DA calls on government to stick to its guns on SAA business rescue, even if it means going against the unions.

The Democratic Alliance (DA) applauds the press release by the DA Member of the Standing Committee on Public Accounts, Alf Lees MP, which charts a potential strategy for South African Airways amidst the Business Rescue process.

In line with this, we welcome the belated move by President Ramaphosa to place SAA under Business Rescue – better late than never!

The DA believes this will, however, herald an upcoming battle with the unions which speaks to a central issue that bedevils all public enterprises. Under SAA’s Business Rescue, this nettle will have to be grasped and we hope that in doing so, the way will be paved for further interventions with other State Owned Enterprises (SOEs.)

The bankrupt state-owned diamond mining entity, Alexkor, needs to be next in line because it has for far too long been in a state of chaos, due to mismanagement and corruption which the ANC government has knowingly turned a blind eye. The labour issues in Eskom and Transnet also require concomitant action.

The drain on the fiscus by numerous SOE’s must be addressed and it cannot be over-emphasised that the decision to place SAA under business rescue needs to herald a desirable and overdue approach that must be extended to all SOE’s that add to the momentum driving South Africa Inc. over the fiscal cliff.

SAA’s financial woes, like many other SOE’s, has imperilled our economy. We are pleased that National Government has put its pride aside, to do the right thing, albeit that this course of action, championed by the DA, was only effected at the eleventh hour.

We hope that ANC government will take a stand against its alliance partner and stick to making tough decisions that are in the best interest of South Africa and the economy – without fear nor favour.

We will fight the anti-poor tax increases on all fronts

The following remarks were made today by DA Leader, Mmusi Maimane, at a rally in Soshanguve, Tshwane. Maimane was joined by DA Gauteng Leader, John Moodey, and Tshwane Mayor, Solly Msimanga. The national petition launched today can be accessed here.
Fellow Democrats
The National Budget, tabled in Parliament this past Wednesday by Finance Minister, Malusi Gigaba, was the first actual, tangible action taken by this government since the election of a new President last week. It was the first opportunity to see this governments plans in action, and access its priorities. Sadly, it represents no real change from the ANC in government. It is undoubtedly one of the most anti-poor budgets we have ever seen – and it amounts to an assault on the poor and the jobless.
Instead of cutting the fat and waste in government – unnecessary expenditure and bloated departments – and focusing on growth, the ANC chose to cut spending on services to poor people, including funding for housing, education, policing, and local and provincial government.
The raising of VAT by 1 percentage point in effect means that we will all be paying 7.14% more tax on every day goods and services. This, combined with a significant fuel levy increases, will make food and transport more expensive. It will now be more expensive to be unemployed in South Africa. Life will get harder for the most vulnerable in society over the coming months.
As I have said, I will offer President Ramaphosa my support when he takes action that will benefit the country. However, raising VAT and transport levies will not benefit the country, it will do the very opposite – and it will hit the poor and the jobless the hardest.
This is because poor households spend a much greater portion of their income on food and transport. According to StatisticsSA, poor households spend most of their income – 30% – on food, compared to non-poor households which only spend 10.5%. A VAT increase only exacerbates this inequality between the “haves” and the “have not’s”.
Moreover, two thirds of the country’s lowest income earners use more than 20 percent of their income on transport costs. This means the 52c per litre increase in fuel levies means the cost for people to travel long distances to work, or to look for work, will increase.
Over half of our nation lives in poverty, and almost 10 million South Africans are without a job. Those South Africans should have benefitted from the budget, not been bruised and battered by it.
The ANC cannot steal public money and then expect us, the people, to pay for it.
South Africans are law abiding. We pay our taxes faithfully, and we deserve better than this.   We will not take this lying down.
Therefore we are here today to call on all South Africans to join the fight against increased taxes for the poor and working class. The DA will oppose and fight the VAT increase and the transport levy increases on all fronts. We will not support a regressive and anti-poor policy by the ANC, and will today be launching a national petition to say ‘no’ to VAT and transport levies. The petition can be accessed here.
I call on all South Africans to join this fight, and to add their voice in saying we will not accept things as is any longer.
The ANC government had a choice – and they still have a choice. Raising VAT and other taxes was not a necessity.  Instead of raising VAT, they could have rather cut the fat in government.
In fact, we even did the work for the ANC government. Our plan spelt out the options for expenditure cuts and selling off certain entities that would free up R112 billion. That meant tax increases were not necessary. But the ANC chose otherwise.
Instead of reducing the number of foreign missions, which could save an estimated R3.9 billion – the ANC decided to raise VAT by 1%.
Instead of withdrawing from the New Development Bank, which would save an estimated R17.2 billion – the ANC decided to increase transport levies by 52c per litre.
Instead of reducing the size of the executive, to 15 ministries, which could save R13.8 billion over the medium term – the ANC chose to cut police services by over 2000 personnel.
Instead of selling government’s remaining shares in Telkom, which would raise an estimated R7 billion – the ANC chose to cut funding for building houses by R7.2 billion.
Instead of implementing salary freezes for all highly paid fatcat head office staff, which would raise an estimated R7.5 billion – the ANC chose to cut funding for education by R3.6 billion.
The first national budget of the Ramaphosa administration is an assault against the poor and unemployed in our country. This is not the change we wanted to see – it is more of the same from the ANC.
Our fight will always be for the poor, the unemployed, the excluded, and the vulnerable in society. We will always oppose actions which bully the little guy, the ordinary South African who is just trying to get by. We will always stand up to the interests of a few, for the benefit of the many – whether it be big government, big business, or big labour.
And this budget is precisely that. It is big government bullying ordinary South Africans into paying for its misdeeds. The ANC cannot make the poor pay for their looting of public money.
In the lead up to the budget process in Parliament, we will be in communities across the nation, in shopping centres, in places of activity, and knocking on doors in our effort to mobilise South Africans against the uncaring and unnecessary increase of VAT and other regressive anti-poor taxes.
We will table this petition in Parliament, and bring the voice of the people to the ears of the out of touch, self-serving ANC. We will also unequivocally oppose the passing of the Bill which will give effect to the VAT increase from 1 April 2018.
We call on all MPs to vote against the laws that will give effect to these taxes, which will come before Parliament in the coming weeks. This includes the ANC’s alliance partners in Parliamment. They cannot say they are against VAT increases in the media, but vote to support VAT increases in Parliament.
The President has options. The ball in now in his court. If he chooses to stick by this anti-poor, anti-development budget, then his words of change and renewal will be nothing more that empty words, and more of the same from the ANC.
Today, we begin our fight to put the power back in the hands of the people, not rich politicians who don’t care about the plight of the poor and the jobless.

