South African Finance Minister Malusi Gigaba delivered his maiden Medium-Term Budget Policy Statement in Parliament. Picture: Phando Jikelo/ANA

Parliament - The South African Municipal Workers Union (Samwu) on Wednesday, said that it was opposed to the plan by government to sell its Telkom shares and was standing against the privatisation of state assets.

Finance Minister Malusi Gigaba confirmed in Parliament during his Medium-Term budget Policy Statement (MTBPS) that government will dispose of a portion of the state's Telkom shares to bankroll the embattled South African Airways (SAA).

Gigaba said government would have the option to buy back the shares at a later stage but was going ahead with the sale to recapitalise the airline to prevent it defaulting on debt payments on government guaranteed loans. 

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Samwu general secretary, Simon Mathe, said that they "note with great concern" pronouncements by Gigaba that government intends on selling their shares in Telkom albeit with the option of buying back the shares at a later stage. 

"Essentially, the minister is telling us that government will be seeking a loan to continue with operations, as logic would dictates that the buy-back option will incur interest which would have to be paid at the expense of tax payers," Mathe said.

"Guided by our Egoli 2000 and anti-privatisation campaign, Samwu is vehemently opposed to the plan by government to sell its shares of Telkom. Telkom is one of the best state assets which has been performing better and as such it does not make sense that anyone would even think of selling."

Mathe said Samwu remained opposed to the privatisation of state assets, and it was of the view that instead of the sale, government should be speaking of strengthening governance mechanisms at all state owned entities. 

"The time is now for government to implement policies which aim to ensure that the economy grows, creates employment for South Africans while ensuring that service delivery is prioritised," Mathe said.

"Although the minister has committed to allocating a two-third of the budget to social expenditure, Samwu has a few reservations and issues which make municipal workers uncomfortable with the budget as presented."

Mathe added that Samwu was disappointed that municipalities did not receive a fair share of the division of the revenue after getting 9.2 percent, or R112.6 billion, of government expenditure for the 2017/18 financial year.