Tito on the record… Eskom, SAA and the need to change

As usual, finance minister Tito Mboweni peppered today MTBPS address with his trademark straight talk. Here are some of the most memorable…

• Our problem is we spend more than we earn. It is as simple as that.”
• “You have told us that we must spend your hard-earned (tax) money better and we could not agree more.”
• “Our little Aloe is not doing well. It needs attention, like our public finances. There is no status quo option. The consequence of not acting now will be gravely negative for South Africa.”
• “On the current trajectory, by the end of the three year framework debt servicing costs will be bigger than spending in health and economic development.”
• “We must wean State Owned companies off the national Budget. They must learn to stand on their own feet.”
• “We cannot continue to throw money at Eskom. For the sizeable support required, it cannot be business as usual. Eskom is a business and should be run that way.”

• “(Only) Once I am convinced that the Eskom board and management has made irrevocable commitment to implement Government’s decisions – and there is enough progress – will we negotiate the approximate size of debt relief.”
• “SAA is unlikely to ever generate sufficient cash flow to sustain operations in its current configuration.”
• I am pleased to learn that there are conversations involving SAA and potential equity partners, which would liberate the Fiscus from this SAA sword of Damocles.”

• “(With the current support of SAA) we have essentially chosen to subsidise the middle class and wealthy flying around the country and other parts of the world, rather than ordinary workers who sit in old trains from the townships every day often getting stuck and being late for work.”
• “We are also subsidising the wealthy SAA bond holders who hold government guaranteed debt but receive higher yields without additional risk.”

Alec will present his findings from today’s Medium Term Budget Policy Statement with a webinar this evening at 7pm allowing you to pick up the highlights from the comfort of your own home. Courtesy of BrightRock’s sponsorship, it’s free, but you must register beforehand – click here to do so.