AfriForum on budget speech: Bailouts and NHI remain concerning
20 February 2019
Finance Minister Tito Mboweni’s budget speech for the 2019/2020 financial year indicates an attempt to rescue South Africa’s floundering economy, as well as state-owned enterprises. According to AfriForum, bailouts (among others to Eskom) and the financing of the proposed National Health Insurance scheme (NHI) – will tighten the noose around taxpayers’ necks even more.
State-owned enterprises, including Eskom
Treasury revised their contingency reserve upwards to R13 billion to respond to state-owned enterprises’ requests for financial funding. AfriForum welcomes the Minister’s announcement that the application process for financial support will be much more stringent this year “However, it remains concerning that taxpayers will once again have to foot the bill for the mismanagement of state-owned entities,” says Natasha Venter, spokesperson for AfriForum.
Mboweni’s announcement that the debt-laden Eskom will receive a bailout of R69 billion over three years (R23 billion per year) is worrying. Mboweni announced that Government will not be taking on Eskom’s debts as its own and that the bailout to Eskom is contingent on the appointment of an independent person responsible for the restructuring of the power utility. “However, it remains unfair that taxpayers are once more held accountable for the massive levels of mismanagement at Eskom, especially as Eskom recently applied for a tariff increase,” says Venter.