SAA to force govt’s hand?
With workers getting fed-up seeing government bailing out state-owned enterprises, an expert warns that the current South African Airways strike can force government to reconsider selling it.
Warns workers are ‘tired of seeing politicians and SOE executives living on golden clouds’.
The SAA strike might be just the push over the cliff the state needs to convince it to do away with state-owned enterprises (SOEs), which have been turned into “parasitic” businesses that take more than they give while benefitting few.
Economic and labour analyst Mamokgethi Molopyane says continuing to bail out these “numerous loss-making, deep-in-debt and mismanaged SOEs will not turn them into vehicles of social transformation for greater good”.
When SAA gives in to the wage demands tabled by the unions, led by the National Union of Metalworkers of South Africa (Numsa) – and that surrender will just be a matter of time and percentage – it “will have dealt itself a devastating blow”, she said. The airline said last week it loses R52 million a day for every day it does not fly.
“A strike that shuts down airports and grounds flights for a day or two has serious financial implications for the economy. Moreover, as this is happening just as the holidays season is about to begin, the subsequent effects will not be limited just to the airline industry but also the hospitality and tourism sectors,” Molopyane said.
“In these pivotal times, the state’s propensity for repression is limited as any strong action can lead to outright clashes between workers and the police, and can lead to further mobilisation and protests around all airports.”
Further losses at SAA, however, will strengthen the hand of Finance Minister Tito Mboweni, who has never held back about the unsustainability of state bailouts for SOEs. In his medium-term budget policy statement he made it clear that SAA is unable to generate the income that it needs to sustain its operations. It is this lack of income and accountability that is adding to the calls for the national carrier to be privatised.
But the fight for SAA is part of a broader fight for the political soul of the ANC, as the “stagnated economy and the crisis within SAA has created an opportunity for unions to advance their political interests”, Molopyane said.
The other political explanation relates to the leaders involved – from the state to the unions. On the one hand, Numsa has been the biggest critic of government’s handling of SOEs. The union has never hidden its aversion to Public Enterprises Minister Pravin Gordhan in his engagements with Eskom, and have consistently called for him to be fired.
Molopyane said the “politics of unions” meant they would use wage demands as tools to “outdo their rivals”.
Also, she noted, “worker patience is wearing thin”.
They are “tired of seeing politicians and SOE executives living on golden clouds while calling on them to tighten their belts”.
“In a society where workers spend most of their income on transport and basic food, to have SOEs that burn through cash and ask for more is insulting.
“Why shouldn’t they ask for more wages when the state has made it clear it always bails out SOEs because they provide a public service for the public good?”
Molopyane said SAA was “one of the many state-owned enterprises (SOEs) that has to be regularly bailed out.
“This is another example of public spending that is meant to be for the greater good, yet in reality it is throwing money at a problem that remains unfixed.”