In a significant shift in fiscal policy, Parliament has resolved to end the practice of bailing out struggling state-owned enterprises (SOEs), according to a senior official. The announcement came ahead of the crucial Medium-Term Budget Policy Statement (MTBPS).
Joe Maswanganyi, the Chairperson of Parliament’s Standing Committee on Finance, stated that the decision is part of a broader effort to improve the management of South Africa’s finances. He expressed optimism about the country’s economic prospects, citing its recent removal from the global financial grey list by the Financial Action Task Force (FATF) and the creation of 248,000 new jobs.
“The resolution of this Parliament is that we no longer want to bail out SOEs,” Maswanganyi declared. “There must be improvement in terms of governance.”
Maswanganyi pointed to positive performances from several major SOEs, including the Public Investment Corporation (PIC), which he said manages R3 trillion in assets, and the Airports Company South Africa (ACSA). He expressed hope that these improvements would set a precedent for smaller SOEs to follow.
In a notable comment on the national carrier, Maswanganyi outlined an ambitious vision for South African Airways (SAA). He emphasized that the airline, which was previously grounded, must now assert its presence more forcefully against private competitors.
“We want SAA to buy its own fleet and not… [have] a situation in airports where there’s dominance of private airlines more than the national carrier,” he said. “This is not the case when you go to Dubai, when you go to London… the national carrier should dominate the space in South Africa.”
The Chairperson also highlighted the government’s R1.3 trillion infrastructure allocation, which he described as a medium-term, labour-intensive initiative critical for job creation. He identified unemployment, poverty, and inequality as the critical issues the Finance Minister must address in the budget.
While acknowledging public frustration with high food inflation, Maswanganyi expressed confidence in the South African Revenue Service (SARS), noting its investments in IT and artificial intelligence are yielding positive results. He also voiced support for the Government of National Unity (GNU), stating there is “convergence on the issue of the budget” and that parties are focusing on national, rather than partisan, interests.
The statements set the stage for Finance Minister Enoch Godongwana’s MTBPS, which will detail the government’s financial plans for the next three years against this backdrop of changing support for SOEs and a drive for economic growth.
