MTBPS: Minister Godongwana sticks to 'tough love' theme on limiting support to SOEs
The National Treasury says despite several notable operational improvements, such as Eskom, most major SOEs continue to post net losses and fall short of performance targets.
FILE: Finance Minister Enoch Godongwana. Picture: @TreasuryRSA/Twitter
CAPE TOWN - Finance Minister Enoch Godongwana has stuck with his “tough love” theme as the National Treasury limits further financial support to state-owned enterprises (SOEs).
However, the National Treasury acknowledges that the financial condition of major SOEs remains “distressed”.
It says despite several notable operational improvements, such as Eskom, most major SOEs continue to post net losses and fall short of performance targets.
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The National Treasury says state entities still can't fund their operations and debt obligations adequately.
SOEs are likely to continue to face high borrowing costs as poor governance and operations limit their funding, it adds.
Godongwana told a pre-budget media briefing on Wednesday morning that SOEs like the South Africa Post Office won’t receive a dime in the budget despite their financial distress.
"I said, tough love. I think we’re on that path of making sure that not every SOE is going to say we want money. By the way, they told us D-day for the post office is today and there’s no money in the adjustment as we speak."
Godongwana said bailouts have cost the government about R520 billion since 2009, and most of that money had to be redirected from other programmes like social services, the army and the police saying this is not sustainable.