Billions into SAA black hole a worry

Finance Minister Tito Mboweni missed a massive opportunity to draw a line in the sand after approving a R10.5 billion bailout for the SA Airways in his medium-term budget policy statement in parliament yesterday.

The national airline, awarded a R16.4 billion bailout from government in February, will now get the money for its restructuring as part of its business rescue plan. SAA was placed under administration in December following years of mismanagement. Yet another bailout is naturally concerning, but even more worrying is where the money comes from.

Essentially, the bailout has been funded from money previously allocated for education, policing and healthcare. Taking money from education is particularly disconcerting because it’s in this sector that President Cyril Ramaphosa said jobs would be created in a bid to support the knock the industry took due to Covid-19.

When will the bailouts stop? How much more money must be thrown into the bottomless pit that is SAA? A small positive from yesterday was that no further funds were allocated to other state-owned enterprises – the SABC, Post Office and Denel. Another bombshell was that government is borrowing at a rate of R2.1 billion per day and that our debt will probably rise to R5.5 trillion by 2024.

It’s escalating quickly into a debt crisis and our children, and our children’s children, are going to be paying off debt for decades to come. It can’t be easy being the finance minister during a pandemic. Mboweni must be applauded for proposing a public sector “wage freeze” for the next three years.

He will no doubt receive plenty of resistance from trade unions, but it’s a decision that has to be taken if we are to recover. In Mboweni’s words, “we are poorer and more indebted than before”. We live in anxious times.

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