Government severely underspends on community media

In reply to a DA Parliamentary question, Communications Minister, Mmamoloko Kubayi-Ngubane, revealed that the Department of Communications (DOC) and its entities have only spent a mere R1.3 million on advertising in community media in the 2016/17 financial year.
In fact, it was only some of the DOC’s entities that spent money on advertising. The DOC itself, which had a R11.9 million budget for advertising purposes in 2016/17, did not spend a single cent on advertising in community media.
It is quite clear that Government has forgotten about the essential role community media plays in providing entertainment and education in communities that may not have access to the public broadcaster.
Government should be supporting community media and not stifle their voices. It is community radio stations and newspapers which empower our people and bring them to the centre of participating in the national debate.
Community radio is the most affordable and accessible communication technology available to many South Africans in rural communities.  It is an essential tool to assist in carrying the country forward.
Without advertising, community media will fail to make revenue and stay afloat – forcing them to close shop which only perpetuates the lack of diversity in voices and ideas in community media.
The DA believes that Government should adequately and sustainably fund community media. Underfunding or lack of funds will have a severe impact on the quality of programming and the development and retaining of skills.

SAA must be Stabilised, Professionalised and Sold Off

The crisis at South African Airways (SAA) is fast reaching boiling point with debt repayments totaling R6.9 billion due this Saturday, 30 September. Despite this urgent situation, National Treasury has yet to reveal where this enormous amount of money will come from.
Our national carrier has become a bottomless pit into which government continues to pour precious public resources that should be spent on lifting 30 million South Africans out of poverty. It is hard to believe that any government hoping to be re-elected would take money from the poor to subsidize travel for the rich.
SAA’s fortunes will not change if we continue done the current tried, tested and failed path. For almost two decades, the airline has relied on government bailouts and guarantees for its survival. The cumulative total of bailouts since 1999 is R14.4 billion, and National Treasury is currently trying to source another R10 billion for the airline in the next 48 hours. Government has already extended R19.1 billion in guarantees – meaning that nearly R35 billion of ordinary South Africans’ hard-earned money has been dedicated to keeping SAA in ‘business’.
In addition to these bailouts and guarantees, and under the control of Board Chairperson Dudu Myeni, SAA has made a cumulative loss of R15.7 billion over the past five years. The DA has been clear and unwavering in our contention that Ms Myeni is both unfit and unsuitable to be at the helm. It is clear for all to see that this government continues to retain and protect Myeni in her position, in spite of this cash hemorrhage, because of her close political affiliations, including President Zuma himself.
The R10 billion that government is saying SAA needs will only pay off the bank loans of R 6.9 billion due by the 30th of September, the Standard Charted bail out of R2.2 billion at the end of June 2017, and R750 million to pay suppliers who were not fully paid in July and August 2017. The R10 billion will not provide working capital to fund the losses that National Treasury and the latest turn-around plan indicate will continue for the next two years. This requires a further R13 billion in cash injections or what National Treasury euphemistically refer to as “re-capitalization”.
The reality is that SAA is insolvent and bankrupt. It must be stabilized, and sold off as soon as practically possible.
Recovery plans have followed turnaround strategies, all yielding further losses. It is clear that national government is hell-bent on hanging onto the beleaguered airline – no matter the cost to the country and its people. SAA is not a strategic state-owned asset and it plays no role in the developmental agenda of government. On the contrary, over the last two decades it has cost our country dearly and delivered no tangible benefits to ordinary South Africans.
Getting to the bottom of the problem
Despite Finance Minister Malusi Gigaba’s best efforts, rumours of an impending raid on the Public Investment Corporation (PIC) refuse to go away. With just 48 hours to go before the R6.9 billion is due, we still do not know how Minister Gigaba intends to fund the bailout, and where additional funds will be found to pay suppliers.
