A question flagged up at the Thursday Noontime webinar this week on the state of rail in South Africa: “Is Prasa concerned that budget might be steered towards SAA?”
It raises what many academics consider an Economics 101 concept – opportunity cost. Defined as ‘not the money spent but rather the next-best alternative that your money could have bought.’
Put another way, if your money will buy you either a chocolate bar or chewing gum, your choice of the bar means you will lose out on the gum.
SAA bailouts have exceeded R57bn since 1994, with these funds diverted from other spending requirements.
Finance Minister Tito Mboweni should look to answer the SAA-Prasa, chocolate bar-gum question as he puts the finishing touches to the Medium Term Budget Policy Statement – to be released later this month – on how taxpayers’ funds are allocated.
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