Nothing to show for billions spent on bailing out state companies, says DA

ANC government's financial support of SOEs 'has brought financial ruin to SA'

Andisiwe Makinana Political correspondent
The DA says that after spending mountains of money on SOCs, Transnet cannot run a railway network, Eskom cannot produce enough electricity, SAA cannot fly, Denel is insolvent and the Land Bank has defaulted.
The DA says that after spending mountains of money on SOCs, Transnet cannot run a railway network, Eskom cannot produce enough electricity, SAA cannot fly, Denel is insolvent and the Land Bank has defaulted.
Image: SAA

The DA has come down hard on the ANC government for its continued financial support of failing state-owned enterprises, which the party says have brought financial ruin to the country.

DA MP Geordin Hill-Lewis was speaking on Wednesday during a parliamentary debate on the financial burden of sustaining unprofitable state-owned entities, and how the government can reappropriate the continual bailouts used to sustain these entities.

He said that over the past 12 years, the government has spent R192.5bn bailing out bankrupt state-owned companies (SOCs). In addition to this, they have committed the government to a further R383.2bn in state guarantees, he said.

“These guarantees are bailouts by stealth because, of course, these companies have no ability to repay these loans, and so eventually they will be repaid by the public. They should better be called ‘guaranteed future bailouts’,” said Hill-Lewis.

He said these bailouts and guaranteed future bailouts had brought the country’s finances to the point of ruin.

“We have paid for this all with mountains more debt, and what do we have to show for it? Transnet cannot run a railway network, and train tracks are being stolen from right in front of them. Eskom cannot produce enough electricity. SAA cannot fly. Denel is insolvent. The Land Bank has defaulted," he said.

Hill-Lewis described as an astonishing admission finance minister Tito Mboweni's statement last week that SA's economy was back in the same financial position that the ANC inherited at the end of apartheid.

“Three decades obliterated,” said Hill-Lewis. “I genuinely feel sorry for ANC members. I’m sure at one point some joined the ANC wanting to do good, to change South Africa for the better. And now they have to defend the comprehensive disaster that is the ANC’s legacy in government."

Hill-Lewis wondered why the ANC persisted “with that which has so obviously and utterly failed”.

“Why does the ANC persist in the propping up of state-owned companies whose failure is so large that it threatens the very continuity of the state? On the face of it, this is pure insanity.”

He said one of the reasons was that the governing party sees itself and the state as the same thing and linked to this was the ANC’s historical core belief that it alone was the source of progress in society, and that it has a total monopoly on truth.

“What we say is true and good, for no other reason than because we say it”.

He claimed the party no longer even tried to mount arguments in favour of the SOEs or make a case for why SAA should be bailed out, because they know it should not be.

He said the party was in a state of denial.

“We saw it last week, when the minister of public enterprises, in his angry and arrogant manner, tried to lecture the country on why only he could understand what he was doing. South Africans, the media, the DA – we’re just all wrong, ignorant or uneducated, the minister says. I think he will find the public do not take kindly to his insults,” he said.

Hill-Lewis also took aim at Mboweni for his insistence that the R10.5bn allocated to SAA was not a bailout.

“I think he will find the public don’t take kindly to their intelligence being insulted. Of course this is another bailout, and it won’t be the last. We all know that. Of course there is nothing different. It’s still the same SAA, and there’s no private investor,” he said.

He said this was just the ANC bargaining with itself.

“After bargaining, comes depression. The common signs of which are withdrawal from society – perhaps to a mountain farm.

“Disinterest in work. Dining alone on hastily prepared meals. Posting said meals to social media, not just for interest but more as a cry for help,” he said, obviously taking a dig at Mboweni who regularly posts his canned fish dinners on social media from his Magoebaskloof farm.

He said the ANC was grieving the end of the dream of the developmental state.

“It is grieving its dream of using the state-owned companies to drive its vision of a state-led economy. More fundamentally, it is grieving the death of its own core beliefs – that the ANC is the only source of progress, and that the ANC is always right,” said Hill-Lewis.

“It is over. The full panoply of ANC failure is on national display. Acceptance is all that is left,” he said.

The EFF's Sinawo Tambo slammed both the ANC and the DA's approach.

Tambo, who became an MP last month, accused the DA of a racist right-wing ideology that sought to protect the interest of a few who are working tirelessly to accumulate through the dispossession of public assets.

We must undress the honorable Hill-Lewis’s malnourished motion, in all of its manifestations. Firstly, by educating him on the purpose of state-owned entities as not vehicles for profit, but institutions upon which economic sovereignty ought to be established.

A state-owned enterprise ought to be understood as a vehicle for building state capacity and maintaining a nation's capacity to determine its own affairs,” he argued, saying this was the reason the DA's attempt at defunding SOEs should be rejected.

Tambo said after coming to power in 1994, the ANC did not have either the will or technical capacity to give concrete development mandates to state-owned companies.

They did not know what to do with SAA. They did not know what to do with railway infrastructure and Transnet capabilities.

They did not know how to use Eskom capacity to electrify previously excluded communities, build addition power stations and generation mix. They did not know what to do with Denel, Safcol, Afcol, SABC, Alexkor, SA Express, Broadband Infranco, Land Bank, Post Office, SA Nuclear Energy Corporation, Telkom and many other companies.”

Instead, he said, the political power was used to privatise public assets that rightfully belong to people as a whole to benefit the few with a wish that still colonial and foreign-owned, and unpatriotic private sector will voluntarily participate positively in the development agenda of SA to create jobs and reduce poverty and inequality.

TimesLIVE


Would you like to comment on this article or view other readers' comments? Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.

X