It is disturbing to realise that recently another enormous lifeline was quietly given to SA Express while all the attention was on handouts to Eskom, the SAA and the SABC. According to the Free Market Foundation, SA Express received a lifeline of R1,24 billion from the government in November last year and was now given government guaranteed financing amounting to R300 million.
It seems that the Free Market Foundation forced SA Express by means of the Promotion of Access to Information Act to disclose its financial statements and managerial account data.
SA Express has become a large hole draining tax money from the fiscus dam and if it continues in this way, it will drain everything until there is nothing left. The ANC will have to realise at some point that the country does not have an inexhaustible source of money and that public enterprises cannot be saved from financial ruin indefinitely.
Like with e-toll, taxpayers will get to a point where they will no longer be willing to pay tax and then stand by and watch as it is squandered. The inevitable consequence is tax avoidance that will lead to tax evasion.
The government must know that the public enterprises that are swallowing up so much money will ultimately have to be sold and unbundled to ensure the stability of the government. Just like the public enterprises, the government itself has nearly reached a point where it will need a lifeline from the International Monetary Fund (IMF).
The Chinese ambassador has already indicated that the country is no longer willing to award loans to South Africa with the implication that South Africa is not investor grade quality. If that is the case, the government will be forced to borrow money from the IMF.
That will create a situation where very strict conditions will be set for financial aid to South Africa and on the long term, this will be a good thing seeing as it will undoubtedly require that Black Economic Empowerment (BEE) and Affirmative Action (AA) must be abolished and that merit, among other things, will be used to help the economy recover. Under ANC rule, such measures are the only things that can turn the economy around.
The lifeline to SA Express is just another nail in the ANC’s coffin, which will result in the South African economy being turned over to the hands of the IMF to save the country from a Venezuela and Zimbabwe outcome.