LETTER: SAA and Pravin Gordhan will cost SA a fortune
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Department of public enterprises spokesperson Sam Mkokeli, writing in his personal capacity, tied himself in a knot of propaganda in his response to my letter (Letter about Pravin Gordhan was incorrect (, August 10).
Mkokeli’s response is classic revisionist “whataboutery”, but unfortunately he says nothing of substance.
According to Mkokeli, Gordhan was a spectator, not an active participant in a shameful period of SA’s history described by his own political party as the nine wasted years. It’s beside the point, but it was never disputed that Gordhan was an excellent tax administrator. He modernised Sars and moulded it into an institution that stood SA proud.
Sadly, his track record at the Treasury and the department of public enterprises is a different story.
Mkokeli notes that Gordhan and company embarked on the “new growth path” during 2009, in which policy interventions apparently focused on infrastructure development. But we know this is not true; the only expense items developed since 2009 are the public-sector wage bill, which increased by about 110% in nominal terms between 2009 and 2015 (BusinessTech, 2018); social grants; and endemic state corruption.
By 2018, the public-sector wage bill had increased by more than 200% from 2009.
This unproductive expenditure, not infrastructure expenditure or capital formation as Mkokeli would have us believe, was funded by debt.
Mkokeli accuses me of twisting facts, distortion and prejudice, but offers no believable alternative. The one thing he does get right is that I do not agree with the government’s outlook on SAA and its aviation policy.
Let’s forget SAA’s history of bailouts for now and consider the cost of keeping it in a perpetual state of future insolvency at taxpayers’ expense: R16.4bn for secured lenders; R10bn to “rescue” SAA; R6bn in losses during the first three years of operation post-rescue, according to the business rescue practitioners; R1bn to save a forever bankrupt Mango; R1bn to save SAA Technical; then the often ignored R6bn forfeited by concurrent creditors (suppliers) in favour of SAA during the purported business rescue process.
That is R40bn in economic cost to get SAA version 2.0 started, but the real clanger will be when the department goes on a buying spree for new aircraft after curiously returning all SAA’s leased aircraft under business rescue conditions. You can double the R40bn for starters. It is simply unconscionable.
Mkokeli concludes by sketching a nefarious agenda of false narratives to rid the ...
Mkokeli’s response is classic revisionist “whataboutery”, but unfortunately he says nothing of substance.
According to Mkokeli, Gordhan was a spectator, not an active participant in a shameful period of SA’s history described by his own political party as the nine wasted years. It’s beside the point, but it was never disputed that Gordhan was an excellent tax administrator. He modernised Sars and moulded it into an institution that stood SA proud.
Sadly, his track record at the Treasury and the department of public enterprises is a different story.
Mkokeli notes that Gordhan and company embarked on the “new growth path” during 2009, in which policy interventions apparently focused on infrastructure development. But we know this is not true; the only expense items developed since 2009 are the public-sector wage bill, which increased by about 110% in nominal terms between 2009 and 2015 (BusinessTech, 2018); social grants; and endemic state corruption.
By 2018, the public-sector wage bill had increased by more than 200% from 2009.
This unproductive expenditure, not infrastructure expenditure or capital formation as Mkokeli would have us believe, was funded by debt.
Mkokeli accuses me of twisting facts, distortion and prejudice, but offers no believable alternative. The one thing he does get right is that I do not agree with the government’s outlook on SAA and its aviation policy.
Let’s forget SAA’s history of bailouts for now and consider the cost of keeping it in a perpetual state of future insolvency at taxpayers’ expense: R16.4bn for secured lenders; R10bn to “rescue” SAA; R6bn in losses during the first three years of operation post-rescue, according to the business rescue practitioners; R1bn to save a forever bankrupt Mango; R1bn to save SAA Technical; then the often ignored R6bn forfeited by concurrent creditors (suppliers) in favour of SAA during the purported business rescue process.
That is R40bn in economic cost to get SAA version 2.0 started, but the real clanger will be when the department goes on a buying spree for new aircraft after curiously returning all SAA’s leased aircraft under business rescue conditions. You can double the R40bn for starters. It is simply unconscionable.
Mkokeli concludes by sketching a nefarious agenda of false narratives to rid the ...
