The Congress of South African Trade Unions (COSATU) says government must only invest pension funds in state-owned enterprises based on a comprehensive business plan that would enable that company to become a sound contributor to the economy.
This comes as government considers using pension funds to invest in South African Airways.
Finance Minister Tito Mboweni says they are considering various funding options.
In the video below, Minister Tito Mboweni delivers virtual Supplementary Budget speech:
COSATU general-secretary Bheki Ntshalintshali says the state should not continue to bail out SOEs.
He says that government’s use of public pension funds is not a new practice.
“We need to just accept that money has to be invested in the economy there’s nothing new about workers’ money being invested. We are of the view that the purpose of that money as they being invested must be invested to benefit both the economy and it has to give some good return.
Against the law
Meanwhile, the Free Market Foundation says the consideration of investing pension funds in state-owned enterprises is against the rule of law.
The foundation’s executive director, Leon Louw, says government should give up its stake in SAA as best business practice instead of letting the private aviation sector take its place.
“The money that is being thrown down the drain wasted on trying to rescue SAA and SA express could have provided every SA homeless person with a home. The private sector is perfectly capable and willing to provide all the air transport required. This is private people’s money, it’s the pension funds mainly of civil servants. Government and the Treasury should not even be talking about using PIC money. The trustees of the PIC are obligated by law to invest the money only in the interest of the people whose money it is. They may not use the money for political purposes and political programmes.”
In the sound clip below, government says it might use pension funds to invest in SAA:
In the video below, Treasury denies claims it wants to change laws governing pension funds: