South African consumers are getting poorer:
South African consumers have 42% less spending power than they did nine years ago, because salary increases have failed to keep up with the rising cost of living.
This was among the findings of a report by the country’s largest debt management company, Debtbusters, for the fourth quarter of 2024, which said consumers are facing a rising debt service burden and spending 68% of their take-home pay on debt repayments. Those earning R35 000 or more a month used 74% of their income to repay debts.
It said consumers who applied for debt counselling with the company in the fourth quarter had 42% less purchasing power in real terms than they had in 2016. Although nominal incomes were 2% higher than eight years ago, cumulative inflation totalled 44%, the report showed.
DebtBusters executive head Benay Sager described 2024 as a year of “two chapters”. The first half of the year had been characterised by high interest rates, high food price inflation, load-shedding and pre-election jitters, but consumers got some relief during the second half with positive news about the government of national unity, lower inflation, the absence of power cuts and two interest rate cuts of 25 basis points each.
Sager said access to retirement funds through the new two-pot system that allows limited early withdrawals had also buoyed consumer finances, with about two million consumers accessing their retirement savings.
“As a result of this positive second half, 2024 was a better year than 2023 for South African consumers,” he said.
But consumers remained under financial stress and demand for online debt management rose 9% while debt counselling inquiries increased by 8% compared with 2023. Most consumers had more than one loan from different financial institutions and the average age of people seeking debt counselling was 41.
“The increasing use of online debt-management tools indicates consumers are being more proactive about debt before it gets out of control. The data also points to more people considering debt counselling as an effective way to deal with debt in a high-interest environment,” Sager said.
The report said the fourth quarter was the second consecutive quarter where the median debt-to-annual-income ratio increased from all-time lows to 113%.
This indicator was 137% for those earning R20 000 a month and 187% for people taking home R35 000 or more, the highest-ever debt to income-ratio recorded for these income bands.
This indicates that consumers are still experiencing the effects of interest rate increases that began in November 2021, which, despite some respite, remain elevated,
Sager said.
Unsecured debt was a prominent feature in consumers’ debt portfolios and remained “unsustainably high”, on average 29% higher than in 2016.
For those taking home more than R35 000 a month, it was 60% higher, showing that in the absence of any meaningful salary increases, consumers are supplementing their income with unsecured debt.
“Eighty-two percent of those who applied for debt counselling during the quarter had a personal loan and 52% a one-month loan. This indicates that consumers continue to supplement their income with short-term loans and personal loans have become a lifeline for many people,” Sager said.
Under debt counselling, interest rates for unsecured debt can be renegotiated, often resulting in reduction from 24.6% to 2.5%. This allows consumers to pay back expensive debt faster.
Interest on vehicle debt and balloon payments, which average 15.4% can be negotiated down and the period extended, Sager said.
He warned that younger consumers, especially those in their twenties, are falling into the debt trap when purchasing vehicles because they did not understand interest rates, and they have also signed up for balloon payments.
Gen Z needs to get out of its comfort zone:
The left has become unrecognisable, not least because anti-Semitism has become one of its silent partners. It was integral to the far right in the last century. It now inhabits the far left.
There’s another reversal worth mentioning. In the last quarter of the 20th century, the bastion of political correctness was the religious far right. The left’s default position was irreverence and mockery. Its bastion is now the far left and Trump and his ilk are ingenious in finding ways of ridiculing it.
What explains this reversal in the political landscape?
It becomes noticeable in 2015, a year after the Gen Zs enroll at university. I will consider one fact that explains this change. Let me first say a thing or two about this generation.
The first is that it experiences itself as a group that is fragile in body and mind. It is averse to taking risks and to having its opinions challenged. It favours being reassured and feeling safe.
Why is that? If you were born in 1996 or thereafter, then you spent most of your childhood and teenage years online, being part of virtual communities, at home and under parental supervision. And you’ve lost out on the skills kids generally acquire when participating in games away from their parents or outside the home.
