Minister Malusi Gigaba
CAPE TOWN - Delivering his maiden budget speech, Finance Minister Malusi Gigaba acknowledged that South African's were fed up with their taxes being used to bail out state owned enterprises.

Last year during his mid-term budget speech in October last year, Gigaba acknowledged the lack of fiscal control and governance at state owned enterprises and said government is getting tired of being dragged into crises by those it appoints and remunerate handsomely.

It has budgeted an additional almost R14bn for the bailouts of the South African Airways and the South African Post Office. Gigaba said this blow may be lessened by the sale of government assets such as its shares in Telkom.

"Government recognises that the business models of some of our SOE's are unsustainable and their capital structure. Gigaba said government would work with parastatals to implement robust turnaround plans, saying this would be part of a holistic reform program, "which considers the role we want to play in our economic development,'' Gigaba said said.

"In the coming years, government may be required to provide financial support for several state owned companies, which could be done by a combination of disposing of non-core assets, strategic equity partners or direct capital injection."

The Minister said a property audit conducted by the Department of Public Works, showed that local government owns a total of 195 000 properties, with an estimated value of over R40 billion. He said he would work with the department with a program that would better utalise or dispose of these properties within the short to medium term.

"Government is finalising a framework on guarantees, aimed at both reducing the exposure and improving the quality of the guaranteed portfolio.

We can and we will ensure that all state owned companies are run sustainable and contribute to our national development," said Gigaba.


- BUSINESS REPORT ONLINE