SAFTU notes the report by the Auditor General that the South African Post Office is commercially insolvent. Commercially insolvent entities are those which have their liabilities above their assets. The SA Post Office has accrued liabilities exceeding their assets to the tune of R1.5 billion, and “incurred losses of over R1.7 billion” in the 2019/2020 financial year, according to the Auditor General.
The crisis in which the SA Post Office finds itself, is a consequence of several factors. Mainly, corruption in the public sector and a deliberate sabotage or exploitation of state owned enterprises by the private sector, including the SA Post Office. The collapse of state owned enterprises (SOEs), in which corruption and private sector sabotage play a huge role, are used as a pretext to reduce government participation in provision of goods and services and to set a precedence for the privatisation of these enterprises.
Camouflaged as the patriotic bourgeois, the development of the parasitic capitalists lies entirely on leveraging some ownership in private enterprises through Black Economic Empowerment (BEE) and utilising SOEs through tendering or management as sources for wealth accumulation. Part of what is called ‘state capture’, is basically an attempt (and success) by the contending political elite to harness SOEs for the accumulation of capital. The inevitable feature in this process, however, is the looting of the state enterprises which comes at a cost to the public.
For instance, the SABC reports that the SA Post Office has incurred more than R200 million in irregular expenditure, and over R26 million in fruitless and wasteful expenditure. In Eskom, there was R3 billion irregular expenditure at Kusile power plant alone in 2020, over R19 billion in irregular expenditure in 2018 dating back to 2012. The Auditor General reported that over R1 billion was irregularly spent. The irregular and wasteful expenditure worth over billions of Rand is incurred every year by other SOEs such as SAA, SABC, Transnet, Denel, etc.
The cost to the public for all SOEs has been poor services, increased costs for public goods and services, costly to the taxpayers as looting put most of the SOEs in a loss making position in which they have to constantly be bailed out by government. Surely, any SOE should be providing their public services at affordable prices to the public. But more so, in a case where government constantly bail out SOEs, it should follow as a logical conclusion that the public should benefit from moderate or low prices of such goods or services and offered at an acceptable quality.
However, this is not the case for South Africa. For example, Eskom has requested successive bailouts from government in billions of Rand, yet it has been increasing tariffs on electricity, the burden of which is shouldered by ordinary South Africans. Despite the increase in electricity tarrif and constant bailout, load shedding has become a constant feature of this service.
Regarding the SA Post office, wasteful and irregular expenditure has seen the SOE’s quality of services falling, closures of numerous branches and mass retrenchments of post office workers.
The decline in the quality of services meant that customers were serviced at low rates in the branches and thus creating long queues. This has led to declaration for the improvement of services in post office, by Independent Communications Authority of South Africa (ICASA), setting a standard service time to not exceed seven minutes per customer. Due to the severe strain of cash injection or revenue generation, the SA Post Office has closed about 55 branches and retrenched 1 871 workers, and transferred many more onto precarious contracts.
The private sector, clearly in cahoots with the neoliberal policy makers in government, have their fair share of contributing to the crisis in the SOEs. These SOEs purchase many of their required resources from the private sector, which inflates their prices and thus increases the input and operating costs of the SOEs. This further plunges these already corrupted institutions deeper into crisis, like that faced by the SA Post Office.
The unbundling of Post Bank from the SA Post Office demonstrates the fact that this crisis serves to justify the gradual privatisation of SOEs. Hence, the Minister of Communications, Stella Ndabeni-Abrahams, gladly told the members of parliament that the private sector and “ordinary South Africans” were excited with the unbundling. Beyond “repurposing”, corruption will soon plunge it into further crisis and a concrete case will be made for total privatisation. The megaphones of capital, anyway, contrary to reality, would have us believe privatisation is the immunized answer to corruption in the public enterprises.
In the case of Eskom, senior government officials have likely colluded with the parasitic bourgeoisie to engineer a crisis of coal supply and dwindling coal reserves. This has led to two developments: increasing coal prices and the perpetual crisis used to make the case for the privatisation of Eskom and our energy supply.
SAFTU condemns this.
SAFTU is further dismayed at the fact that no one has yet been arrested for the theft within SOEs, nor for any wasteful expenditure that has led to the collapse of the SA Post Office. Consequently, SAFTU calls on government to investigate and arrest those involved in the looting of the SA Post Office.
SAFTU fights for protection of SOEs as they are supposed serve the poorest of the poor. Their collapse means that working class households will not get quality services, and eventually, will have to pay for these services from private service providers at expensive rates.