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While South African Airways (SAA) will get R4.3 billion this year and Eskom more than R31 billion, this was money that was allocated in previous budgets and cannot be classified as new bailouts.
Finance Minister Tito Mboweni delivers his budget speech in Parliament on February 24, 2021. Image: GCIS.
CAPE TOWN – Finance Minister Tito Mboweni gave the talk about his promise to stop bailouts of state entities (SOE).
In its 2021 budget presented on Wednesday, the conflicting Land Bank was the only state-owned company to get a financial lifeline, amounting to R7 billion over the next three years.
While South African Airways (SAA) will get R4.3 billion this year and Eskom more than R31 billion, this was money that was allocated in previous budgets and cannot be classified as new bailouts.
FULL SPEECH: 2021 Budget by Tito Mboweni
In the briefing after his speech, Minister Mboweni was asked how he could justify giving the SAA more money while cutting social grants.
His answer was short and direct: “There is no allocation in this budget for SAA, and we have not cut social subsidies, so the question does not apply, really.”
Mboweni said at the briefing that SAA’s business rescue professionals have asked for R3.5 billion, but this has yet to be questioned.
“We have not reached that stage yet, but in this budget, this year, there is no provision for SAA.”
The provision of social assistance has not been drastically cut, but it is true that the beneficiaries will obtain an increase below inflation, so that in real terms, those who depend on the aid will have less money to spend.
“The assignments that were made is what we could afford, in general, if you look at social services, they take up about 56% of the assignments. That is quite substantial, in a country like ours, given the nature of the budget ”.
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