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Public Enterprises Minister Pravin Gordhan clashed with MPs for two consecutive days this week, where he was forced to defend the government’s decision to grant SAA a R10.5 billion ransom.
FILE: Minister of Public Enterprises Pravin Gordhan. Photo: Abigail Javier / EWN
CAPE TOWN – Public Enterprise Minister Pravin Gordhan responded to critics of the government’s plans to bail out struggling state entities such as South African Airways (SAA) and Land Bank.
Minister Gordhan clashed with MPs for two consecutive days this week, where he was forced to defend the government’s decision to grant SAA a R10.5 billion ransom.
On Thursday, the Democratic Alliance (DA) sponsored a debate on the rescue of bankrupt state companies, saying they had brought our country’s finances to the brink of ruin.
The opposition opposition prosecutor said that over the past 12 years, the government of the African National Congress (ANC) had spent R192.5 billion to rescue bankrupt state companies.
Geordin Hill-Lewis, the district attorney, said the government had pledged another 383 billion rand in state guarantees.
“Together, these bailouts and the guaranteed future bailouts have brought our country’s finances to the brink of ruin.”
But Minister Pravin Gordhan said the opposition was playing politics with state-owned companies, with some calling for their privatization.
“They have brought this debate purely to promote an ideological point of view, an ideological point of view that somehow, with a bit of swagger and hyperbole, is essentially saying that all entities that belong to the state should be privatized.”
Defending the bailout of parastatals like SAA, Gordhan said that some companies contribute substantially to GDP.
“It might interest us all to know that state companies contribute around 5% of GDP.”
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