For instance, when a conflict arises between kids engaged in some game on a playground, and they’re unsupervised, they have to figure out a way of resolving it on their own. That builds resilience, strength of character and a desire to reach consensus in spite of differences of opinion.
Virtues like these are integral for kids who will later have the duty of sustaining a democratic form of government. I will return to this in a moment.
The other thing worth mentioning is one of the principal ideas of this generation. This is that what I feel is the case is the case, or the idea that my feelings track the truth. If I feel I am being bullied, then I am being bullied. If I feel you’re being racist, then you’re being racist.
What does that imply? Among other things, that I should not be exposed to ideas that disagree with mine because they make me feel bad, that is, they harm me. Disagreement, in this context, becomes “microaggression” and speech a kind of violence.
Contrary to the old rhyme “sticks and stones”, there are some words that do break one’s bones. This generates the “cancel culture” we have become familiar with.
It is worth noting in this connection that people are not cancelled because they express racist, sexist or oppressive ideas. It is because their ideas make students “feel unsafe” and are “triggering material”.
In other words, the cancel culture doesn’t strike me as a political or social thing per se, despite what it claims. It is a mental health issue, that is, one concerning the difference danger versus safety (rather than right versus wrong).
Let me now turn to my main point. So, we have a group of young adults, fragile in body and mind, owing largely to the ubiquitous presence of social media in their lives, that enters university in 2014 and 2015. And every student who chooses a subject in the humanities is taught, as one of its essential components, intersectionality. That is what I want to talk about. After explaining the notion, I will tease out two of its effects.
I want to say three things about intersectionality. The first is that it is a diagnostic tool the social scientist uses to make power relations that are otherwise invisible in the workplace and elsewhere visible.
Take a company like Mattel. Let’s say it has 12 members on its board of directors. How many black people does it employ as compared with whites? How many women does it employ as compared with men?
Let’s say its board includes 50% black people and 40% women. You may think that the principles of equity and diversity are almost perfectly realised. You would be mistaken, however, if it turned out that it has no black woman on its board, because the 50% black people are men and the 40% women are white.
As individuals, we intersect both grids, black/white and man/woman. The social scientist has to add more variables to complete her analysis: white male, black male, white female, black female. She will add more variables as she considers their sexual orientation, their abilities and disabilities and so on.
Now — and this is the second thing I want to say about it — students are not taught to see intersectionality only as a tool of analysis but also as a representation of society. It tells you who is in power and who is in a position of minority.
White straight males are typically found on top of the food chain in most sectors of society. Those who have the opposite characteristics are found at the bottom end, such as nonwhite, non-straight women, transgender and disabled people.
The problem begins when professors at places like Berkeley and Harvard (and the rest) embed this representation in a moral setting and they tell their students that those who are in power are evil and that the oppressed are good. This is the moment when they cease to teach and they begin to proselytise.
I call it an “epistemic (or cognitive) distortion”. Its effects are many. I will mention two.
First, it produces a politics that is incompatible with democracy or a republican form of government where consensus has to be reached on issues between individuals who are otherwise in disagreement about almost everything.
For what do you do when you believe that the person who disagrees with you is (by virtue of disagreeing with you) evil? You refuse to hear him out. You cancel him. Now add to that the fact that students want to be emotionally safe and the attack on free speech becomes inevitable.
It is certainly ironic that free speech should come under attack today from the left.
The other effect is no less debilitating. Young adults, including Gen Zs, typically go through a developmental stage where their main concern is their moral standing in the world. They ask themselves questions like, “Am I a good person?”, “Does she [some authority figure like a professor or parent] love me?”, “Does she consider me worthy of being loved?”, “Do my friends think well of me?” and so on.
Now, the simplest way for a left-leaning Gen Z to resolve these questions is by looking at where he stands on the chart of the social food chain. “Am I a white male? Damn, that means I’m evil! But hold on, I’m queer as well. That may not make me good but it mitigates how evil and oppressive I am.”
