Cape Town - Labour expert Terry Bell has advised government not to succumb to the temptation to sell off underperforming state-owned enterprises (SOEs), but to rather reform them so that they still “belong to the people”.
Bell was talking to Fin24 about the implications of Malusi Gigaba’s maiden mini budget to labour and unions.
“They [the state] are now pouring more money into SOEs according to Malusi Gigaba, when we should in fact be revamping those SOEs. It’s not a question of selling them off, which is what the DA would want to do,” said Bell.
“[SOEs are] like a farm that was owned by the people, was helping the poorest of the poor – but was managed so badly that it’s in a complete mess. One of the dangers might be that government might decide to sell it off.
"They’ll get the money in the short term, then in private hands these very things which belong to the people will now be sold to the people at a profit, and that's the problem," said Bell.
In his mini budget address in Cape Town on Wednesday, Gigaba acknowledged “several worrying developments with regard to state-owned companies” in recent years.
“[There are] worrying trends of governance failures, corruption, operational inefficiency and the need for government bailouts,” said Gigaba.
He did not, however, announce or hint at plans to private SOEs, describing them as a vital means for the South African state to provide services to “neglected communities”.
“State-owned companies have played a critical role in the advancement of black professionals, managers and skilled workers, many of whom have gone on to play leading roles in the private sector,” said Gigaba.
Bell said that, despite the fact that unions and organised labour were “utterly appalled that we’re continuing to muddle on in exactly the same way as in the past”, he held out hope for a better future.
“What they [South Africans] actually need now is not another political party, or some new policy in another silo. They need radical transformation, perhaps based on the Bill of Rights.”
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