SA’s gold & foreign exchange reserves not a ‘blank cheque’ to be used by govt, say MPs and trade unions

CAPE TOWN – Members of Parliament (MPs) and trade unions have warned government against using the country’s gold and foreign exchange reserves as a “slush fund”.

They said it should not be an open cheque book where government can access funds at a whim to pay off things like debt.

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MPs, the Congress of South African Trade Unions (COSATU) and economists were taking part in public hearings on the Gold and Foreign Exchange Contingency Reserve Account Defrayment Amendment Bill on Friday.

They also questioned the origins of the idea to use the contingency reserve, which stands at R500 billion.

Announcing the decision to access R150 billion from the contingency reserve last month, Finance Minister Enoch Godongwana also introduced the amendment bill, which must still be passed by the National Assembly and National Council of Provinces (NCOP).

On Friday, economists and labour unions made submissions at public hearings during a joint meeting of the Standing Committee and Select Committee of Appropriations.

COSATU Parliamentary Coordinator Matthew Parks said, “We also want to say that this isn’t a slush fund. We support the kind of common-sense approach by government, and how this money can be used strategically to ease the fiscal pressures."

Standing Committee of Appropriations Chairperson Sfiso Buthelezi also warned against abusing the strategic reserves.

“I can’t agree more with honourable members who are saying this should not be a blank cheque, there should be some criteria.”

The committee also heard how it was still unclear where the idea to draw down on the R150 million came from, and whether it was politically driven.