Cosatu to strike if PIC funds go to bailout

Cosatu will go on a national strike if funds from the Public Investment Corporation (PIC) are used to bail out the ailing SAA, Parliament has heard. The Citizen reports that the federation was presenting its submission to the Standing Committee on Appropriations, detailing its concerns about the airline and its 10 000 workers. Last month, the PIC said it was not ruling out the possibility of bailing out the embattled SAA, after it received cash injections from the National Revenue Fund twice in three months earlier this year. In September, Treasury approved the transfer of funds from the National Revenue Fund to SAA for the airline to pay its debt to lender Citibank, which was due to be repaid by the end of that month. But Cosatu drew the line at using government employees’ pensions to rescue the airline. ‘It is also a matter of great concern to the 1.2m public servants,’ Cosatu told Parliament. ‘Government must not take this warning lightly. Teachers, nurses, police officers, prison wardens, doctors, public servants across the board will not hesitate to go on strike if government thinks it can allow the PIC and their pensions to be looted.’

Full report in The Witness

Cosatu also expressed concern that cost-cutting measures at SAA could lead to job losses, reports Fin24. Matthew Parks, Cosatu’s parliamentary head, was responding to statements by Thabang Motsohi, a strategy consultant with extensive aviation experience, who spoke about cost-cutting measures such as restructuring positions. ‘This could lead to thousands of jobs at SAA being at risk. It’s easy to say costs are too high and jobs must be cut, but we’re talking about people with families here,’ Parks said. The report says he also took issue with utterances that Telkom is a good example of how a state-owned enterprise has come out of the woods and increased its balance sheet. Parks said it is difficult for Cosatu, which represents two-thirds of workers at the collective bargaining council, to be sympathetic towards government’s difficult fiscal position.

Full Fin24 report

The government will, however, continue supporting SAA as the airline rebuilds itself. Engineering News reports that this is according to President Jacob Zuma who said: ‘The medium-term budget policy statement has already indicated that some institutions – that have also been draining government resources – such as some state-owned enterprises are required to achieve a turn-around,’ said Zuma. He said some of government's key milestones include the ‘recapitalisation of SAA’. SAA has been reportedly given R5.2bn in bailouts this year, the report says.

Full Engineering News report