Let’s help businesspeople of all races, Mboweni urges

The government needs to support all enterprises in its Covid19 relief funding, regardless of race, finance minister Tito Mboweni said on Tuesday.

“I think that we need to support all enterprises, black and white, as long as they are able to remain viable to support our people, create jobs,” Mboweni told parliament’s two finance committees about the Treasury’s strategic and annual performance plans.

The lockdown has brought SA’s economy to a near standstill, leading to businesses either being shut down, or to the brink of closing their doors.

Trade union Solidarity is approaching the Constitutional Court to appeal against a high court ruling allowing the department of tourism to use B-BBEE as a consideration when dishing out R200m in state relief funding to cushion the sector from the effects of the Covid-19 pandemic.

The union has also laid a charge of perjury against small business development minister Khumbudzo Ntshavheni for allegedly contradicting herself over her department’s decision to use B-BBEE as a criterion to help distressed companies affected by the coronavirus.

Mboweni said he had held a discussion with a white hotel owner whose business was successful in good times and whose employees were 95% black. The hotel, which was in a tourist area, was closed because of Covid-19 and the owner told Mboweni he could not get money from the government because he is white.

The finance minister told the owner that he was sure he was wrong and that he had misunderstood the position, but would discuss the issue of the relief fund with tourism minister Mmamoloko Kubayi-Ngubane.

DISCRIMINATED

“There will always be a bias towards emerging black businesses because they were discriminated against for a long time, but let’s pull together and build a SA of our dreams, nonracist, nonsexist, and democratic and prosperous.”

Kubayi-Ngubane has said the relief scheme does not discriminate against white business people as long as their businesses are B-BBEE compliant.

Mboweni emphasised on Tuesday the urgent need for the economy to open up from the lockdown.

“The quicker we are able to reach level 2, the better, but at the same time we must not be careless about it as we have to balance the needs of the economy with the health status of our people. There is no doubt, in my view, that the opening of the economy is urgent, but this urgency must be tempered by the need to protect the lives of our people. We need to have a balance — it is not an eitheror situation.”

In terms of the government’s R500bn stimulus package, government departments will have to implement R130bn in budget reprioritisation to cover the cost of Covid-19 programmes.

This, and other cuts, will be reflected in the supplementary budget, which the Treasury will table in parliament in June or July to reflect the decline in expected revenue, the expenditure and funding for Covid-19 and the changes to the budget deficit and debt ratios.

Mboweni said he is no longer interested in funding dysfunctional state-owned enterprises, though he fully supports functional ones such as partially state-owned Telkom.

He is in favour of arms manufacturer Denel getting help but it needs to get its business case operating properly, he said.

The company supplies both the domestic and international markets and has the capacity to assist in the transformation of

R200m the amount the tourism department will dish out in state relief funding to cushion the tourism sector from the effects of the Covid-19 pandemic

the military-industrial complex.

With regard to the creation of a state bank and sovereign wealth fund, Mboweni said the situation has changed since they were announced in parliament in February, but the Treasury is nevertheless committed to their creation and has completed work on the matter. But at the moment it will be a challenge for the state to capitalise a stateowned bank.

The minister said the question of structural reform has become more important, particularly as the government may be approaching the IMF for Covid19-related funding.

The question has been raised whether such assistance will be tied to structural adjustment conditionalities or not.

The Treasury had begun to propose economic structural reform long before the emergence of Covid-19.

Questioned about his statement supporting the direct purchase of Treasury bonds by the Reserve Bank, deputy finance minister David Masondo, who was also briefing the committees, reiterated his defence of the comments, but pointed out that making a comment on the Bank is different from taking a decision on its behalf.

The Bank will not allow any challenge to its independence, he said.

R500bn

the value of the government’s stimulus package