COPE leader Mosiuoa Lekota says the government is making a fatal mistake by continuing to bail out state-owned enterprises.
Lekota was responding to Finance Minister, Tito Mboweni’s Medium-Term Budget Policy Statement in parliament.
Mboweni says in order to meet unanticipated cash needs; they have brought forward R26-billion for Eskom in 2019/20 and R33-billion in 2020/21 as well R10-billion in 2021/22.
Lekota says SOEs continue to be a huge drain on the fiscus.
“When he begins to say we will no longer give you bailouts you must borrow the money and invest it productively so that you can pay your debts and so on now that is the right step to go in instead of keep giving free money. The purpose for state-owned enterprises is so that they make profits and contribute to the fiscus. If they are no longer making profits close them down.”
Cosatu fears that government may set its sights on ordinary public servants in its drive to reduce the wage bill.
Mboweni said that the number of public servants earning R1-million a year has doubled in the last three years.
After adjusting for inflation the average government wage has risen by 66% in the last 10-years.
Minister Mboweni said things needed to change so that South Africa could return to a path of robust economic growth.
Cosatu’s first deputy president, Mike Shingange says workers are not to be blamed for the economic choices of government.
“It’s not at the service delivery or front line departments, in nurses, in home affairs, in justice police, that’s not where the public servant wage bill is bloated by the way. But when you go a bit up, of course, that is where something needs to be done. It is not correct that when the economy is not doing well as the private sector you rush for the workers. They are the ones to be blamed while they are not responsible for the economic choices that we make as government.”
Meanwhile, the ANC says it supports the measures outlined in the Medium-Term Budget Policy Statement that was presented in Parliament.
In a statement, the governing party says it welcomes the commitments made to stimulate the economy, infrastructure development and to assist state-owned enterprises.
The ANC also says it notes the measures outlined to reduce expenditure across all spheres of government and welcomes the reduction of fringe benefits that include fancy cars for political office bearers.
ANC Spokesperson Pule Mabe says, “The ANC welcomes the medium-term budget policy statement of the Minister of Finance Tito Mboweni. It comes at a difficult time in our nation. The third-quarter employment figure released by Stats-SA just shows an increase in the unemployment rate. The Medium-Term Budget Policy Framework captures the ANC’s 2019 manifesto commitment to ensure that it addresses the economic challenges facing the country.”
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