VIJAY NAIDOO: Good Business Basics – Sheltered state employment thing of the past?
One hopes that this new attitude is stern warning to existing SOEs to shape up or ship out.
News that state owned SA Express had entered final liquidation appears to be a landmark development in the way the State is planning to deal with its malfunctioning state owned enterprises (SOEs).
With its steadfast refusal to ante up additional funds to rescue the airline or stave off the final order, even in the face of significant salaries being owed to employees, and other creditors, it appears that the State has finally lost its appetite to protect government jobs at all cost.
This new approach seemed to be reinforced by Finance Minister Enoch Godongwana in delivering his Medium Term Budget Policy statement last week, when he prefaced every announcement of assistance to SOEs, such s Denel and Sanral, with the phrase ‘subject to strict pre-conditions’. Whether this will come to pass is up for debate, but there is no doubt that ‘blank cheque’ policy of support for SOEs is a thing of the past.
The situation at SAA also shows signs of the tougher stance, in that the fiscus appears in no rush to ante up the R3-bn needed to consummate the deal with the preferred Takatso Consortium. Encouragingly, it is looking to the bidder to secure more of its own funding – a far cry from the past where the State fell over itself to make deals work.
The reality is that the push to create ‘agencies’ or organise state owned functions along the lines of private companies – except where it came to consequence and performance management – rarely, if ever has led to operating improvements.
What this meant was that these entities displayed all the characteristics of private companies, like plush offices and management structures with attendant perks and benefits, without the checks and balances and delivery expectations of real private companies.
More alarmingly, parallel or duplicate departments within the ministries often continued operating.
One hopes that this new attitude is stern warning to existing SOEs to shape up or ship out. Non-performance by staff will not be rewarded, and sheltered state employment at SOEs is a thing of the past.
Vijay Naidoo is the CEO of the Port Shepstone Business Forum. He writes in his personal capacity. The views expressed are the author’s own and do not necessarily reflect those of this publication.
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