The struggling South African Post Office has once again received a temporary lifeline from government through the approval of a R381-million “income support” grant that will pay salaries for the next six months.
The subsidy takes the total bailout amount government has given to the Post Office to R9.8-billion since 2014. The company, which has been in business rescue – a form of bankruptcy protection – since July 2023, has asked treasury for a further R3.8-billion from the public purse.
According to a Thursday statement by the chair of parliament’s portfolio on communications and digital technologies, Khusela Diko, the R381-million subsidy will come from the labour department’s Temporary Employer/Employee Relief Scheme (Ters) fund.
“This is a much-needed lifeline that the state is both morally and duty bound to extend,” Diko said in the statement. “The wage subsidy signals an important milestone in the ongoing work to rescue, resuscitate and ultimately futureproof the Post Office. The subsidy is expected to reduce its cost burden and forms part of the building blocks towards the completion of business rescue processes.”
The Post Office has retrenched almost 5 000 employees since entering into business rescue. The Ters funding is meant to protect the remaining 6 000 jobs by providing up to 75% of employee salaries. Ters salary relief has a cap of R241 110 per person over a 12-month period.
‘Find the money’
Last September, business rescue practitioners Anoosh Rooplal and Juanita Damons told parliament that the Post Office would have no alternative but to be placed into liquidation should a R3.8-billion bailout not be received by November 2024.
The state-owned company’s fate looked all but sealed when national treasury made no mention of any bailout in its medium-term budget policy outlook statement last October, with finance minister Enoch Godongwana encouraging the department of communications to “find the money” to assist the entity.
Read: Post Office gets emergency short-term bailout
Treasury in February granted the company a R150-million “virement” aimed at “addressing immediate financial pressures”, Diko at the time said these funds were inadequate as they would only cover the company’s expenses for a month before more money was needed.
In a statement on Thursday afternoon, the business rescue practitioners said: “The Post Office is grateful that the Ters committee has recommended to the Unemployment Insurance fund that financial support be granted. These funds were applied for by the Post Office in December 2024 and will assist to pay some of the salary expenses of the business for the next six months. This will assist to contribute to a future of the business and improve the cash flows.” – © 2025 NewsCentral Media
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