Bad news for the SABC’s TV Licences hopes

The proposal to replace the SABC’s TV licence fee with a broadcasting tax will take more than five years to implement.

That is according to feedback provided to the Sunday newspaper Rapport by Dominic Cull of Ellipsis Regulatory Solutions, a telecoms sector regulator specialist.

The ANC’s national executive committee first discussed a household levy to replace TV Licences in December 2020.

This followed the publication of a draft white paper in October 2020 that called for fundamental changes to the SABC’s funding model.

“There will be a comprehensive overhaul of the SABC’s funding model based on international best practices to ensure that the public broadcaster has adequate funds to meet its public mandate,” the white paper proposed.

The SABC brought the proposal to public hearings of the SABC Bill in September 2021.

In simple terms, the broadcaster wants TV licences to become a tax that households and businesses must pay, irrespective of whether they consume the SABC’s content or own a TV set.

Communications minister Khumbudzo Ntshavheni recently announced that the ANC supported dropping the licence in favour of a household levy.

This was one of the resolutions the ANC’s communication commission took during the party’s national elective conference in December 2022.

Ntshavheni said that TV licences were not a sustainable mechanism for funding the public broadcaster and confirmed that government had started drafting the relevant framework for a household levy.

But Cull says the minister’s 3–5 year timeline to scrap the TV licence fee was much too short.

He explained that the process would require intensive engagement with other departments, such as National Treasury, to allow the levy to be incorporated into the government budget.

That would only come after complex legalities around the issue are first ironed out.

In addition to the drawn-out legal and financial processes, Cull maintained that there would be fierce public resistance to the household levy.

TV licence collection rates have plummeted to dismally low levels in recent years, worsened by the Covid-19 pandemic making it more difficult for licence holders to make payments and putting increased financial pressure on households.

Over the SABC’s last two financial years, the portion of TV licence fees recognised as revenue was around 18% — over 80% of TV licence holders had not paid their fees.

The low compliance rate has cost the SABC multiple billions of rand in revenue each year, causing it to report substantial annual losses rather than profits.

Former SABC board member Michael Markowitz, who works as a media expert at the Gordon Institute for Business Science (Gibs), told Rapport it did not make sense to scrap TV licences.

Instead, he believes that government should fix the “broken” methods for collecting licence fees.

In the past, the broadcaster had TV licence inspectors going from door to door to confirm whether households were compliant, but this approach proved too costly.

These days, non-compliant TV licence holders are sent threatening SMSs, but this has not seemed to have the desired effect.

Among the threats used by the broadcaster is that it will activate a “trace alert” on the TV licence holder’s profile at the credit bureau.

The Organisation Undoing Tax Abuse previously calmed fears that this could impact the holder’s credit record.

Outa explained that the SABC doesn’t fall under the National Credit Act’s jurisdiction, which meant it could only impact your credit record if the broadcaster chose to get a court order against you.

Given the SABC’s dire financial situation, it seems unfeasible for the broadcaster to pursue legal cases against the millions of individual non-compliant TV licence holders.

These threats also only target those who previously had a TV licence and stopped paying. Households that have never had a TV licence continue to fly under the radar.

Getting MultiChoice to do its legwork

In addition to proposing the broadcasting levy as a possible replacement for the TV licence, the SABC has also advocated for the country’s dominant subscription TV provider to be required to help with collections.

MulrtiChoice currently remains South Africa’s dominant pay-TV service.

While MultiChoice has supported the idea of a broadcasting levy, it is heavily opposed to bearing any responsibility for its collection.

The broadcaster had over 9 million subscribers in South Africa by the end of September 2022, while the SABC’s database contained 10.3 million TV licence holders.

Based on these figures and the low level of compliance, it is reasonable to assume that many DStv subscribers do not pay their TV licences.

Despite the SABC’s TV channels and radio stations being available across all DStv packages, the law does not require those that buy a DStv decoder to present a valid TV licence.

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