Where SAA got its R10.5bn from

Finance Minister Tito Mboweni had, on several occasions, voiced his opposition to refinancing the bankrupt South African Airways (SAA), urging cabinet ministers that Treasury would find it difficult to find the R10.5 billion to restart the national airline.

Eventually he had to yield to the consensus opinion of government and was ordered to scrape the funds together to restart the failed airline.

A list of figures contained in the supporting documents to the Medium-Term Budget Policy Statement shows that it was indeed difficult to find the R10.5 billion, with Mboweni eventually having to shift even paltry amounts from other state departments to find the money.

The bulk of the cash now going to SAA, following the R3.53 billion set aside for SAA in the 2020 national budget, was taken from the police.

The South African Police Service budget was effectively cut by nearly R1.2 billion, equal to 11.4% of the cash going to SAA.

The department for higher education and training lost R1.13 billion, contributing just less than 11% of the funds.

This cut comes at a time when universities and other tertiary education centres are concerned about their financial viability, due to an increase in the numbers of (non-paying) students and rising costs due to a longer-than-normal academic year.

The health department will have to do with R694 million less, and transport with R681 million less.

The list is sure to elicit a lot of criticism, such as that by a Moneyweb reader on another article about the SAA rescue plan, where he commented that school children using pit latrines at primary schools must take pride in their national airline.

The budget for basic education lost R267 million to SAA.

Human settlements lost R345 million, equal to 2 952 houses for the homeless.

This is based on the cost of only the house (R116 867), excluding the cost of land (R6 000) and services (R45 000 per house). But, then the budgets for public works and infrastructure, as well as that for agriculture, land reform and rural development, was also cut.

Statistics SA, which recently complained about a shortage of funds while gearing up for a national census next year, saw its budget reduced by R45 million.

Meanwhile, military veterans are probably rethinking their vocal support for SAA after seeing their budget cut by R54 million.

Mboweni also cut Parliament’s budget. The members’ enthusiastic demands that SAA must be saved are costing them R24 million.

The amounts shrink to paltry figures towards the bottom of the list.

The department looking after the interest of women, youth and people with disabilities was forced to contribute R7.5 million, while the Office of President Cyril Ramaphosa was hit for R6.6 million to make good on the president’s promises of saving SAA.

But, at the end the day, all the money comes from taxpayers.

The majority of taxpayers will never get within touching distance of an SAA aircraft, especially the poor who contribute 15% in VAT to the state on nearly everything they buy.

The kick in the groin is that nobody really knows what SAA has done with all the billions it has received to date.

This article first appeared on Moneyweb and was republished with permission.

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