Finance minister Tito Mboweni says that government is looking at a number of options to help fund the establishment of the ‘new SAA’, including the use of pension funds.<\/p>\n
In an answering affidavit to a case filed by the Democratic Alliance, Mboweni said that government would not use state funds to rescue the bankrupt national airline.<\/p>\n
Instead, other options on the table include seeking money from strategic partners or private equity, as well as tapping pension funds and global financial institutions.<\/p>\n
While the DA has welcomed the commitment to not use state funds, it expressed concerns about the use of pensions.<\/p>\n
“On the basis of Mboweni\u2019s commitment we are satisfied that there is no need for an urgent hearing, although we remain on high alert for other illegitimate attempts to fund SAA,” the party said in a statement<\/a><\/strong>.<\/p>\n “However, Minister Mboweni\u2019s affidavit, belatedly filed in response to the DA\u2019s court challenge, raises new alarms about how SAA might be bailed out using other means.<\/p>\n “Most worryingly, he suggests using pension funds to ‘invest’ in SAA, which raises the prospect of the Public Investment Corporation being forced to give money to SAA.<\/p>\n “The DA will oppose any publicly-funded bailout of SAA, whether through direct cash, government-guaranteed loans, or an attempt to abuse pension funds.”<\/p>\n Economists have also criticised<\/a> <\/strong>the idea of using pensions to help fund the airline, which they said could require a change to Regulation 28 of the Pension Funds Act.<\/p>\n Changing regulations<\/strong><\/p>\n In a proposal document published by the ANC\u2019s Economic Transformation Committee at the start of July, the ruling party indicated that\u00a0the use of pension funds will be key to helping the government address funding shortfalls in areas such as infrastructure development and energy production.<\/p>\n To achieve this, the ANC proposes<\/a> <\/strong>changing regulation 28 of the Pension Funds Act to boost the funding of infrastructure projects spearheaded by state development finance institutions (DFIs) using private capital.<\/p>\n
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