SAA funding puts government pensioners at risk
Gerrit Erasmus, Bellville:
The funding of the new South African Airways is problematic. The ANC government has been pouring taxpayers' money into an ever increasing debt hole without any success to rescue the old SAA. A rescue team was called in to assist and to recommend a way forward because the government is experiencing major financial problems and it could not afford to subsidise the losses of the old SAA any longer.
After a lot of pressure by labour unions and government, the rescue team recommended the creation of a new smaller SAA out of the existing old SAA, but there are no publicly known recommendations as to how the small new SAA will or can be financed. Details are scant but it seems as if there are talks behind closed doors to find suitable private and equity financiers to invest in the new SAA because the government of the day is not in any position to carry the burden.
Private financiers and fund managers are in a position that they can decide where to invest based on risks and expected returns. The fear of quite a number of GEPF (Government Employees Pension Fund) pensioners however, is that the government will put political pressure on the GEPF trustees and the PIC (Public Investment Corporation) to force investment in the new SAA.
The GEPF funds are monthly contributions made by past and present government officials towards a pension on their retirement and not by law and prescription to be used for financing of risky government projects or risky stateowned enterprises (SOE) funding. There are still the uninformed representatives from labour organisation, advisers to government, politicians and journalists that are of the opinion that the GEPF is there to fund those government projects and SOEs, like the new small SAA, that are regarded to be too risky for investment by private investors. The trustees of the GEPF are requested not to allow the GEPF, through their agent the PIC, investment in a new SOE like the new SAA with no proven record of financial success. The people at risk will be the government pensioners who are dependent on a secured and stable pension on their retirement.