No word yet on SAA money, but Mboweni continues to tout zero-based budgeting

Finance minister Tito Mboweni delivering SA's coronavirus budget. (Parliament of SA)
Finance minister Tito Mboweni delivering SA's coronavirus budget. (Parliament of SA)
  • The National Assembly on Wednesday agreed to the Division of Revenue Amendment Bill.
  • Finance Minister Tito Mboweni made no mention of potential funding for SAA during the debate, but said the country should apply zero-based budgeting going forward.
  • The Department of Public Enterprises is expected to provide SAA's business rescue practitioners proof that it has obtained the required funding.

Finance Minister Tito Mboweni reiterated that, going forward, the country should work on a zero-based budgeting system that prioritises growth-enhancing expenditure, but made no mention of potential funding for national carrier South African Airways during a debate in the National Assembly on Wednesday.

The National Assembly agreed to the Division of Revenue Amendment Bill, allowing Treasury to reprioritise expenditure items to fight the Covid-19 pandemic. The bill will go to the National Council of Provinces for consideration.

On Tuesday, the national carrier's creditors voted in favour of a business rescue plan, which would require R10.3 billion over a three-year period and working capital of about R2.8 billion to get the airline operating again during July and August, Fin24 previously reported. Government's deadline for providing proof of funding for the airline was 15 July. 

Mboweni did not comment on the latest developments at the airline, but stressed the importance of zero-based budgeting instead.

"We should seek going forward to be on a zero-based budgeting system. That system would allow us to prioritise even more those items which are unavoidable, growth enhancing and assist in propelling the economy going forward, whilst supporting our people."

He explained that every cent needs to fulfill the purpose it is budgeted for, and that "thieves and wolves at the door" be kept away so that South Africans can benefit from the little in the state coffers. 

During the debate, DA MP Geordin Hill-Lewis said that Mboweni should "draw a line in the sand" and refuse to fund the new airline.

"We are putting the Minister on notice that any attempt to use 'emergency' powers under Section 16 of the Public Finance Management Act will likely be illegal, and we will take action to stop that," Hill-Lewis said.

Mboweni hit back at Hill-Lewis' remarks, saying that they had an air of "superiority" which he did not take kindly to.

He also called out FF+ MP Werner Wessels for threatening a tax revolt. Mboweni said it is "incorrect"" to do such a thing. 

Mboweni added that at this hour of need, he thought that all members of Parliament would rally behind the bill.

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