MTBPS2020: SAA bailout at the expense of safety, dignity and jobs

29 October 2020

What is clear from the Minister of Finance, Tito Mboweni’s, Medium-Term Budget Policy Statement, tabled today in the National Assembly (28 October 2020), is that our provincial budget has been cut by a further R1,47 billion in this financial year in the Western Cape.  

What is worse, is that our biggest fear was confirmed - provincial budgets have been cut to fund the R10.5 billion bailout of South African Airways (SAA).

To fund this bailout, the Western Cape provincial budget has been cut by R86.61 million in this financial year through cuts to conditional grants as follows:

- A cut of R30.01 million to the National Tertiary Services Grant which is critical to us maintaining and developing healthcare services at our tertiary hospitals such as Groote Schuur, Red Cross War Memorial Children's Hospital and Tygerberg Hospital,

- A cut of R23.32 million to the Title Deeds Restoration Grant which is critical to our project to restore dignity to the elderly, those with disabilities and backyard dwellers through the transfer of land ownership in the Western Cape, 

- A cut of R19.72 million to the HIV, TB, Malaria and Community Outreach Grant which is critical to delivering an immediate and effective response to diseases such as TB, HIV and malaria in the Western Cape,

- A cut of R11.51 million to the Statutory Human Resources, Training and Development Grant which is critical to the clinical training and supervision of our health science trainees and the increased capacity of our healthcare workforce in the Western Cape, 

- A cut of R1.04 million to the Comprehensive Agricultural Support Programme Grant which is critical to providing effective agricultural support services to smallholder and black commercial farmers, promoting and facilitating agricultural development by targeting beneficiaries of land reform, restitution and redistribution in the Western Cape.

- A cut of R492 000 to the Ilima/Letsema Projects Grant which is critical to reducing poverty and supporting food security by investing in infrastructure that assists vulnerable farming communities to increase their production output in the Western Cape,

- A cut of R453 000 to the Mass Participation and Sport Development Grant which is critical to the well-being and health of our communities by facilitating participation in sport and recreation activities in the Western Cape, and

- A cut of R60 000 to the Land Care Programme Grant: Poverty Relief and Infrastructure Development which is critical to supporting food security by working with communities to sustainably manage natural resources for agricultural production in the Western Cape.

Which means that the bailout for SAA will clearly compromise our healthcare services and the well-being and dignity of those living in the Western Cape by de-funding critical projects that provide food security, that support ownership of property and land transformation and that create jobs in the Western Cape.

However, there were some positive notes from today’s adjustment budget, in particular commitments to immediate food relief for poor households, support for Early Childhood Development Centers and support for job creation initiatives through the Provincial Roads Maintenance Programme.

But at the end of the day, the bailout to SAA is unjustifiable and simply wrong.  

Where will national government draw the line when it comes to SOEs? By opening this door, National Treasury has opened the door to further bailouts which can now only come at the expense of the safety, dignity and jobs of those living in the Western Cape and South Africa. 

We also remain concerned by the decision by National Treasury to move from a 3-year to a 5-year debt stabilisation path which means that there is an elevated risk of a debt default over the medium term in South Africa. 

We will not go down without a fight, and will continue to do everything possible to oppose budget cuts that risk compromising frontline service delivery in the Western Cape.

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), 28 October 2020