Phosa: Bailouts immoral

Johannesburg - ANC treasurer-general Mathews Phosa has slammed as "immoral" proposals to provide bailout packages to South African companies under threat from the global financial crisis.

Phosa's views are in line with those expressed by Finance Minister Trevor Manuel, but apparently at odds with calls made by ANC labour and communist alliance partners.

They have increasingly called for more interventionist industrial policy measures to protect vulnerable sectors and safeguard jobs.

The ANC election manifesto promises government will do all in its power to protect jobs, and the National Economic Development and Labour Council (Nedlac) recently thrashed out an agreement with strong protectionist undertones in response to the global crisis.

Speaking at the Cape Town Press Club, Phosa said that creating and protecting jobs were indeed priorities but bailouts - especially for companies going into liquidation - would be "immoral" and a way of punishing those companies and industries that had managed to survive the present economic hardships.

Responding to critics' claims that the ANC has been hijacked by the SA Communist Party (SACP) and labour union confederation Cosatu and was at risk of dispensing more populist largesse than was affordable, Phosa said: "The ANC government will never spend more money than it has."

He said that when the ANC observed that 60% of the population was made up of the rural poor and when it stated that these people needed priority attention, it was not a SACP or Cosatu observation.

"It is an ANC observation," said Phosa. He also stressed that the ANC alliance partners "would never take control of ANC economic policy".

Phosa also pointed out that the SACP and Cosatu leadership had "no guarantee of being in the new cabinet". Anyone who did make it to cabinet would be there to implement ANC policy, as other SACP members had done in the previous cabinets.

- Fin24.com