Raid on Post Office to establish Postbank must be stopped

Issued by Dion George MP – DA Shadow Minister of Finance
11 Nov 2022 in News

Last night, members of the Standing Committee on Finance received an urgent letter, dated 9 November 2022, addressed to the Committee Chairperson, from the Chairperson of the Portfolio Committee on Communications and Digital Technologies, Boyce Maneli.

In his letter, Mr Maneli requests an urgent intervention for a “financial injection” into the South African Post Office (SAPO). He requests this bailout to “assist in finalizing the Postbank Amendment Bill, which is likely to have a negative impact on the financial sustainability of SAPO”. Essentially, the ANC government wants to quietly separate the existing Postbank from the SAPO for it to become the State Bank as the party’s policy conference resolved to establish.

As the ANC heads to its elective conference in December this can be seen as a last-ditch effort by current party leaders to be seen addressing ill thought out yet unresolved resolutions from its previous conference. To achieve this objective, the current limited operation of the Postbank must be expanded for it to provide a full range of services, including loans. The proposed bill attempts to create a fully-fledged bank that operates outside of the prudential regulations that are applicable to other banks.

A letter from the Portfolio Committee on Communications and Digital Technologies dated the 4th of November requests the Finance Committee to “peruse the Bill for the concurrence”. This letter was not circulated to the committee. The committee has therefore not considered the Bill and it would be illegal for the process in the PC committee on Communications to proceed.

The ANC’s objective here is therefore to operate an unsupervised bank, that will enable it to further enrich its political cronies and keep patronage networks afloat. The only obstacle now, is funding the establishment of the Bank. Minister of Finance, Enoch Godongwana, has stated that no funds are available for the establishment of a State Bank. To circumvent this uncomfortable truth, the Minister of Communications and Digital Technologies, Khumbudzo Ntshavheni, has apparently agreed with the Minister of Finance that, given the current Postbank falls within legislation in her Department, the Bill does not need to be processed in the Finance Committee. We disagree

Another uncomfortable truth is that the separation of the Postbank as a subsidiary of SAPO brought about a further decline in the net asset value of SAPO.

It is very clear that a lot of money will be required to enable the new expanded Postbank to be established, and that would require an appropriation via a Money Bill, that only the Minister of Finance can introduce. Hence the request for an urgent bailout to the SAPO as the Postbank is separated. This will enable the limited funds currently available at the SAPO to establish the new Bank.

The DA has made several requests for the Bill to be considered by the Finance Committee, without any response. It is clear that this is merely an attempt by the ANC to great a bank for itself, to raid.

In his mid-term budget, the Minister mentioned “trade-offs”. In this instance the tradeoff is between the establishment of an expanded service Postbank and the total collapse of the SAPO, and the ANC government must decide which option it prefers.

The DA will not support the expansion of the Postbank and will not support any further bailouts. The Post Office can only become viable if prudent action is taken, to fix the broken business model that has caused every other State-owned Enterprise to fail.

A private sector partnership would enable the SAPO to become more efficient and financially viable. Instead of creating a State Bank that will no doubt be raided, government should focus on alleviating the plight of hungry South African households, 81% of which have reduced the amount of food they are able to put on their tables as the cost of living spirals upward, in the wake of the ANC government’s incoherent economic policy.