The PIC, which administers the pensions of teachers, nurses, police officers and other public servants, has confirmed that they were approached for a R6 billion bailout for SAA. That our government would even consider risking pension funds of public servants is deplorable.
Significantly, the PIC has serious reservations about SAA’s suitability for a loan. At the media briefing on the 26th of September, PIC CEO, Dan Matjila, revealed that a due diligence investigation had been conducted into SAA. This report found SAA to be below the minimum investment standards required by the PIC. Matjila conceded that the outcome was “not favourable” in terms of “the minimum requirements of our client mandate”.
The contents of this report may be the clearest indication yet of the true state of SAA and the DA believes the report should be released for public scrutiny. We will therefore be submitting an application in terms of the Promotion of Access to information Act (PAIA) to obtain a copy of the SAA due diligence report conducted by the PIC.
Holding Myeni and Gigaba accountable
The Constitution sets out the basic values and principles of public administration in Section 195, which states that:
Public Administration must be governed by the democratic values and principles enshrined in the Constitution, including … [e]fficient, economic and effective use of resources … The above principles apply to … Public Enterprises.”
The national carrier is deemed a public entity in terms of Schedule 2 of the Public Finance Management Act (No. 1 of 1999) and in terms of the South African Airways Act (No. 5 of 2007). Accordingly, SAA is subject to this section.
Sadly, the management of SAA has become the very antithesis of the requirements set out in the Constitution. It is our belief that Malusi Gigaba and Dudu Myeni, in their respective official capacities, have breached Section 195 of the Constitution by not acting in accordance the principals established therein.
Therefore, the DA will be writing to the Public Protector, Adv. Busisiwe Mkhwebane, requesting an investigation into this matter. Specifically, the Public Protector must investigate the role played by Ms Myeni in the institutional decay and poor governance of SAA, since 2009, and Mr Gigaba in his former and current role as minister of Public Enterprises and Finance, respectively. Myeni and Gigaba’s careers are intimately entwined with SAA’s demise and they must not be allowed to escape accountability.
The way forward for SAA
SAA can be profitable and a company worthy of being called South African. However, immediate and urgent action is required.
The DA’s solution to the SAA crisis would consist of the following interventions:

  • Remove Dudu Myeni from the board entirely and ensure that the board is made up of independent individuals with suitable aviation and business experience;
  • Initiate business rescue proceedings for SAA in terms of Chapter 6 of the Companies Act (No. 71 of 2008). This will temporarily place SAA in the hands of a capable business rescue practitioner charged with returning the entity to a healthy financial position. This will have to include:
    • The removal of political interference both in strategy and in the employment of skilled and experienced management and staff;
    • Aggressively pursuing profitable routes, some of which were foolishly abandoned over recent years;
    • Renegotiating supply contracts, particularly major supplies such as jet fuel on the basis of best price for the required service quality;
    • Adjustments to employee compliment numbers to bring the airline in line with international staffing norms.
  • Release government’s stranglehold over SAA by finding a buyer for SAA immediately. This ought to include an employee share scheme, making a portion of shares available to SAA employees in order to empower them and give them a real stake in the company’s future successes.

These initiatives will not only bring much needed public accountability to the airline’s governance, but will go a long way to making SAA profitable again. We thus call on Minister Gigaba to place SAA under business rescue before the next bailout payment deadline of 30 September.
South Africans cannot continue to fund a defunct and failing national carrier. In truth, the imminent R10 billion bailout will only be a short term solution and will not fix the underlying issues at SAA. It is time for urgent and immediate interventions that seek to stabilize, professionalize and sell off SAA.

