Gordhan hits back at critics of govt plan to bailout SOEs
Public Enterprises Minister Pravin Gordhan faced-off with MPs for two consecutive days this week, where he was forced to defend government’s decision to give SAA a R10.5 billion bailout.
CAPE TOWN - Public Enterprises Minister Pravin Gordhan has hit back at critics of government plans to bailout struggling state-owned entities like South African Airways (SAA) and the Land Bank.
Minister Gordhan faced-off with MPs for two consecutive days this week, where he was forced to defend government’s decision to give SAA a R10.5 billion bailout.
On Thursday, the Democratic Alliance (DA) sponsored a debate on the bailing out of failing SOEs, saying that these had brought our country’s finances to the brink of ruin.
The opposition DA said that over the past 12 years, the African National Congress (ANC) government had spent R192.5 billion bailing out bankrupt SOEs.
The DA's Geordin Hill-Lewis said that government had committed a further R383 billion in state guarantees.
"Together these bailouts and guaranteed future bailouts have brought our country's finances to the brink of ruin."
But Minister Pravin Gordhan said that the opposition was playing politics with SOEs, with some calling for their privatisation.
"They've brought this debate purely to advance an ideological standpoint, an ideological standpoint must in some ways, with a bit of bluster and hyperbole, is essentially saying that all entities that belong to the state should be privatised."
Defending the bailout of parastatals like SAA, Gordhan said that some companies contribute substantially to GDP.
"It might interest all of us to know that SOEs contribute about 5% to GDP."