Consumption Today or Productive Capital Tomorrow?

C01

At a 6 percent real discount rate, the best industrial case overtakes the central value of the cash transfer in 2040 when the surviving public asset is counted, and in 2051 when only operating benefits are counted.

GSX:SRD-003:C01 · Modelled · Conditional · high sensitivity · Version 1.0

Depends on

A01Shared envelope and welfare valuesThe comparison uses the R253.5 billion constant-2026-rand envelope and Paper 2's central welfare value of R426.9 billion, which is R358.2 billion in 2020 present value at 6 percent.moderate sensitivity

A02Central discount rateThe central comparison uses a 6 percent real discount rate. The paper also reports 3.5 percent and the 10 percent public-project benchmark.high sensitivity

A03Asset-inclusive testCounting the surviving public asset is legitimate only if the asset is viable, maintained, publicly owned and capable of being sold or of continuing to produce.high sensitivity

Modelled results cited

R01Central comparison, 6 percent real discount rateAt 6 percent, the best industrial case overtakes the central transfer value in 2040 if the surviving asset is counted, and in 2051 if only operating benefits are counted.modelled

Registered supporting sources

Consumption Today or Productive Capital Tomorrow? · GSX:SRD-003:PDF

C01

There is no universal year when a factory becomes better than a cash transfer. The best case requires exceptional execution and a credible residual asset. The original households are not necessarily repaid even if the aggregate account later wins.