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Eskom tariff increases mean bigger bailouts, more job losses and an uncertain future

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Dear MyPE

The Democratic Alliance (DA) has written to Finance Minister Tito Mboweni to clarify by how much more government’s planned bailout for Eskom will be, and how exactly it will be financed.

On Thursday, the National Energy Regulator (Nersa) announced Eskom tariff increases of 9.41% for 2019, 8.1% for 2020 and 5.2% for 2021 which are lower than the 10% per year increases used to determine the R23 billion per year bailouts for the utility in the 2019 National Budget.

This means that the bailouts to be paid to Eskom will inevitably be increased to compensate for the lower tariff increases. It is for this reason the DA has written to Minister Mboweni to confirm the exact amount South African taxpayers will have to cough up to foot the bill.

As highlighted by the DA, the 2019 National Budget did not present a true reflection on the health of the country’s financial state of affairs. The higher than budgeted bailouts to Eskom prove this point. Bailouts to other parastatals were not budgeted for either. South Africans need to know how much more will be spent on bailing out failing state enterprises.

Until this information is given, the 2019 National Budget has not been presented in an honest manner.

Whether it is higher tariffs or larger bailouts, the situation clearly shows that government expects South Africans to pay for the ANC-sponsored corruption and maladministration while the governing party refuses to change its behaviour and do the right thing.

It is time that the failing ANC and top executives take responsibility as opposed to passing the buck to South Africans who are already struggling under the increased cost of living as electricity and fuel prices are on the rise. The situation at Eskom is inevitably weighing on the economy, and is detrimental to job creation.

The ANC has created a vicious cycle, holding the country to ransom with almost 10 million people unemployed as the biggest victims. The increase in tariffs is going to slow the economy down further and cost jobs. Alternatively, doing nothing will also slow the economy down and cost jobs. So, the only thing to do is to immediately take decisive action at Eskom, which we have not really seen apart from more talk shops.

The DA will continue to fight for South Africans and the need for serious action to re-evaluate the efficiency and effectiveness for monopolistic SOEs.

Regards

Alf Lees MP
DA Shadow Minister of Finance

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