Chairperson, the ACDP shares the view that most of our state- owned enterprises are facing serious corporate governance issues resulting in weak decision-making, operational confusion, financial uncertainty and a failure to deliver.
Minister, we welcome your unequivocal comments on chief executive officers who consider themselves above or beyond the boards. These and other corperate governance issues must be addressed. We support the appointment of that panel to look into these issues.
The SOEs have become a considerable drain on the fiscus, even if one speaks of R26 billion - or the amount of R240 billion the DA spoke about - that has been spent to bail them out. The question arises then: When does one decide to stop the funding of these SOEs? Does one then decide to sell them off or parts of them, as has been done? Even if they were sold off at bargain-basement prices, would this step not, in any event, result in a saving for the National Treasury or, on the other hand, the loss of strategic enterprises?
In mitigation on behalf of the SOEs - as a good lawyer one must argue in mitigation - they have had to operate against a backdrop of investment backlogs. We have to admit that there has been political interference and, of course, let us not forget about the global economic crisis.
I am sure you are aware of the recent Financial Mail article that stated that:
The business models for public enterprises are fatally flawed ... They encourage political interference and reward wrong behaviour.
The article also points out that whilst some private sector financial measures are obviously useful for SOEs, the danger is that executives are awarded for getting priorities wrong. And the issue of executive remuneration is, of course, being addressed. An example of this is that in January 2008, the power crisis was triggered by coal shortages, with managers running down inventory, which is a financial measure, rather than maintaining a stockpile, which is operational - and, clearly, getting priorities wrong there. We've heard of other instances of this this afternoon.
Minister, as far as the World Bank loan is concerned, and this has been repeated continually, we as the ACDP were one of the first parties that said that party funding must be transparent and open. We supported that legislation. So, we are concerned that five years after the Idasa court case we still have not seen that legislation. One doesn't want to say that it has been deliberate because of the World Bank loan, but we would have liked to have seen that legislation. It is clearly not your fault, but that legislation should have been in place a long time ago.
In conclusion, the ACDP agrees that Parliament will have to monitor cost- cutting measures closely to reduce the costs for SOEs. We need to know what savings will be affected and within what timeframes, and SOEs must no longer - in the words of the Minister of Finance - be allowed to "ratchet up salaries, spend on frills, travel in luxury and spend more on marketing the agency than in fixing the service".
However, we would like to express our gratitude to the chief executive officers, the board members and officials who are hard-working and honest and who are trying to make a success of the SOEs, notwithstanding the challenges they face. We will try to cut you some slack. Thank you, Minister. [Applause.]