30/08/2017 06:20 SAST | Updated 30/08/2017 06:31 SAST

Government Considers Using PIC Funds To Save SAA

Government is reviewing all its options, including using workers' benefits to rescue the failing airline.

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Photo: Waldo Swiegers/Bloomberg via Getty Images

Government cannot rule out using the Public Investment Corporation (PIC)'s funds – essentially workers' pensions – to capitalise state-owned companies like SAA, Business Day reported on Wednesday.

Government needs money to bail out the failing national airline, and options could include selling its shares in Telkom, although finance minister Malusi Gigaba has said that government is reviewing all its options.

According to Business Day, Gigaba faced the ire of angry Cosatu leaders this week who wanted assurances that workers' pensions would not be used to bail out SAA or other state-owned enterprises.

The National Education Health and Allied Workers Union (Nehawu) reportedly said It would not support using the PIC to bail out SAA.

The union said it would not stand by while "workers hard-earned money is used to fund the looting spree currently taking place at SAA".

Gigaba reportedly told Parliament in June that he had not looked at the possibility of using the PIC funds.

But this week, a spokesman for Gigaba, Mayihlome Tshwete told Business Day that the finance minister had told Cosatu it could not take anything off the table.

"The minister was saying we should not have an assumption that this is something that can never be used and can never be touched because some of the benefits of what we are trying to target are national economic matters that affect everyone, including the people [who] are the pension holders," he reportedly said.

Cosatu's central executive committee is currently locked in a meeting, and is debating the issue.

Cosatu spokesman Sizwe Pamla told Business Day the federation had to be "reflective" and weigh up the cost of rescuing SAA versus what would happen to workers should the airline go under.

However, the union has always maintained the PIC should only be used to stimulate job-creation, he said.