DA says bailouts for ailing Post Office must be stopped

14 April 2023 - 07:00
By SINESIPHO SCHRIEBER
The DA says the Post Office is a hopeless case and should be closed.
Image: EUGENE COETZEE The DA says the Post Office is a hopeless case and should be closed.

The DA does not want the Post Office to get any more bailouts after the R2.4bn budget allocation by government. This despite it facing financial problems and being taken to court by creditor because of its multibillion-rand debt. 

Business Day recently reported the entity was placed under provisional liquidation after a successful court application by a creditor owed money for rent. 

According to the post office's 2022 annual report, the entity last March had a debt of R4.4bn. It blamed low revenue that left it unable to pay crucial creditors, including contributions to medical aid, the pension fund, UIF and Sars. 

Closed branches have become familiar sight in many suburbs with community members struggling to access its services due to rent not being paid. The DA says the entity as a whole should be shut down.

The party's first move in this call is to block the National Treasury from giving more money to the Post Office by writing to finance minister Enoch Godongwana, urging him not allocate any more money to the entity. 

DA MP Dianne Kohler Barnard said while liquidators seek money for those owed, the party hopes Post Office employees and retired workers’ medical aid, UIF and pension contributions will also be paid in full. 

“This liquidation may indeed be the final straw for one of the most mismanaged entities in the communications department. We stand firm in our belief that the Post Office, being one of the many bottomless pit state-owned entities battling operational issues, is beyond repair, and should be liquidated” she said. 

Godongwana in the 2023 budget speech allocated it R2.4bn.

“The DA is against any form of bailout and will write to the minister of finance and call on him to confirm that there is no new bailout for Sapo but if there is, it must be used to pay the benefit contributions for staff and pensioners, not to cover debt to avoid liquidation,” the DA MP said. 

The Post Office has been financially struggling for some years and even turned to retrenchments to stabilise its books. In February, it brought down retrenchments from 6,000 to 3,900 but also said it was even struggling to finance the retrenchments.  

Speaking to TimesLIVE earlier, Post Office spokesperson Johan Kruger said the entity was obliged to retrench to stabilise its finances from a downward trajectory. 

“The Post Office has been successful in cutting other costs, reducing expenses to 25% below budget. However, the salary cost makes up 68% of total expenditure and needs to be addressed urgently.” 

The Post Office has not yet commented on the liquidation question. 

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