DA calls for full scale review of all SOEs following Denel woes 

26 June 2019

The Minister of Public Enterprises, Pravin Gordhan’s announcement in Parliament on Tuesday that a ‘lender’ would pay the remaining 15% of salaries, following revelations that Denel was only able to pay  85% of salaries to its staff for the month of June, is merely a temporary bandage for an entity that is on the brink of collapse.

This unidentified lender, is not a ‘get-out-of-jail-free-card’ but a temporary reprieve. Denel, like other state-owned entities(SOEs), is circling the drain and continues to be plagued by numerous legacy issues that have resulted from years of state capture, mismanagement and graft.

A complete overhaul is required to address the myriad of troubles facing our SOEs. The Democratic Alliance (DA) will therefore write to Minister Gordhan to deal decisively with dysfunctional SOEs by instituting a full-scale review of all state entities.

South Africa has hundreds of SOEs, many of them are either completely dysfunctional, bankrupt, or frankly serve no purpose other than lining the pockets of the connected few. Many of the hundreds of SOEs also duplicate functions and should simply not exist in the first place. They are sucking money from the fiscus and pose a great threat to the South African economy. From bailouts to guarantees, government has risked billions on unproductive and inefficient parastatals.

Now is not the time to throw money at the problem, now is the time to trim the fat. We cannot afford to continue with the status quo, where a government spends billions on bailing out SOE’s instead of spending money on job creation initiatives and service delivery.

SOEs require strong leadership, proper oversight from Parliament and accountability structures that are up to the task, to improve the quality of governance in our SOEs. This will encourage a greater volume of financiers to invest in them ensuring that SOEs work for all South Africans.

We need to stop the continued misuse of SOE’s for political gain.The DA is prepared to work with the ANC government in order to review South Africa’s SOEs and to make them profitable, stimulating job creation and getting South Africa back to working.

Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 26 June 2019