SOE bailouts unthinkable at this time of crisis – DA
THE DA is pushing for the scrapping of bailouts for SA Airways and other state-owned enterprises (SOEs), and the government funding to be redirected to the battle to curb the spread of Covid-19.
The DA made the call as the Health Department, like other departments and state agencies, are facing budget cuts.
“At this time, it is unthinkable that redundant SOEs like SAA will receive a bailout of R16.4 billion, as is proposed in the current Budget, while the health budget is to be cut by R3.9bn, DA MP Geordin Hill-Lewis said.
“This SAA bailout should be cancelled immediately and the budget amended to allocate this money to disaster relief, and to provide for the essential equipment that our health officials will surely need in the coming weeks,” Hill-Lewis said.
The Health Department has acknowledged the reduction in its budget allocation with Deputy Health Minister Joe Phaahla saying recently they were not folding their arms as the department’s budget was set to be reduced in the medium term expenditure framework.
His call comes in the wake of statements made by DA leader John Steenhuisen, who called for a comprehensive economic support package to see the country through this time, and that it should prioritise the needs of citizens.
“We simply cannot go ahead with spending precious money on failed SOEs while this pandemic crushes our economy and plunges millions of South Africans even further into hardship. We have to cancel the R16.4bn bailout of SAA and immediately redirect this money to the economic support package,” Steenhuisen said last week.
SAA, which is placed under business rescue, has recorded net losses over the years.
Allocations were also made to Eskom in the Budget to the tune of R43.6bn to help service its debts.
The SABC was to receive another R1.1bn by the end of the month and arms manufacturer Denel was allocated R576m.
Meanwhile, DA MP Alf Lees has since written to SAA business rescue practitioners, Les Matuson and Siviwe Dongwana, urging them to immediately apply to court to liquidate the national carrier.
Lees said the complete lack of any urgency on the part of Matuson and Dongwana to get the business rescue plan approved was a clear indication that the entire business rescue process was a farce and has been so from the very beginning.
“Given the collapse of ticket sales income as a result of the Covid-19 pandemic, on top of the dire financial position of the airline, it would be immoral for the SAA creditors to grant the SAA business rescue practitioners yet another extension to submit their proposed SAA business rescue plan.
“Such an extension will simply delay the inevitable collapse of SAA and cause billions of rands desperately needed to deal with the Covid-19 pandemic to go down the drain,” he said.
.“It is unthinkable at a time like this to be bailing out failed SOEs while thousands of successful small businesses face ruin,” Lees said.