SAA is not the only state-owned enterprise (SOE) that will get funds from the fiscus. Various SOEs will be funded to the tune of more than R20 billion over the next few years.
South African Airways planes. Picture: Facebook.com
CAPE TOWN – Government is redirecting funds from other state programmes and departments to fund South African Airways’ (SAA) business rescue plan.
According to the National Treasury’s Medium-Term Budget Policy Statement (MTBPS) documents, they will stump up funding by reducing baselines from departments, public entities, and conditional grants to the provinces.
• READ: Tito Mboweni’s medium-term budget policy statement
SAA will be allocated R10.5 billion to help with its business rescue plan.
During a post-budget briefing, Finance Minister Tito Mboweni was at pains to clarify that this was not a bailout, but rather the fulfillment of an obligation as SAA’s shareholder.
“R10.5 billion is allocated to SAA to implement its business rescue plan,” Mboweni said.
SAA is not the only state-owned enterprise (SOE) that will get funds from the fiscus. Various SOEs will be funded to the tune of more than R20 billion over the next few years.
Of this, the Land Bank will get an additional R7 billion after receiving R3 billion in June.
Mboweni said that the funding of these entities would have to be sourced from other departments.
“This allocation is funded through the baselines of national departments, public entities, and conditional grants,” he said.
Treasury said that SOEs continued to present significant financial risks as a result of direct requests for state financial support.