We Agree With Trade Unions: It’s Time To Shut Down SAA

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The South African Capitalist Party (ZACP) would like to offer its support to the National Transport Movement on its plans to shut down South African Airways (SAA). In February, finance minister Tito Mboweni announced that government’s debt-to-GDP ratio was supposed to reach 56.2% by the end of this year and peak at 60.2% by 2023/24. Instead, as of the Medium Term Budget Policy Statement (MTBPS), the debt-to-GDP ratio is now expected to hit 60.8% before the end of the current financial year and hit 73.4% by 2023/24.

The reason for this abnormally large increase in government debt is government’s determination to throw South Africans’ hard-earned income at unsustainable State companies. Government is throwing away our children’s futures to guarantee debt-financed jobs and tenders for their friends. This is why the ZACP supports the National Transport Movement in calling for a shutdown of SAA, as the union evidently appreciates that only two options remain available for SAA: Drastically reduce costs and then try and convince investors to support their turnaround (like Telkom did several years ago) or shut down the airline, given the private sector is already providing air transport profitably, cheaply and efficiently.

The ZACP calls on the government to heed the advice of this patriotic trade union and let SAA fail, which it will surely do as soon as the government stops throwing money at the problem. This is what government’s own MTBPS had to say about SAA:

“Funding for South African Airways (SAA) [and other failed SOEs] amounts to R10.8 billion in the current year, almost the entire contingency reserve for 2019/20. In its current configuration, SAA is unlikely to generate sufficient cash flow to sustain operations. It is unable to repay outstanding government guaranteed debt of R9.2 billion. Government will repay this debt over the next three years to honour its contractual obligation. Operational changes at SAA are required urgently.”

Government will spend R49 billion on Eskom alone this year (up from R23 billion in the February budget). Every thinking person in this country appreciates that this is unsustainable.

It follows that any opposition to the operational changes must mean supporting the closing down of SAA. Those are the rules ordinary South Africans have to follow because we survive on what we make through voluntary trade with others. Our taxes free SAA from such constraints, including the debts our children will have to pay off as soon as they start working. It would simply be immoral to mortgage the future of young people in this way, considering that we live in a country where seven out of ten able-bodied young people who are not in school are unemployed.

Shut down this failure or alternatively privatise it by giving it to those who oppose cost-cutting measures and want to keep it open at all costs. They, their children and anyone else who thinks this bottomless pit should be kept going can bear the costs without involving the rest of us.

Ends.

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