MEC David Maynier on bailout of state-owned airline South African Airways

21 October 2020

We are concerned that provincial budgets will be raided to fund the R10.5 billion to bailout zombie state-owned airline South African Airways (SAA).

So, last week I wrote to the Minister of Finance, Tito Mboweni, to raise my concerns about the decision by national government to provide yet another bailout to SAA, saying:

“In this context, where provincial service delivery has been significantly compromised by budget cuts over an extended period of time, coupled with the possible enforcement of the current wage agreement, the decision to provide another bailout to South African Airways (SAA) is entirely unjustifiable and deeply frustrating to our efforts to protect frontline services.”

While we can’t know for certain if this will be the case, and if so, how large the cuts will be, we do know what we would have to sacrifice if provincial budgets are raided.

We would have to sacrifice:

Critical school maintenance;

More teachers in our classrooms; 

More law enforcement officers on our streets; and

More housing opportunities for our residents.

The decision to bail-out SAA is entirely unjustifiable and could be deeply frustrating to our efforts to protect frontline services if the bailout is passed on to provincial and local governments. 

In my letter, I have argued strongly that provincial and local budgets, and conditional grant funding must be ring-fenced from any cuts to bailout SAA. 

We should not have to compromise service delivery, and take money out of the mouths of the poor, to bailout a zombie state-owned airline like SAA.

Issued by Francine Higham, Spokesperson for the Provincial Minister of Finance and Economic Opportunities (Responsible for the Provincial Treasury and the Department of Economic Development and Tourism), 21 October 2020