This is where SAA got its R10.5bn from

Police lost R1.1bn of its budget, primary schools lost R276m and even people with disabilities had to contribute.
Image: Waldo Swiegers, Bloomberg

Finance Minister Tito Mboweni had, on several occasions, voiced his opposition to refinancing the bankrupt South African Airways (SAA), urging cabinet ministers that Treasury would find it difficult to find the R10.5 billion to restart the national airline.

Eventually he had to yield to the consensus opinion of government and was ordered to scrape the funds together to restart the failed airline.

A list of figures contained in the supporting documents to the Medium-Term Budget Policy Statement shows that it was indeed difficult to find the R10.5 billion, with Mboweni eventually having to shift even paltry amounts from other state departments to find the money.

The bulk of the cash now going to SAA, following the R3.53 billion set aside for SAA in the 2020 national budget, was taken from the police.

The South African Police Service budget was effectively cut by nearly R1.2 billion, equal to 11.4% of the cash going to SAA.

The department for higher education and training lost R1.13 billion, contributing just less than 11% of the funds. This cut comes at a time when universities and other tertiary education centres are concerned about their financial viability, due to an increase in the numbers of (non-paying) students and rising costs due to a longer-than-normal academic year.

The health department will have to do with R694 million less, and transport with R681 million less.

Reprioritisation of the 2020 national budget for implementation of the SAA rescue plan

Funds reprioritised from: Amount (Rm) % of total
Announced in the 2020 Budget speech 3 530 33.6%
 Police 1 196 11.4%
 Higher Education and Training 1 133 10.8%
 Health 694 6.6%
 Transport 681 6.5%
 National Treasury 362 3.5%
 Human Settlements 345 3.3%
 Correctional Services 308 2.9%
 Basic Education 276 2.6%
 Cooperative Governance 255 2.4%
 Public Works and Infrastructure 234 2.2%
 Water and Sanitation 201 1.9%
 Justice and Constitutional Development 195 1.9%
 Agriculture, Land Reform and Rural
Development
172 1.6%
 Trade, Industry and Competition 110 1.0%
 Home Affairs 98 0.9%
 Environment, Forestry and Fisheries 96 0.9%
 Mineral Resources and Energy 91 0.9%
 Science and Innovation 87 0.8%
 Public Enterprises 57 0.5%
 Sports, Arts and Culture 56 0.5%
 Military Veterans 54 0.5%
 Statistics South Africa 45 0.4%
 Employment and Labour 40 0.4%
 Communications and Digital Technologies 38 0.4%
 International Relations and Cooperation 29 0.3%
 Small Business Development 27 0.3%
 Parliament 24 0.2%
 Public Service and Administration 22 0.2%
 Tourism 17 0.2%
 Women, Youth and Persons with Disabilities 7.5 0.1%
 The Presidency 6.6 0.1%
 Government Communication and Information System 5.9 0.1%
 National School of Government 2.2 0.0%
 Traditional Affairs 1.9 0.0%
 Civilian Secretariat for the Police Service 1.7 0.0%
  Total 10 500 100%

Source: National Treasury

The list is sure to elicit a lot of criticism, such as that by a Moneyweb reader on another article about the SAA rescue plan, where he commented that school children using pit latrines at primary schools must take pride in their national airline. The budget for basic education lost R267 million to SAA.

Human settlements lost R345 million, equal to 2 952 houses for the homeless.

This is based on the cost of only the house (R116 867), excluding the cost of land (R6 000) and services (R45 000 per house). But, then the budgets for public works and infrastructure, as well as that for agriculture, land reform and rural development, was also cut.

Statistics SA, which recently complained about a shortage of funds while gearing up for a national census next year, saw its budget reduced by R45 million. Meanwhile, military veterans are probably rethinking their vocal support for SAA after seeing their budget cut by R54 million.

Mboweni also cut Parliament’s budget. The members’ enthusiastic demands that SAA must be saved are costing them R24 million.

The amounts shrink to paltry figures towards the bottom of the list. The department looking after the interest of women, youth and people with disabilities was forced to contribute R7.5 million, while the Office of President Cyril Ramaphosa was hit for R6.6 million to make good on the president’s promises of saving SAA.

But, at the end the day, all the money comes from taxpayers.

The majority of taxpayers will never get within touching distance of an SAA aircraft, especially the poor who contribute 15% in VAT to the state on nearly everything they buy.

The kick in the groin is that nobody really knows what SAA has done with all the billions it has received to date. SAA has not published a financial report since 2017. Corruption and wasteful expenditure have not been tallied, and there is no assurance that they will not eat into this R10.5 billion either.

COMMENTS   30

Sort by:
  • Oldest first
  • Newest first
  • Top voted

You must be signed in to comment.

SIGN IN SIGN UP

Anything for MP’s and cadres to fly for free. !!!!

Not to mention cadre companies who sell fuel and airline food to SAA at three times the free market rate.

This is utter madness.As things stand how long before the country hits the wall/collapses? I believe somewhere between 5-7 years.

Nope — there is no more wall and we are falling off the cliff.

It is absolutely fitting and appropriate that a failed and rapidly collapsing nation should be represented by a failed and repeatedly collapsing national airline. After all they both have a common cause of failure that is not only not being addressed but never will be.
Everyone responsible will surely agree that the process of erasing truth and rewriting history must be given greater priority.
May the party continue until the inevitable doomsday.

One has to realise that the ANC-controlled government must have an SAA?
I mean, WHERE ELSE are they going to steal so easily from in order to keep the patronage network going?

And, this R10,5bn creates the impression it is now the very LAST lifebuoy to be thrown at SAA. Bhwa-ha-ha-ha-ha…

Eskom

Not that easy anymore from ESkom, they shot themselves in the foot with Andre. Thought they could control him, not so.

All to keep a vanity project in the sky… largely, one suspects, because the ANC doesn’t want to lose face by being the ones responsible for its demise.

It is really astounding that funds from crucial departments like Police, Health, Education, Correctional Services and others which are all struggling with a myriad of issues should be directed to a vanity project like SAA.

He may as well as simply spent it on a 30 day binge holiday in the Seychelles for the entire cabinet for all the actual return on capital that could be expected.

Why? Who motivates this insanity?

This shows that finance minister is the greatest pretender and all his criticism is only for show!
Do we have anyone within the ANC government who stands for the truth no matter what, this includes submitting his resignation not as a bully but because of great ethics, skills and facts?
I know the follow up interviews with the finance minister and the ANC will be useless but I am still curious and what on record the reason/s why the cuts are justified so as to keep SAA .
The questions should not be dealt with one answer. We should be given a reason for each point e.g a SAPS cut, why and the impact?

The living conditions in RSA are becoming more and more unpleasant for working class citizens.

I can’t even describe how infuriating it is to read this article, as well as the Bill being changed for land expropriation with a political agenda behind it.

Also taking funds from Higher education is alarming as well.

**shakes my head**

@ TITO – Minister, you cannot fix what the ANC has broken.
What is broken (is beyond repair), can never be fixed even with all the smartest BEE minds from the rest of Africa… or even with all the cash you borrow!

I honestly believe we should scrap the money spent on Education.
Private Sector ultimately hires BEE certified individuals from the rest of Africa…. or they hire contractor from India, China or some cost effective place.

Why are we investing in our people?

LEts stop wasting money!

Insanity: doing the same thing over and over again and expecting different results.

‘The majority of taxpayers will never get within touching distance of an SAA aircraft, especially the poor who contribute 15% in VAT to the state on nearly everything they buy.’—–

Most of the poor are not registered for or falls below any tax bracket.

I always thought Minister Tito had business savvy. My thoughts are now different.

Absolute madness. If the poor really understood how deep corruption and wastage runs we’ll have a war on our hands.

Let us not forget about the Blue Brigade’s billions that appears to go untouched.
Let the taxpayer’s security be compromised while the fat cat cadres have their private security detail.
I agree and support all the comments re cutting the education budget. I wonder how many of those kids contributing will ever fly on SAA.
I reiterate my call for taxpayers to boycott SAA if they ever fly again.
Their are alternatives.

ANC: we need R200bn pa for NHI.

Also ANC: we need R694m from the health budget to fund an airline.

WTF is this fascination with running a f’ing airline??? These fools can’t govern but they try to run an airline? This is one of the most competitive and really low margin businesses to run yet they carry on. Obviously lucrative supply deals in the background.

If anyone finds a brain cell for sale, please let me know and I will gladly purchase and donate to these dumb f’$#%s.

The unions run the ANC and rule this godforsaken country.
The unions have threatened the ANC that if they do not keep the SAA cadres employed they will pull their voters and vote for the EFF. Hence Mboweni put in a corner and instructed to do what he has done.
Disgusting and shameful!

Whenever you see something that says government want to restructure or reform you must know thats money that will never be seen again. Why carry on like this? Every single day there is about 5 new plans that this government has on how to improve the situation in SA instead of just admitting they have no idea what they are doing. I for one hope the end comes sooner than later, no use carrying on like things are going now.

One day some one will write a book about this.

The steady methodical destruction of a country, and disgusting enrichment of those that did it.

The rough total of what has been blatantly stolen since 1994 is boggling.

I would love to know just how much the Zuma family pocketed. I would hazard a guess at a good couple of billion if not more.

I often thought post 94 how did these guys manage to afford just the cars they drove. I was naive enough to try and compare it to myself saving for my first car…….but when you can pocket 100 million plus just by passing on a tender. Mmm now I know.

Does it look to you that we need more flights to nowhere for no fee (for relatives, and those who can hack the system), than police, with the increasingly brazen and ruthless crimes that are percolating?

Ja Ne Minister of Bailouts

You must be 50+ mr.Falconetti

Love your username!…..only us oldies remember the famed actor from Rich Man, Poor Man from the 70’s.

Googled him…born 1933…and still alive (and kicking?) at age 87. Wow!

Aside from the fact that SAA will not turn a profit in our life times, has anyone considered who their clients will be? Angry South African tax payers who have seen their money squandered and stolen? I don’t think so.

Fly Safair for me baby!

Poor Tito is between a rock and a hard place being told by ANC Executive Committee what to do or get fired. This is the 2nd time he has been coerced into giving SAA money.
What can one do but throw up in the toilet?

End of comments.

LATEST CURRENCIES  

USD / ZAR
GBP / ZAR
EUR / ZAR
NEWSLETTERS WEB APP SHOP PORTFOLIO TOOL TRENDING CPD HUB

Follow us:

Search Articles:Advanced Search
Click a Company: