The Organisation Undoing Tax Abuse (Outa) has praised the National Treasury for its recent move to reject Eskom’s request for an exemption from reporting irregular, fruitless and wasteful expenditure.
The decision, announced by Finance Minister Enoch Godongwana, highlights government’s commitment to combatting corruption and promoting transparency in state-owned entities.
Eskom had sought relief from a section of the Public Finance Management Act that would have allowed the cash-strapped power utility it to withhold information on its annual financial statements regarding wasteful expenditure.
However, following public outcry the National Treasury rejected the request, stating that Eskom needs to make greater operational efforts to combat fraud and corruption before such an exemption can be considered.
“The minister recognises the commitment of the Eskom board and management to fight and expose fraud and corruption, and the additional compliance and reporting burden facing Eskom and other state-owned entities,” said the Treasury.
“However, it is the view of the minister that Eskom needs to do more operationally to reduce the scope of fraud and corruption before such exemption can be considered, and for it to be effective.
“As Eskom attempts to recover from the devastating impact of state capture, and take steps against past and current corruption, it needs to ensure that its anti-corruption strategy is credible and has the support of key stakeholders like investors, lenders, suppliers, customers, and the public.”
Wayne Duvenage, CEO of Outa, expressed satisfaction with the Treasury’s decision, noting that it demonstrates an understanding of the public’s concerns regarding transparency.
Duvenage also expressed hope that the minister would explore alternative mechanisms to address the issue of misspending by state-owned entities in the future.
“Government’s about-turn on this shows an awareness of public anger over attempts to exempt Eskom and the value of consulting the public,” Duvenage said.
“We hope the minister will find a more transparent and effective mechanism for state-owned entities to address the problem of historical misspending.”
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