NEVA MAKGETLA: Robbing Peter to pay Paul is not an effective funding strategy for SOEs
Innovative thinking is needed as cutting social services to rescue SAA is not a viable option
The 2020 budget has brought home the cost of rescuing Eskom and SAA through fiscal transfers. To pay for them, the government plans below-inflation increases in funding for education, health care and the police. The Treasury has in effect bet that it can impose a wage freeze on public sector workers to save services despite the real cuts in budgets.
Nonetheless, the planned payments to Eskom and SAA come at the cost of crucial investments in citizens and communities. That points to the need for much more rigour and innovation in designing support for the state-owned enterprises (SOEs).