One problem, then, is the framing of society as a battle between good versus bad people. It is a distortion to view the oppressor as evil and the oppressed as good. And besides, there is no place for morality in the analysis of power and, generally, in the human and social sciences.
The other problem is that the left-leaning Gen Z cannot help but think that his sexual identity and orientation says something profound or deep about his self, something moral or metaphysical, to the point that he talks about it compulsively with everyone.
The fact is that it says nothing deep or profound, it says nothing at all. Besides, one’s sexual identity hasn’t been a political or social issue worth talking about in public since the Millennials and Gen X.
I believe that this generation has to unlearn virtue signalling, that is, posturing as a good person by declaring who you hate and love, and that it has to learn how to disagree.
I worry that, by the time my children are of age to start university, its motto will be, “Here we do not educate to make you think, we educate to make you feel comfortable.”
The left has lost its grip on commonsense by pandering to some of these views. It is one of the reasons it lost the election in the US. The left will keep alienating ordinary working folk as long as it continues to make common cause with the fringe insanities of identity politics.
It is not merely the university but the future of democracy that is at stake.
Rafael Winkler is a professor in the philosophy department at the University of Johannesburg.
Developer withdraws huge lawsuit against Joburg activist and conservancy:
A property developer has withdrawn a damages claim of nearly R200 million against a Johannesburg environmentalist and the conservancy she runs, which it had filed over objections to township applications it says delayed its projects.
Century Property Developments and subsidiary Riversands Developments had, in February 2021, sued Kristin Kallesen in her personal capacity, and the Greater Kyalami Conservancy (Gekco), which she chairs, for damages for alleged delays they say cost them R197 million.
The developer has withdrawn the lawsuit in what Kallesen said was a “classic example of a Slapp suit” (strategic litigation against public participation).
“These cases are intended to intimidate and, if successful, may silence activists, journalists and whistleblowers, for example, if not opposed,” she said.
Kallesen, on behalf of Gekco, had lodged objections to multiple township applications by Century for the Helderfontein Luxury Estate and Riversands Commercial Park, citing encroachment into wetlands and other environmental impacts. This was not only of the developments themselves but the proposed road infrastructure needed to service them.
Century and its subsidiary in turn sued Kallesen and the conservancy after they had received approvals for various applications in Helderfontein and Riversands.
In the summons, the firms alleged that objections and appeals lodged by Gekco delayed the projects and were not valid because of a ruling made by the Municipal Planning Tribunal in 2019.
The companies claimed that Kallesen and Gekco had “abused” the statutory objection and public participation procedures because “frivolous and baseless” objections were filed against all the township applications by both defendants, none of which were upheld by the City of Johannesburg.
This, they alleged, was to procure delays, prevent the firms from building on the properties and cause financial harm.
The defendants, similarly, for the same reason, “abused the statutory appeal procedure” provided for in the prevailing town planning legislation and had lodged several entirely unsubstantiated and mala fide appeals against the decisions of the municipality, by virtue of which such townships have been approved.
“Not a single one of such appeals lodged by or on behalf of the defendants have been upheld by the municipal appeal tribunal,” the firms stated.
Kallesen approached the Centre for Environmental Rights, which had formed the Asina Loyiko campaign in response to the growing trend of Slapp suits. It introduced Gekco to public interest law firm Power & Associates, which took on Kallesen and Gekco’s case.
A few months after receiving the summons, Gekco, with the help of its legal team, decided to review the decision of the tribunal to declare the conservancy’s objections invalid.
According to Kallesen, the Gekco committee believed this set a “dangerous precedent” for conservancies and residents’ associations and argued that the tribunal chair had made a decision that was procedurally flawed and prejudiced the conservancy.
“This review application proceeded slowly, mainly due to the failure of the City [of Johannesburg] to file the record on which they based the decision,” she said.
“Gekco’s legal team launched an application to compel the city to provide the record. This was granted and once the files were received, the review application was finalised and the matter was set down for a hearing.”
