Government Pension Fund at risk to bail out tumbling SOEs

Issued by Alf Lees MP – DA Shadow Deputy Minister of Finance
23 May 2017 in Speeches

The following speech was delivered in Parliament today by DA Shadow Deputy Minister of Finance, Alf Lees MP, during the Budget Vote on National Treasury.

Madam Speaker,

Our state-owned entities (SOEs) are fiscal blood-sucking leeches on society. It matters not which entity you look at – there is at best financial wastage or at worst simple greed and corruption.

Over the last five years South African Airways (SAA) has lost a staggering R15.7 billion.

This is so much money that it is difficult to conceptualise. But Iet me try.

SAA is a small entity run by an ineffectual and Zuma-aligned board which has, in five years, thrown away enough money to: build 628 clinics; build 449 schools; fund three-year-bursaries for 65 000 undergraduate students; build 130 000 RDP houses; or fund an extra 80 000 nurses at public hospitals.

And so the list goes on.

SAA is insolvent and yet it is allowed to continue trading.

No, SAA is not just allowed to carry on trading at massive losses of R4.8 billion in the 2016/17 year just ended, but is encouraged to do so with taxpayer backed bailout loans that now amount to R19.1 billion.

The same drain on national fiscus is evident whether one looks at Eskom or the Post Office or Transnet or Petro SA or just about any other state owned entity.

Our country’s taxpayers have been forced to advance guarantees, which now amount to R477.7 billion to state owned entities. This is equivalent to 37% of the estimated revenue for the 2017/18 financial year.

This high exposure to the debt of loss-making SOEs is frightening and Minister Malusi Gigaba is clearly lining up the Public Investment Corporation (PIC) for a raid on its R1.8 trillion Government Employee Pension Fund (GEPF) to bail out SAA and other SOEs.

It is a sickening thought that the ANC-government can even contemplate putting government pensioners at risk and yet that is exactly what they would be doing.

Minister Gigaba please tell us today whether or not you and your ministry are considering the funds of pensioners administered by the PIC as a source of funding for SOEs.

Chairperson,

There are too many SOEs. Some must be liquidated and others, like SAA, must be privatised.

The DA is the only party capable of managing public funds efficiently and effectively – to the benefit of all our people, not just the seemingly corrupt and captured ANC cadres.