SOE-bailouts fuel heated debate in Parliament
The National Assembly has on Thursday debated the financial burden of sustaining non-profitable parastatals and how government can re-appropriate funding.
CAPE TOWN – State-owned entities (SOEs) have again come under the spotlight in Parliament with opposition Members of Parliament (MP) criticizing multi-billion-rand bailouts.
The National Assembly has on Thursday debated the financial burden of sustaining non-profitable parastatals and how government can re-appropriate funding.
The debate was sponsored by the Democratic Alliance (DA).
The debate comes after Finance Minister Tito Mboweni recently announced in his medium-term budget that South African Airways (SAA) would be allocated a R10.5 billion obligation.
Public enterprises minister Pravin Gordhan also told the Standing Committee on Public Accounts (Scopa) on Wednesday night that the airline would probably need more money.
DA MP Geordin Hill Lewis said continued bailouts have brought the country’s finances to the point of ruin and were unjustifiable.
“Over the last 12 years, the ANC [African National Congress] government has spent R192.5 billion bailing out bankrupt state-owned companies. In addition to that, they have committed the government to a further R383.2 billion in state guarantees. These guarantees are bailouts by stealth.”
Economic Freedom Fighters MP Sinawo Tambo defended SOEs, saying they should remain under state control.
“SOEs ought to be understood as a vehicle for building state capacity and maintaining the nation’s capacity to determine its own affairs. It is for this reason that we must reject the DA’s attempt to defund SOEs in a quest to return to a colonial nation.”
The ANC’s Khaya Magaxa said most SOEs were badly affected by corruption and state capture - and will soon turn the corner.
