DA says it will block ‘emergency’ funds for SAA

Carol Paton Editor at large
Picture: REUTERS/Sumaya Hisham
Picture: REUTERS/Sumaya Hisham

The DA has given finance minister Tito Mboweni legal notice that it will challenge any disbursement of funds to SAA using his “emergency powers” under the Public Finance Management Act.

On Thursday, the department of public enterprises announced that it has secured the concurrence of Mboweni to “mobilise funds” for the restart of SAA. It said that it projected that an amount of R10.1bn would be required for working capital and to settle outstanding obligations, including the payment of retrenchment packages to staff.

This amount was not included in the supplementary budget tabled by Mboweni on June 24. An appropriation by parliament would be required to transfer funds to SAA. Appropriations can only be made at the time of the budget or the adjustment budget, unless appropriated for an “emergency” using section 16 of the PFMA.

The lawyer’s letter sent to Mboweni warns that funding for SAA does not constitute an emergency.

“There is no emergency. SAA’s financial decline has taken place over several years. It was placed in business rescue late last year. Nothing about SAA’s decade-long decline or its current status in business rescue justifies this extraordinary short-circuiting of the usual appropriations process,” it says.

DA finance spokesperson Geordin Hill-Lewis also said that in 2017, a legal opinion obtained by parliament with regard to a R3bn bailout that then-finance minister Malusi Gigaba had extended to SAA, found that the use of section 16 was likely to be illegal.

“The DA hopes that minister Mboweni will take heed of the advice in our legal notice and stop any disbursement of public funds to SAA. His credibility and authority as finance minister depends on him doing so,” he said.

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