Mixed reaction to Mboweni’s SAA payday
Finance Minister Tito Mboweni’s decision to hand more money to some state-owned enterprises has been met with mixed reaction.
On Wednesday Mboweni told the National Assembly that Treasury would inject an additional R7 billion into the Land Bank and R10.5 billion into South African Airways (SAA).
The embattled national carrier is tethering on the brink of collapse.
SAA business rescue practioners approached government for more funding to help undertake the airline’s business rescue plan.
The Congress of South African Trade Unions (Cosatu) welcomed the latest bailout.
“We accept the allocation to South African Airways. We need the aviation sector, we cannot shutdown a sector of the economy at a time when our economy is in decline. We need to make sure that all of the sectors are given the necessary support,” said Cosatu spokesperson Sizwe Pamla.
“We are hoping that now we will have sober discussions about what kind of partnership we need and how we put this airline on a sustainable growth path.”
He admitted government would still have to develop funding models to make SOEs self-sustainable.
"The big challenge we are going to have is for government to keep referring to these resource allocations as bailouts, they’re not. They are actually the only funding model that government has because it has not developed funding models,” Pamla added.
Listen to Pamla below:
Meanwhile the Organisation Undoing Tax Abuse (Outa) says the bailout makes it hot under the collar.
“We’re forking out too much money. The bailouts that they’re talking about are not enough anyway,” said Outa spokesperson Wayne Duvenage.
The civil organisation has called on South Africans, tourists and businesses to boycott the airline.
“South Africans need to make a choice now if they’re going to support irrational decisions by the state, they have power, this is a consumer decision, and they must exercise that power.
“So we’re talking about the travel industry, international, local businesses, everybody – stop flying SAA and that will send a strong message that they are making the wrong decision,” Duvenage added.
He believes there are no reasonable prospects for saving the airline.
Listen to Duvenage below:
