[imagesource: Reuters]

Finance minister Tito Mboweni presented his medium-term budget policy statement on Wednesday, and there was much to unpack.

We have broken down the basics here, but the headline act is clearly the R10,5 billion headed SAA’s way, that is definitely not a bailout, guys.

Mboweni went to great pains to explain this in his media briefing following the budget address, saying it’s actually funding to implement the SAA business rescue plan in place, which will only become available in January of next year.

Public Enterprises Minister Pravin Gordhan also hit back at criticism, saying yesterday that he was shocked by “the lack of financial literacy and understanding of government processes”.

In a statement from the Department of Public Enterprises, reports EWN, spokesperson Sam Mkokeli said it would cost almost double to liquidate the airline at a cost of R18,5 billion.

Dress it up however you like, but we had to find that money somewhere, and some of the “reprioritisation” that has taken place deserves a closer look.

Moneyweb has broken it down department by department:

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 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.

So the three departments taking the biggest hit are related to law enforcement, higher education, and health.

In the midst of a pandemic, with unemployment numbers set to surge, and a country beset by criminality. Alright then.

There was also a R195 million cut to the Justice and Constitutional Development budget, which includes cuts to the NPA, just when they finally look to be sharpening their tools and targeting some of those responsible for State Capture.

The budget for basic education also took a R267 million hit, but as Moneyweb points out, “schoolchildren using pit latrines at primary schools must take pride in their national airline”.

You can see a full table of where every single million comes from here.

Every cent of that R10,5 billion comes from taxpayers, and the fact remains:

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.

But hey, at least our politicians get to fly around the country on a national carrier, rather than having to kick it on Mango with us plebs.

And will this R10,5 billion really be the last time taxpayers foot the bill for a business that has proven incapable of staying afloat on its own, year after year?

[sources:ewn&moneyweb]