Vavi lashes state raid on PIC to bail out SAA

Weekend Argus (Sunday Edition) - - NEWS - BALD­WIN ND­ABA and QUIN­TON MTYALA

COSATU’s ri­val fed­er­a­tion union, the South African Fed­er­a­tion Trade Unions (Saftu), wants a mora­to­rium on gov­ern­ment em­ployee pen­sion funds so that they can­not be used to bail out strug­gling state en­ti­ties.

The move comes af­ter re­ports that trea­sury wanted the Pub­lic In­vest­ment Cor­po­ra­tion (IPC), which man­ages gov­ern­ment em­ployee pen­sions, to bail out SAA with more than R10 bil­lion.

Fi­nance Min­is­ter Malusi Gi­gaba’s spokesper­son May­ihlome Tsh­wete how­ever re­futed re­ports that the PIC would be used as gov­ern­ment’s piggy bank.

“It’s not a bailout, it’s a cap­i­tal in­jec­tion. A bud­get-neu­tral op­tion is go­ing to be ex­plored for that (SAA re-cap­i­tal­i­sa­tion),” said Tsh­wete.

He said Gi­gaba had meant that all op­tions were be­ing ex­plored to en­sure SAA re­mained a go­ing con­cern.

But Saftu gen­eral sec­re­tary Zwelinz­ima Vavi said some of these state en­ti­ties ear­marked for huge bail-outs were al­legedly in­volved in the state cap­ture ac­tiv­i­ties of the Gupta fam­ily.

Saftu wants the al­leged cul­prits of state cap­ture to be charged and those guilty of cor­rup­tion and mis­man­age­ment to be forced to re­pay the money they had stolen.

“These are the state-owned en­ter­prises which have been at the cen­tre of al­le­ga­tions of cor­rup­tion and mis­man­age­ment by the net­work of loot­ers around the Gupta fam­ily.

“This was one of the rea­sons cited by rat­ing agen­cies when they cut South Africa to junk sta­tus in April.

“Of the R1.857 tril­lion which the PIC man­ages, 88.2% is in the Gov­ern­ment Em­ploy­ees Pen­sions Fund (GEPS), which ex­ists to en­sure re­tired work­ers get a de­cent re­tire­ment in­come; and a fur­ther 6.7% of the PIC’s money is the Un­em­ploy­ment In­sur­ance Fund (UIF), which pro­vides short-term re­lief for re­trenched work­ers.

“Thus 94.9% of the PIC’s funds is work­ers’ money. And it should be used in the work­ers’ in­ter­ests,” he said.

He fur­ther said “while the funds should be in­vested in so­cially de­sir­able en­ter­prises which ben­e­fit so­ci­ety as a whole, they must also be in­vested in a wide spread of com­pa­nies which are most likely to be prof­itable and pro­vide the best re­turn to the PIC and ul­ti­mately to the work­ers”.

Vavi also said that it would “there­fore be an as­sault on the liv­ing stan­dards of the poor and the goal of a bet­ter life for all”.

The fed­er­a­tion, how­ever, re­jected a call by Fe­dusa, that work­ers’ pen­sion funds should be handed over to pri­vately owned money man­agers.

“This would put the man­age­ment of work­ers’ pen­sions into the hands of pri­vate com­pa­nies mo­ti­vated by the search for max­i­mum prof­its, re­gard­less of the ethics of the com­pa­nies in which they bought stakes, with still no guar­an­tee that they will make any bet­ter re­turns than the PIC and will be even less ac­count­able to the pub­lic than the PIC.

“PIC it­self also needs to be made more demo­cratic and ac­count­able, so that the em­ploy­ees have rep­re­sen­ta­tives to take de­ci­sions on how their money should be in­vested and man­date the PIC of­fi­cials to im­ple­ment these poli­cies,” Vavi said.

Zwelinz­ima Vavi

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