Vavi lashes state raid on PIC to bail out SAA
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.