SOE bailouts un­think­able at this time of cri­sis – DA

Pretoria News - - NATION - MAYIBONGWE MAQHINA [email protected]

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.

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