Funding SAA is my mandate, not my choice, Mboweni tells irate MPs

JOHANNESBURG - Finance Minister Tito Mboweni found himself in the crosshairs of parliamentarians as he once again found himself defending the allocation of R10.5 billion to the business rescue process of troubled national airline, South African Airways.

Faced by a barrage of questions from opposition party members, he insisted during the virtual plenary that the allocation to SAA in the medium-term budget policy statement (MTBPS) was not a "bailout" but sought to facilitate the business rescue process at the airline.

"This is not a bailout because the allocation is made for the business rescue practitioner's plan. It's not for the whole of SAA. If you check carefully, the sub-allocations show provision for retrenchment costs, un-flown tickets, commitments and so on," he said.

Members of Parliament at the NCOP expressed misgivings about the allocation announced in last month's MTBPS, saying the movement of funds from other departments and functions to SAA should not infringe on the rights of the poorest and most vulnerable.

"National Treasury and COGTA should conduct assessments of service delivery standards on the ground where it relates to changes in allocations to assist SAA. Poor and vulnerable South Africans could be and may be affected. This should include measures to mitigate negative impact," said Select Committee on Appropriations chair Dikeledi Mahlangu.

A number of departments lost out on some funding so that SAA could get R10.5 billion, including the Department of Basic Education and The Department of Defence and Military Veterans. Mboweni reminded MPs of the grave situation South Africa's economy was in, referring to the R332 billion decline in revenue, which meant that South Africa's projections compared to expectations in February were worse than originally expected.

"We are no longer as rich as we thought we are. In fact, there are a number of things that we will need to scale down on because we simply cannot afford them. We need to bring down the debt to GDP ratio and, of course, part of that growing the economy and structural reforms," said Mboweni.