Cape Town – Finance Minister Tito Mboweni has responded to criticism of his approval of rescue funding for South African Airways with a tweet saying in politics one loses some battles if you are a team player.
The minister has not been a proponent of saving the loss-making airline, but the Department of Public Enterprises said on Friday the government would reprioritise funding to find the R10.3 billion required for the SAA business rescue plan.
It is expected that Mboweni will announce the funding in the medium-term budget policy statement next month.
The announcement prompted Democratic Alliance finance spokesperson Geordin Hill-Lewis to challenge the minister to defy Cabinet, in particular Public Enterprises Minister Pravin Gordhan, and refuse to avail the funding.
Hill-Lewis said the statement by Gordhan’s office was both a “crushing defeat” for Mboweni’s plans to stop pouring money into failing parastatals and an insult to the finance minister.
On Twitter, Mboweni replied to Hill-Lewis by saying: “Failure to understand the nature and content of politics could lead one to reach disastrous conclusions.
“A balanced approach is fundamental. In politics you have to be a Team member! You won’t like every decision but work through issues based on what is in the National Interest!”
Hill-Lewis responded with another statement urging Mboweni to take the matter to the wire and to resign if he lost the policy battle.
“Mboweni should not accept defeat so meekly. The Democratic Alliance calls on him to fight back against this bailout decision and do what is right for the country, not what is right for his party,” he said.
“He should dig in his heels and refuse to fund this bailout. South Africa needs a finance minister who will stand firm against political pressure and hold the line. If he does not, he will be a lame duck finance minister who is no longer in control of government spending.”
He said the tussle about SAA was not simply about the airline but about the credibility of the government’s commitment to fiscal discipline and economic reform.
“This is a critical moment for Mboweni, who has drawn a line in the sand on this issue, repeatedly saying that government should not and would not bail out SAA again. If he accepts defeat, then he will have to carefully consider his continued future in the government.”
After SAA’s business rescue plan was accepted earlier this year, Mboweni said in court papers filed in response to an application by Hill-Lewis that the government had not committed to funding the rescue plan but to mobilising to secure it.
However, last week the airline’s business rescue team called a meeting with creditors where it said the plan hung in the balance because no funding had been forthcoming.
This was despite assurances from Gordhan that the government has received unsolicited expressions of interest from potential investors and strategic equity partners.
SAA last turned a profit in 2011 and lost some R10.4 billion in the past two financial years, roughly the sum it requires to keep the airline afloat and honour voluntary severance agreements with about 3 000 staff.
African News Agency/ANA