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The ANC in Parliament has welcomed Minister of Finance Tito Mboweni’s remarks that struggling state-owned entities should no longer be given unconditional bailouts.
In a statement after Mboweni delivered his maiden Budget in Parliament on Wednesday, the ruling party said it supported Treasury's efforts to stabilise the debt-laden power utility via a support package of R23bn a year over three years.
"We further welcome the stress on ensuring that our SOEs function effectively through a variety of transformative measures. We agree with the Finance Minister that the state’s financial support for state-owned companies should be on the basis of clear conditions," the statement said.
It was "utterly crucial" that public confidence in the SA Revenue Service be restored, and that the caucus looked forward to the appointment of the new commissioner which Mboweni said would happen in the coming weeks.
DA finance spokesperson Alf Lees said in a statement that the crisis engulfing Eskom was only being partly resolved by the allocation of R69bn in bailouts.
"This will kick the can down the road until after the May General Election when we expect a more substantial funding of Eskom to be announced in the 2019 Medium Term Budget Policy Statement," said Lees.
Lees said the fact that Treasury now expects the debt to GDP level to breach the 60% level in 2023/24 "makes a mockery" of the commitments from various ministers of finance to stabilise debt.
The DA finance spokesperson said that while there were no direct tax rate increases in the Budget, the lack of inflation-linked increases in personal tax brackets was "effectively an income tax rate increase". Another was the failure to adjust the medical tax credit for inflation, which Treasury hopes will raise an additional R1bn in tax revenue.
The Economic Freedom Fighters said in a statement that Mboweni’s questioning of whether South Africa needed state-owned companies was both misleading and misguided.
As part of his Budget speech, the minister said the state must tighten the guarantee rules.
"If a state-owned enterprise applies for a government guarantee for operational purposes, it will be required to appoint a chief reorganisation officer in concurrence with the National Treasury and its bondholders".
At an earlier briefing with journalists, Mboweni said he was posing the question to "agitate a conversation".
"State-owned entities are strategic state assets, important for building state capacity to deliver efficiently," said the EFF.
"The mismanagement of SOEs by the ruling party since 1994, as a revolving door for incompetent and corrupt comrades, while sidelining qualified engineers, scientists, artisans, planners, competent and qualified administrators; is not a reason to say we don’t need entities," the statement said.
The EFF hailed efforts to rebuild capacity at SARS. The Congress of the People called the budget speech a "stop gap measure" that could only provide temporary relief from the "Gordian Knot-like" economic quandary South Africa found itself in.