How many farm murders will be enough for government to take action?

The recent wave of farm murders across the country must see swift and effective action from the ANC government.
Yet our government has continuously failed to put into action already set up plans for rural safety that will mean that farm workers and farmers no longer have to be subjected to torture, murder or the fear of falling victim to brutal attacks.
The DA wishes to convey its condolences to the families of those who have been killed in these attacks.
The Chairperson of the Portfolio Committee on Police, Mr Francois Beukman, has the power to make the Minister of Police, Fikile Mbalula, explain the continued failure to protect farming communities.
The DA will therefore write to request that Mr. Beukman summon Minister Mbalula to urgently explain and to commit to keeping South Africans safe by implementing the rural safety plans.
We will also conduct oversight visits to measure the extent to which police stations are equipped to deal with violence in rural communities.
The government needs to prioritise the safety of farming communities as workers and farmers have a right to be protected from violent attacks.
Our citizens in rural communities should not live in fear while their leaders turn a blind eye to farm attacks.

One year of DA governance: South Africa reacts

Exactly one year ago today South Africans went to the polls in the most historic and game-changing election since 1994.
Our young democracy witnessed its most notable shift in power, as we won three new metros in Tshwane, Johannesburg and Nelson Mandela Bay, adding to the DA-run City of Cape Town.
Today, to mark our one year in government, we held a press conference to report back to the people of South Africa on the progress we’ve made in our metros.
See the reactions below:
We know that while much progress has been made, there is still a long way to go. We are committed to doing more and delivering more for every South African who falls under a DA-led government.
See what we’re doing in Johannesburg, Tshwane, Nelson Mandela Bay and Cape Town.
Real change is on the way. This is just the beginning!

94% of Zuma’s Cabinet claim to have “never met” with Guptas

Answers to a series of written parliamentary questions to all 35 Ministers in the Zuma Cabinet indicate that it is not just a select few in the ANC who serve the Gupta project of State Capture, but rather the majority. Zuma’s Cabinet is now working tirelessly to enrich the connected few, while over 9 million South Africans go without a job.
I submitted parliamentary questions to each Minister asking whether he/she had met with any member, employee and/or close associate of the Gupta family and/or attended any meeting with these persons at the Gupta’s Saxonwold Estate in Johannesburg or anywhere else since taking office.
What has become quite clear from the answers provided is that the Gupta project of State Capture is an ANC project – fully endorsed and supported by the majority in the ANC. This is why Ministers are forced to dodge questions, or provide flimsy and equivocal answers to direct questions.
The written responses reveal the following:

  • The Ministers of Finance, Defence, Economic Development, Energy, Home Affairs and Trade and Industry all admitted to have “attended social events where members of the Gupta family were present”;
  • Trade and Industry Minister Rob Davies states that he has indeed met with the Gupta family on several occasions;
  • Well-known Gupta affiliates – The Minister of Cooperative Governance and Traditional Affairs, Des Van Rooyen, and the Minister of Mineral Resources, Mosebenzi Zwane – both denied having met with members of the Gupta family despite the Public Protector’s State of Capture report providing concrete evidence to the contrary – including phone records and flight details;
  • The Ministers of Environmental Affairs, Public Enterprises, Sport and Recreation, State Security and Women in the Presidency all flatly refused to give an answer to the question;
  • The Minister of Energy admitted to meeting with Gupta employees Mr Nazeem Howa and Mr Moegsin Williams at various New Age breakfasts;
  • The Minister of Small Business Development, Lindiwe Zulu, has refused to even reply to the question, which was put to her in writing 11 months ago, in April 2016; and
  • The Minister of Finance avoided answering the question as it related to his Deputy, Mcebisi Jonas, even though the question specifically asked about the Deputy Minister in light of his public proclamations that he was personally offered the post of Finance Minister by the Guptas in 2015;

Lying to Parliament is a serious offense, and if it transpires that any Member of Cabinet misled Parliament – to which they are Constitutionally accountable – we will take whatever action necessary.
I have also today written to the Leader of Government Business in the National Assembly, Cyril Ramaphosa, requesting that he ensures that the Ministers who have yet to answer, failed to answer, or answered vaguely, are made to provide sufficient answers to the question within the next 14 days.
The DA has already laid criminal charges in terms of the Prevention and Combatting of Corrupt Activities Act against members of the Gupta family, with the Hawks having confirmed to be investigating this matter. We eagerly anticipate the outcome of said investigation.
It cannot be that the ANC works to enrich and promote a small elite minority of connected cadres, while millions of South Africans go without work and rely on social grants for their survival.
The DA will continue to expose the capture of state institutions by President Zuma and his gang of cronies, who loot the state for personal gain while South Africa suffers.