Struggling state-owned enterprises including Denel, the SA Post Office, Land Bank, Eskom, and South African Airways stand to receive financial support during the government’s 2023/24 fiscal year.
Finance Minister Enoch Godongwana has offered financial support to basket-case state-owned enterprises despite his commitment two years ago to be discerning about taxpayer-funded bailouts to such entities.
Two years ago, Godongwana pledged to show SOEs “tough love” in reference to no longer offering a blank cheque to such entities, some of which have habitually relied on taxpayer-funded bailouts for survival. Godongwana later clarified his stance, saying that bailouts would be considered on a case-by-case basis.
A new bailout includes one that will be offered to the Post Office, which stands to receive R2.4-billion. The Post Office is broken — operationally and financially. It has been recording financial losses for 16 consecutive years and owes the SA Revenue Services income and corporate tax payments. The Post Office also owes money to landlords at buildings that house its branches and has not made medical aid and pension fund contributions on behalf of its workers for several years.
There were also delays in the transfer of funds to state-owned arms manufacturer Denel, which was allocated R3.4-billion. But the funds were withheld until Denel finalised a plan to turn its financial and operational situation around.
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