To my mind
ONE WONDERS JUST how many wellreasoned and intelligent arguments have been swept aside by the statement: “We’re going ahead with it because it’s in the interests of the country.”
The old National Party government usually used it when it granted loans through so-called off-balance sheet financing to struggling state and semi-state institutions and even to municipalities.
Under the ANC Government, this poor excuse is used less frequently – thanks to the competent leadership of the Department of Finance, which attaches much more value to fiscal discipline. Unfortunately, we still have some policymakers who don’t fully subscribe to financial discipline. In fact, there are a few white elephants they continue to feed despite their being nothing but a drain on the economy.
For example, here’s no point in trying to keep the Land Bank, with its outdated business model, alive. It’s been in intensive care for far too long. Government’s latest R700m lifeboat and the R1,5bn soft loan that Treasury has had to provide to keep it afloat (probably due to political pressure and not sound business principles) will merely postpone the inevitable for a little longer.
It appears that the Land Bank’s losses over the past five years were around R5bn and it’s we, the taxpayers, who ultimately finance it. Those who use the argument of it being in the interests of South Africa say that the Land Bank is necessary to assist in providing loans to emerging farmers. What nonsense, the bank hardly finances any emerging farmers, so its contribution is minimal.
In fact, most of its losses over the past five years apparently stem from old loans mainly made to white commercial farmers and agricultural co-operatives. And the biggest losses over the past year resulted from financing property developments that have nothing to do with farming. Anyone who believes that the Land Bank can provide a more cost-effec- tive and better service to small and emerging farmers than SA’s commercial banks – and smaller, newer banks such as Capitec – is sadly mistaken.
And those who believe the myth that a country needs a State-supported airline are equally wrong. It’s true that many countries give their national airlines some financial support, but there are many instances where airlines don’t receive state support and still manage to operate profitably. In most cases these successful airlines are run as private companies and compete commercially.
For how much longer will we meekly condone the fact that we must finance SAA’s losses? These have already reached the stratospheric heights of about R12bn over the past five years. Under the leadership of CEO Khaya Ngqula very little progress has been made in cleaning up the mess left by his predecessor André Viljoen – even though most aircraft now fly at a capacity of more than 70%. The only conclusion is that SAA’s financial free fall is due to bad management.
Both the Land Bank and SAA must blame their managements for the sorry state of affairs they’re in. It would have been very difficult for their managements to escape condemnation had they been private companies reporting to private investors.
If we can justify giving an organisation State support, Government should at least ensure that it appoints competent people to its management. Inefficiency can never be justified – certainly not “in the interests of SA”. It’s high time that we finally got rid of these white elephants – in the interests of the country.