55,160 --> 00:14:58,080
Speaker 3: has to consider this, and I suppose it is an option.

247
00:14:58,160 --> 00:15:00,480
Speaker 3: I can't say it's not an option, but I guess

248
00:15:00,720 --> 00:15:04,760
Speaker 3: you know, my interpretation of strategic fuel reserves has always

249
00:15:04,760 --> 00:15:09,120
Speaker 3: been that's for the absolute emergency where you perhaps have

250
00:15:09,280 --> 00:15:14,520
Speaker 3: some supply shortage for whatever reason due to some infrastructure collapse,

251
00:15:14,760 --> 00:15:20,240
Speaker 3: a war. Maybe well we are still able to get

252
00:15:20,520 --> 00:15:24,680
Speaker 3: fuel and at a price, but you know, there can

253
00:15:24,760 --> 00:15:28,600
Speaker 3: come a time in a total disaster where you can't

254
00:15:28,640 --> 00:15:33,280
Speaker 3: get fuel at all. And that's always what I've interpreted

255
00:15:33,720 --> 00:15:38,840
Speaker 3: the strategic fuel reserve as being for. But nevertheless it is,

256
00:15:39,040 --> 00:15:41,680
Speaker 3: it is an option. I don't know how far it

257
00:15:41,720 --> 00:15:45,120
Speaker 3: can take us and I suppose much depends on how

258
00:15:45,160 --> 00:15:48,400
Speaker 3: long this oil price elevated oil price lasts, for which

259
00:15:48,400 --> 00:15:50,800
Speaker 3: we really have no idea where it will go.

260
00:15:51,040 --> 00:15:55,840
Speaker 1: I think the big international ones is maybe the petro dollar. Essentially,

261
00:15:55,920 --> 00:16:00,080
Speaker 1: maybe trading in like bricks is proposing trading in low

262
00:16:00,080 --> 00:16:05,120
Speaker 1: called currency with bricks aligned kind of countries. That could

263
00:16:05,200 --> 00:16:07,840
Speaker 1: be a possibility as well. How do you feel about those?

264
00:16:09,200 --> 00:16:12,280
Speaker 3: Well, I'm not clear on how trading in any current

265
00:16:12,400 --> 00:16:13,880
Speaker 3: different currency would.

266
00:16:13,680 --> 00:16:15,840
Speaker 2: Matter price of these prices of.

267
00:16:15,880 --> 00:16:19,120
Speaker 3: These the fuel oil tends to be global, tend to

268
00:16:19,160 --> 00:16:23,120
Speaker 3: be globalized. It's global supplying them on that drives them.

269
00:16:23,160 --> 00:16:26,120
Speaker 3: And you can denominate it tomorrow in Chinese, rend India,

270
00:16:26,160 --> 00:16:29,760
Speaker 3: or you can denominate it in rand. It's still a

271
00:16:29,800 --> 00:16:33,400
Speaker 3: globalized market where everybody is bidding for the for the

272
00:16:33,520 --> 00:16:36,640
Speaker 3: for the oil, and if there's a supply shortage in

273
00:16:37,120 --> 00:16:41,400
Speaker 3: a big producing region, there's a scarcity and various countries

274
00:16:41,400 --> 00:16:42,840
Speaker 3: across the world would bid it up.

275
00:16:42,960 --> 00:16:46,240
Speaker 1: Yeah, so supplied in mind will essentially drive prices.

276
00:16:47,400 --> 00:16:48,560
Speaker 2: Yes, I think so you can.

277
00:16:48,720 --> 00:16:50,920
Speaker 3: Whether you denominated in rand or not, it's going to

278
00:16:50,920 --> 00:16:54,280
Speaker 3: fluctuate accordingly to a large extent.

279
00:16:54,400 --> 00:16:57,360
Speaker 1: Yes, Yeah, that's regardless whether you are on the petro

280
00:16:57,440 --> 00:17:01,240
Speaker 1: dollar or not, I get you out in. Yeah. Again,

281
00:17:01,400 --> 00:17:05,080
Speaker 1: there's no spaces left on my belt to tighten that belt.

282
00:17:06,560 --> 00:17:09,040
Speaker 1: Maybe just the closing comment for the middle class that

283
00:17:09,160 --> 00:17:12,919
Speaker 1: is also feeling the stress very significantly, well.

284
00:17:12,840 --> 00:17:14,440
Speaker 2: Yes, I mean it is just.

285
00:17:16,000 --> 00:17:19,240
Speaker 3: It's very very difficult to know the short term to

286
00:17:19,320 --> 00:17:23,120
Speaker 3: see meaningful policy change.

287
00:17:22,840 --> 00:17:24,440
Speaker 2: To provide relief.

288
00:17:25,600 --> 00:17:29,119
Speaker 3: It is just really about, unfortunately, tightening the belt. And

289
00:17:29,200 --> 00:17:33,840
Speaker 3: I appreciate that various people are more able to do

290
00:17:33,880 --> 00:17:37,240
Speaker 3: that than others. It's not an equal situation which the

291
00:17:37,280 --> 00:17:41,280
Speaker 3: country finds itself in at the moment. But yeah, you

292
00:17:41,320 --> 00:17:45,200
Speaker 3: know what, I think we will see anyways, many households

293
00:17:45,640 --> 00:17:50,320
Speaker 3: that can cutting those non essential, low frequency purchases, putting

294
00:17:50,359 --> 00:17:52,159
Speaker 3: them on hold. So we'll see a slow down in

295
00:17:53,040 --> 00:17:56,359
Speaker 3: expenditure on durable consumer goods. We may even see some

296
00:17:56,480 --> 00:18:01,280
Speaker 3: slow down in home purchasing. A lot of expenditure items

297
00:18:01,320 --> 00:18:04,880
Speaker 3: will probably get put on hold by various households as

298
00:18:04,880 --> 00:18:08,639
Speaker 3: they try to manage their way through the shock.

299
00:18:09,760 --> 00:18:11,600
Speaker 1: Well, thank you for your time, and you're inside. John

300
00:18:11,720 --> 00:18:14,560
Speaker 1: Los an independent economist talking about what government can do.

301
00:18:15,040 --> 00:18:15,840
Speaker 1: Clearly not much