Despite filing a notice to oppose the application, both Century and the city failed to file a response until shortly before the matter was to be heard on an unopposed basis. The delayed filing meant that the matter had to be postponed. The city and the developers were ordered to pay costs.
Gekco initiated discussions with the city, which ultimately led to a settlement in January last year. The agreement recognised that Gekco was entitled to take part in the city’s public participation mechanisms, such as those in place before the Municipal Planning Tribunal, and that Kallesen was entitled to represent Gekco in these forums in compliance with the applicable bylaws.
Kallensen said Century had made no efforts to pursue the matter since May 2021, when Gekco filed its plea. In addition to the agreement reached with the city, the constitutional court handed down a landmark judgment in November 2022, which recognised the Slapp defence in South Africa.
All these factors meant the lawsuit had become moot. The matter was formally
withdrawn on 14 January, with the parties each paying their own costs.
Kallesen said Gekco’s members feel their demand for the right to freedom of expression, among others, had been vindicated.
“This despite every effort of this and other property developers to silence and intimidate both the conservancy and our members. It is an unfortunate story about corporate bullying in South African society.”
She expressed gratitude for the assistance from Power & Associates and counsel members who assisted on a pro bono basis.
“We have been blessed to witness firsthand the robust laws in place to protect individuals and communities who exercise their right to participate in public processes,” Kallesen added.
“These exist, not only in our Constitution, but because of the committed legal professionals who give their services to ensure infringements of these rights are opposed and justice is upheld.”
Mark Corbett, the chief executive of Century Property Development, said it has developed more Edge-certified development units than any other developer. Edge certification is a Green Building Council certification process for green buildings.
“To achieve Edge certification, we have invested millions of rands to ensure that our developments, from construction to operation, maintain the lowest possible carbon footprint. A key priority remains the effective long-term sustainability of our developments.”
Corbett said there were two court cases, one in which Gekco was “seeking to invalidate by way of a review application, all the Riversands and Helderfontein approvals”. The second was a damages claim against, among others, Kallesen because “she was operating beyond Gekco’s constitution, jurisdiction and/or authorisation”.
“We did not progress the damages claim as we were engaged in negotiations between the various legal representatives from the council, Gekco and ourselves. A settlement was subsequently reached between the council and Gekco, resulting in the review application to set aside all the Riversands and Helderfontein approvals being withdrawn by Gekco, with each party paying its own costs.
He said it was always the objective to “find common ground where we could work together, rather than Gekco objecting to each and every development”, followed by an appeal and “thereafter submitting a review application to the high court in an attempt to prevent all development in the area in question”.
Corbett said the Parks Estate in Riversands, “which Gekco objected to and appealed”, is today “the largest Edge-Certified development in South Africa and provides affordable rental accommodation to thousands of families, many of whom previously lived in Diepsloot”.
On completion of Helderfontein, the VAT revenue to the government will exceed R450 million, he said. “The thousands of jobs created, property rates and taxes, and transfer duties paid to the government all contribute to economic growth.
“Riversands and Helderfontein support a diverse mix of social housing, affordable rental accommodation, quality private and government schools and high-end estates.”
Kallesen, however, emphasised Gekco’s objections related to encroachments into the wetlands and buffer zones, densities and environmental impacts. Gekco has not objected to all development in the area, she said.
She said Corbett had provided a misrepresentation of the proceedings. “The review application was launched after we received the Slapp suit and it sought to ensure that objections raised by Gekco are treated in a procedurally fair manner by the planning tribunal.”
It was settled when the City of Johannesburg recognised Gekco’s legal standing. “It had no effect on the developments of Riversands and Helderfontein, which were already approved when Century Property Developments sued Gekco in February 2021, and which have been under construction over the past few years.
“Gekco continues to advocate for sustainable environmental practices within legally permissible bounds and has previously noted its willingness to build a cooperative relationship with property developers, which still stands.”
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