Gordhan’s R8bn for zero fee hikes
‘Peaceful’ protesters met with stun grenades
THE STUDENTS who marched on Parliament yesterday to demand money from Finance Minister Pravin Gordhan for higher education did not leave empty-handed. In his tough medium term budget policy statement in the National Assembly, Gordhan gave students R8billion for zero fee increases to those who qualify.
Gordhan and Higher Education Minister Blade Nzimande earlier told journalists in a pre-budget briefing in Parliament that everything was being done to accommodate the students.
Outside Parliament, police and protesters clashed in scenes reminiscent of last October’s fees protests.
In what appears to have been an unprovoked attack, police launched stun grenades at a group of students who had gathered outside Parliament for a legal
THE DAYS are gone of stateowned entities (SOEs) receiving guarantees from the government without tough conditions. This was after Finance Minister Pravin Gordhan outlined key principles that will have to be met by the affected SOEs before being handed bailouts.
In the medium-term budget policy statement yesterday in Parliament, National Treasury said it was keeping a watchful eye on under-performing SOEs. However, it warned they continued to pose a risk to public finances.
The state has given these SOEs guarantees of billions of rands over the past few years.
Gordhan said the SOEs needed to shape up.
The key SOEs the state was watching were SAA, South African Post Office (Sapo), the South African National Roads Agency Limited and Eskom.
These entities had been given billions of rands in loan guarantees in the past, to get out of financial trouble.
The state had spent almost R20 billion on SAA in the past few years.
Sapo has also been given guarantees of R4bn.
National Treasury said yesterday it wanted to mitigate risks to these SOEs.
It has been able to appoint the boards of directors to run them.
For some time now, some of the SOEs have been functioning without fullstrength boards.
It had affected their business plans, and the government was concerned about these SOEs’ weak balance sheets.
Gordhan warned there were key principles that needed to be met before the government could intervene in future when the SOEs fell into financial trouble.
“Over the medium term, any requests for fiscal support will be informed by the principles set out in the 2015 Budget Review,” said the National Treasury.
It said financial support for SOEs “must be consistent with sustainable public finances”.
In addition, “capitalisation cannot have an impact on the budget deficit”.
Finally, “entities receiving support are required to demonstrate sound business plans, improve governance and address operational efficiencies”.
This new direction will make it difficult for SOEs to receive guarantees unless they have met these conditions.
Gordhan has, in the past, expressed concern about the continued guarantees given to SOEs, as some of them have consistently suffered losses of billions.
There have been no recovery plans for some of the entities.