Restructure Eskom, DA urges

2015-02-24 16:33

Multimedia   ·   User Galleries   ·   News in Pictures Send us your pictures  ·  Send us your stories

The Democratic Alliance says Finance Minister Nhlanhla Nene should stop giving financial lifelines to Eskom and restructure the embattled electricity provider.

“Bold decision-making can no longer be delayed. In tackling the crisis, a DA-led government would exhibit sorely missed leadership by subdividing Eskom into separate generation and transmission units,” the party said today as it presented its annual alternative budget to journalists at Parliament.

Such a step would leave both units effectively state-funded, but a separate distribution unit would be freed up to buy from the cheapest supplier, easing the entry of independent producers into the market.

The DA urged the minister to increase allocations to renewable energy projects and to ensure that Eskom recovered money from nonperforming contractors – a reference to the delays it experienced at its new Medupi and Kusile power plants.

Likewise, the DA argued against any more financial help for ailing national carrier South African Airways and called on government to list a 49% stake in the airline over a two-year period “to encourage the carrier’s turnaround and a rationalisation of its operations”.

SAA should also sell off nonessential assets – in line with Nene’s comments of a rationalisation of state assets in his medium-term budget policy statement last year – and cut non-profitable flight routes.

The same philosophy should apply to other parastatals, DA finance spokesperson Dion George said.

The government should proceed with the partial listing of Alexkor, the South African Post Office, Denel and parts of the SABC.

The DA argued against any tax increases in Nene’s 2015 budget, saying instead the state should control spending and manage the public purse more prudently to rein in the growing fiscal deficit.

Noting that the public sector wage bill had swollen to 39% of total government expenditure in the past 20 years, George said it was imperative that it be restructured. This would get rid of “incompetent, ineffective cadres clogging up the management echelon”.

He conceded this would meet with resistance from organised labour and urged government to find the political will to oppose trade unions.

In contrast, the Congress of South African Trade Unions’ wish list for Nene’s 2015-2016 budget included fewer spending cuts and strategic nationalisation of assets.

Cosatu spokesperson Patrick Craven said the 2013 and 2014 budgets and medium-term budget policy statements had ushered in a brutal reality for the working class.

“The massive reduction in the budget deficit from 4.1% in 2014 to 2.5% by 2017 is achieved through real spending cuts, which can only cause the economy to further stagnate.”

Craven said the National Planning Commission should be given a new mandate to bring its plans in line with the state’s vision of radical economic transformation.

Cosatu called for comprehensive social security and land reform, and measures to ensure food security.

Tax reform suggestions included a solidarity tax which would cap the growth earnings of the top 10% and accelerate the earnings of the bottom 10%; and an increase in secondary tax on companies to encourage re-investment and job creation.

Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24


Man scores date with tennis superstar after Twitter bet

It’s a modern day Cinderella story, but one American man took ‘shoot your shot’ seriously in 2017.


You won't want to miss...

6 myths about male cancer
Who are the highest paid models of 2017?
10 gorgeous plus-sized models who aren't Ashley Graham
5 top leg exercises for men
Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.