DA calls on Minister Gordhan to brief Parliament on SAA and SAX “no-show” financial reports
2 October 2019
The Democratic Alliance (DA) notes with great concern a letter published today in which the Public Enterprises Minister, Pravin Gordhan, informs the Speaker of the National Assembly, Thandi Modise, that South African Airways (SAA) and South African Express (SA Express), will not meet their deadlines to submit their Annual Reports for the 2018/19 financial year.
According Section 65(1) (d) of the Public Finance Management Act (PFMA), the SAA and SA Express boards were supposed to have submitted their annual report, including audited financial statements and audit report, five months after the end of their financial year. This has clearly not been done. In terms of Section 65(1) (a) and (2) of the Public Finance Management Act (PFMA), “[the] Public Enterprises Minister is required to table before Parliament the annual reports, annual financial statements and audit report of public entities that he is responsible for.
The Minister has sighted serious financial challenges at both airlines for the delay which has rendered them unable to meet going concerns.
The DA will write to the Chairperson of Parliament’s Portfolio Committee on Public Enterprises, Khaya Magaxa, to request that Minister Gordhan brief the Committee on the challenges at SAA and SA Express and why they continuously fail to meet their statutory responsibilities. These issues cannot simply be ignored as both airlines have cost the country billions in bailouts and wasteful expenditure.
These annual reports are not merely “nice-to-haves”, they are tools that allow Parliament to play its oversight role by holding the Executive and officials to account. It is becoming increasingly evident that the Public Enterprises Ministry is failing to properly manage these state-owned enterprises (SOE) as it is certainly not the first time that ailing SOEs are failing to account for their performance and spending.
The no-show from the beleaguered SAA reveals a far deeper crises, the extent of which, can no longer be concealed. The fact that annual reports are again not tabled on time, shows a deep seated problem and is a precursor for another bailout.
Government guarantees to state companies stand at more than R450 billion, according to data from the National Treasury. The State’s exposure to this, increased to 64.5 % in the past fiscal year, from 54.4 % as companies drew on the guarantees.
Last year SAA suffered losses to the tune of R5.5billion and shortly after securing a R5 billion government bailout, it took company executives little over a month to return as result of a financial crisis, demanding another financial bailout. SAA debt which is at R21.7 Billion is sucking the fiscus dry and pose a great threat to the South African economy.
Given the huge amount of the people’s money spent on keeping both SAA and SA Express in the air, Government could have undoubtedly created hundreds of thousands of new job opportunities across other sectors.
These airlines have had too many turn around strategies, where new boards and new CEOs are appointed with zero returns. Ultimately, the political meddling has continuously rendered all attempts to save SAA and SAX futile. The fact of the matter is that SOEs are costing South Africans a great deal more than what they are getting in return and the rationale for Government retaining full ownership of SA Express and SAA, including other embattled SOE has yielded no fruit for South Africans, except those connected to the ANC patronage network.
Issued by Natasha Mazzone, DA Shadow Minister of Public Enterprises, 2 October 2019
