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A South African Airways plane.
Silas Stein / Picture Alliance via Getty Images
- Minister Tito Mboweni found himself defending the R10.5 billion allocation to South African Airways, insisting it was not a ransom.
- The Chairman of the Select Committee on Appropriations, Dikeledi Mahlangu, said the movement of funds from other departments and functions to the SAA must not infringe the rights of poor and vulnerable South Africans.
- Mboweni reminded MPs of the dire situation the South African economy was in, referring to the decline in revenue of R332 billion.
Finance Minister Tito Mboweni found himself in the crosshairs of parliamentarians when he once again found himself defending the allocation of R10.5 billion to the business rescue process of the troubled national airline, South African Airways.
Faced with an avalanche of questions from members of the opposition party, he insisted during Thursday’s virtual plenary that the allocation to the SAA in the medium-term budget policy statement (MTBPS) was not a “rescue” but rather sought to facilitate the business rescue process in the airline.
“This is not a bailout because the allocation is made for the business rescue professional plan. It is not for the entire SAA. If you look carefully, the subawards show a provision for downsizing costs, missed tickets, commitments , etc., “he said.
Members of Parliament at the NCOP expressed doubts about the allocation announced at MTBPS last month, saying that the movement of funds from other departments and functions to the SAA should not infringe on the rights of the poorest and most vulnerable.
“The National Treasury and COGTA should conduct assessments of service delivery standards on the ground in terms of changes in allocations to assist SAA. Poor and vulnerable South Africans could be and may be affected. This should include measures to mitigate the negative impact, “said Select Appropriations Committee Chairman Dikeledi Mahlangu.
Several departments lost some funds so SAA could get R10.5 billion, including the Department of Basic Education and the Department of Defense and Military Veterans.
Mboweni reminded MPs of the dire situation the South African economy was in, referring to declining revenues of R332 billion, which meant that South Africa’s projections compared to expectations in February were worse than expected. originally.
“We are not as rich as we thought we are anymore. In fact, there are a number of things that we will have to reduce because we simply cannot pay them. We need to reduce the debt / GDP ratio and of course some of that growth of the economy and structural reforms, ”Mboweni said.
‘It’s not my own private decision’
Regarding continued assistance to state entities, which he has openly opposed on other platforms, Mboweni simply said: “The responsibility of the finance minister is to implement cabinet decisions. It is not my private decision.”
Democratic Alliance MP Dennis Ryder made an immediate exception to the SAA allocation, saying the provincial and local spheres of government had to pay the price, in the form of a more than 51% reduction in the infrastructure development fund. regional in Gauteng, among other things. .
“This project could not have been delayed by closure, as the entire value chain fell under essential services. Imagine my disappointment and anger when Hacienda told us that the money originally allocated had been withdrawn from the human settlements department. , water and sanitation had no plan, “Ryder said.
Ryder said it was unfair that an efficiently run province or municipality had to bear most of the 25.3 billion rand cuts in the provincial government’s allocation because one national government was unable to prevent large-scale corruption throughout. one of each.
‘Crazy dreams’
“It seems, Minister, that you have run out of ideas to continue financing the crazy dreams of your Cabinet colleagues. That unless you start winning some of those battles, this country is destined for the status of a banana republic. The developmental state it has become a survivor state, “Ryder said.
African National Congress deputy Yunus Carrim questioned Ryder’s claim that South Africa was ill-equipped and ill-prepared to absorb the shocks of the Covid-19 pandemic, looking for examples in the developed world of economies that were hit hard.
“Ryder makes a big deal about the fact that this lockdown was overdone, but in the rampant free market economies that he loves so much, if what I’ve seen in the news is correct, the UK is expected to have a growth rate of – 11.2% next year. That’s worse than us, “Carrim said.
While Carrim jumped to Mboweni’s defense, he also acknowledged that provincial governments are right to question why they are being forced to bear the brunt of reprioritization amid the pandemic.
“Equitable participation must be reviewed in a more comprehensive way, particularly as it relates to municipalities. No one predicted the destructive effects of Covid-19. There must be a review, given that the pandemic and its impact will persist,” He said Carrim.
