South Africa: Idiotic State TV stations massive wastage and inefficiency: SABC blowing R3.2-billion bailout — and now wants a TV tax
New Nation News
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The South African Broadcasting Corporation (SABC) is rapidly burning through a R3.2-billion bailout that it received in October 2019, the Auditor-General has warned parliament.
“The financial bailout was earmarked for specific spending on capital projects, acquisition of content and settlement of other operational liabilities,” the Auditor-General of South Africa (AGSA) stated in a parliamentary briefing note.
While the bailout improved the SABC’s cash position, the Auditor-General said several issues might cast significant doubt on the public broadcaster’s ability to operate without relying on bailouts.
AGSA highlighted the following concerns:
Continuing operating losses are forecast over the next three years.
Negative operating cash flows are forecast until at least the 2022 financial year.
Projected capital expenditure (Capex) was significantly lower than the required investment per the Capex plan. Management has indicated that funding will be approved based on the availability of cash.
AGSA noted that forecasted decreases in operating cash flows resulted in concerns that insufficient cash may be available to cover the minimum predicted operating expenses, including salaries.
The SABC incurred a net loss of R530 million in 2021 — even worse than its R511 million net loss in 2020.
While the public broadcaster has cut expenses, its revenue is in freefall, causing a worsening net loss year on year.
This is because South Africans are increasingly refusing to pay their TV licences, with the evasion rate increasing from 80.6% in 2020 to 82.1% in 2021.
Therefore, only 18% of registered TV licence holders are paying their dues. This measure excludes the many households with a TV that are not registered as needing a TV licence in the SABC’s systems.
At the same time, the SABC’s advertising revenue plummeted by R740 million, an 18% decrease.
To arrest this decline, the SABC and Department of Communication and Digital Technologies proposed several alternatives to South Africa’s existing TV licence system. These include:
A new tax — a general per-household public broadcasting levy.
Expand TV licences to include smartphones and computers. Force private broadcasters like DStv to collect TV licence fees on the SABC’s behalf.
MultiChoice has baulked at the second option, saying that it was unreasonable to expect it to take responsibility to collect fees on behalf of a competitor.
Among the reasons the SABC no longer wishes to collect its own TV licence fees is due to the escalating costs of debt collection.
To provide the SABC with temporary relief from this expense, communications minister Khumbudzo Ntshavheni has backed a proposal to introduce a TV licence amnesty.
“We believe that if the SABC achieves this amnesty, they will be able to use the opportunity to improve their financial standing,” Ntshavheni stated.
AGSA noted that selling the SABC’s bad debt is one of the key actions that have been abandoned in favour of the TV license moratorium or amnesty.
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