The bad news of the medium-term budget has much to do with the effects of Covid-19, state capture and massive mismanagement by the State.
Higher Education, the National Prosecuting Authority, Policing, Housing and others are not receiving the necessary attention, while enormous bailouts are made to keep the defunct SAA flying.
The state airline will receives R 10 billion for its business rescue plan.
This is in addition to the R16.4bn over three years for its government-guaranteed debt.
OUTA is not in support of the SAA bailout.
“OUTA is extremely concerned about the allocation of R10.5bn to implement what we believe is an unworkable business rescue plan at SAA and believes it is extremely irresponsible.
We understand that debts need to be settled, but we cannot watch more precious tax revenue being wasted to revive a dying entity.
South Africans do have a voice, and as we united against e-tolls, we now call on South Africans to boycott the State controlled airline,” says Wayne Duvenage, OUTA CEO.
OUTA believes that SAA should be liquidated in a manner which has the least impact on the country. The staff should get reasonable retrenchment packages, but this airline should no longer be supported. South Africa has much bigger priorities than a state-owned airline.
The Land Bank, another failed SOE, also gets a bailout. The failing Nuclear Energy Corporation (NECSA), which is not financially accountable, takes money away from the electrification programme for the poor.
“The time is long overdue to cut such wasteful, loss-making SOEs. We had hoped to hear some announcement of the state exiting non-core SOEs such as SAA, Denel and others, to save the tax-payer from certain future bailouts,” said Duvenage.
The R10.5 billion bailout to SAA is funded by cuts from 41 departments, with Police losing R1.2bn, Higher Education R1.1bn, Health R694m, Transport R681m, Human Settlements R345m, Basic Education R276m, Justice and Constitutional Development R195m (this includes cuts to the NPA).