Politics

Government spent nearly R200bn on SOE bailouts in 20 years: Mboweni

Government spent nearly R200bn on SOE bailouts in 20 years: Mboweni

The government has spent R187bn bailing out and recapitalising state-owned entities (SOEs) over the past two decades.

This was revealed after the DA asked finance minister Tito Mboweni in a parliamentary question: "What is the total cumulative amount of money spent on bailouts for state-owned entities since 27 April 1994".

The party also asked if he could provide a breakdown of the total cumulative amount spent on bailouts for Eskom, South African Airways (SAA), Denel, the Passenger Rail Agency of SA (Prasa), PetroSA, the SA Broadcasting Corporation (SABC), the South African Post Office and Transnet since April 27 1994.

Mboweni wrote in his reply that the information dating back to 1`994 was not available. However, the cumulative sum spent on state-owned entities (SOE) recapitalisations and bailouts between 2000/01 and 2019/20 amounted to R187.4bn.

A breakdown of amounts spent annually on bailouts and recapitalisations from 2000/01 on SOEs was provided in an annexure.

He said in compiling the data, the National Treasury followed Standard Chart of Accounts economic classifications, which are used by departments and provinces to classify their transactions, and focused on the classification for “payment of financial assets”.

He said this excluded indemnities, guarantees and other contingent support provided to SOEs during this time that may be interpreted as a bailout. 

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The figures provided by Mboweni showed that guarantees by the government were R481bn.

DA MP Geordin Hill-Lewis said the reply showed the truly staggering amount of money that the public had paid for failing SOEs over the years.

"And what has been the return? Eskom is failing, Transnet is failing, SAA is bankrupt, Prasa cannot run the trains, Land Bank has defaulted. Every one of these has been broken by ANC cadre deployment and corruption," he said.

He said this was why the DA had argued that these SOEs should be sold, and the long-suffering public spared having to pay enormous sums any longer.

"Many of these companies provide services that the government does not even need to provide. Why should the public pay for SAA when there are many perfectly successful and competitive alternative airlines that don’t use a cent of public money?

"It doesn’t make sense. This is just an ANC obsession with control, and a refusal to accept that the idea of 'state-led' development has failed."

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