Just one week after the Minister delivered his mid-year adjustment budget comes the startling news that government wants to gamble with hard earned taxpayer money by establishing yet another state-owned enterprise (SOE) in the form a national shipping carrier. This in addition to government’s will of funding a Post Bank that is to also be capitalized with taxpayers’ money.
After delivering his “tough love” maiden speech as the new Minister of Finance, Mr Godongwana assured South Africans that he would not tolerate the endless bailouts to failed SOEs and he would take a stand. As expected, his stance never lasted long.
By tabling a Bill with his MTBPS to give R30 billion in bailouts to the failed state enterprises Denel, Transnet and SANRAL, the Minister is effectively incentivising bad management and corruption. Although he mentioned that strict conditions would be attached to the bailouts, no mention was made of what they are, and they are unlikely to ever be implemented.
The Minister also took it upon himself to, in the coming months, transfer upwards of R200 billion in debt from Eskom to the national balance sheet – increasing the load on an already overburdened tax base.
In addition to establishing a “super” state owned enterprise to operate as a holding company for the other SOEs and another utility company to compete with Eskom, government now wants to experiment with taxpayer money by funding a state bank and a shipping line. This is delusional, and the Minister is silent on where the funds will come from.
The Minister is either so out of touch with the realities of South Africa’s fiscal position, or he is unable to hold the financial line within his party. Either way, this is a clear indication that the ANC government intends to press on with its model to position the state at the centre of our economy. This despite the clear evidence that, as an incapable and woefully corrupt institution, it has been unable grow our economy. Instead, it gets in the way of the growth that we could achieve.
Amidst a cost of living crisis, rising debt levels, unsustainable deficit spending, devastating unemployment rates and deteriorating service delivery South Africans have had enough with the uncaring ANC Government.
The DA calls for the Minister to abandon the disastrous SOE funding model and reprioritise funds to serve the needs of the most vulnerable in our society by increasing the zero-rated VAT food basket and cutting the fuel levy.