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The minister said Thursday that he was surprised by what he called “the lack of financial education and understanding of government processes.”
Pravin Gordhan. Photo: Abigail Javier / EWN
JOHANNESBURG – Public Business Minister Pravin Gordhan reacted to widespread criticism from political parties and taxpayers over the government’s decision to inject another R10.5 billion into South African Airways (SAA).
Gordhan said Thursday he was surprised by what he called “the lack of financial literacy and understanding of government processes.”
“The minister is dismayed and disappointed with the Democratic Alliance (DA), other parties and the lack of knowledge, financial knowledge and understanding of the governance processes of some analysts. Worse still, the Prosecutor’s Office ignores the suffering of SAA employees and the threat of losing their jobs, ”said the spokesman for the Department of Public Enterprises (DPE), Sam Mkokeli, in a statement.
He added: “To hide their knowledge of the aviation industry and its economics, DA and its partners manipulate the facts to fabricate misconceptions about SAA.”
The DPE said that this money was necessary to conclude the business rescue plan and, without this obligation of the taxpayer, it would cost almost double to liquidate the airline at a cost of R18.5 billion.
• READ: SAA finances the fulfillment of an obligation as a SAA shareholder, says Mboweni
The money will be taken from the national, provincial and local government.
“The Ministry believes that the completion of the corporate rescue process is the only viable alternative to a viable and sustainable domestic airline, one that supports job preservation and the ability to bring the airline back from the edge to a position where employees, suppliers and business partners can continue to contribute to the South African economy and its integration into the global economy, ”said Mkokeli.
In a three-page document, the DPE describes why this money is needed to finalize the business rescue plan for SAA.
Gordhan believed that finalizing the plan was the only option. But many are not in favor of this decision, like the executive director of the Undoing Tax Abuse Organization (Outa), Wayne Duvenage, who said that this money could have been used to help citizens elsewhere.
“Outa is extremely concerned about the allocation of R10.5 billion to implement what we believe is an unfeasible corporate rescue plan at SAA and believes it is extremely irresponsible. We understand that debts must be paid off, but we cannot see more valuable tax revenue being wasted to revive a dying entity, ”Duvenage said in a statement.
“South Africans have a voice, and as we stand together against electronic tolls, we are now calling on South Africans to boycott the state-controlled airline.”
The unions representing SAA staff, however, defended this payment by asking taxpayers for another chance.
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