Goodbye TV Licence — More South Africans stop paying

The SABC says its revenue from TV licence fees continued to decline in the 2022/2023 financial year, recording its biggest increase in evasion since the Covid-19 pandemic.

This confirmation came from SABC Board chair Khathutselo Ramukumba during a briefing to Parliament’s Communications and Digital Technologies portfolio committee early last week.

Ramukumba revealed that the TV licence evasion rate over the last financial year was “somewhere upwards of 87%”, increasing from the 82% evasion rates in 2021 and 2022.

Stated differently, less than 13% of TV licence holders paid their fees last year, compared to roughly 18% in the two previous years.

While the broadcaster has struggled to collect most of its TV licence dues for several years, the evasion rate jumped over 80% in the first year of the Covid-19 pandemic.

The SABC TV licence evasion rate from 2018 to 2023 is as follows:

  • 2018 — 72%
  • 2019 — 69%
  • 2020 — 81%
  • 2021 — 82% (82.1%)
  • 2022 — 82% (81.7%)
  • 2023 — 87%

The chairman also confirmed previous reports about a loss of over R1 billion in the SABC’s 2022/2023 financial year.

“This board is inheriting an institution which has reported a loss of R1.1 billion at the end of March 2023,”

Ramukumba blamed several factors on the loss, including increased competition from streaming services, load-shedding, and the analogue switch-off reducing advertising revenue.

Ramukumba lamented the regression after the previous board had managed to help reduce the broadcaster’s financial losses.

When the previous board was appointed, the SABC was roughly in the same financial position.

“Over the last five years, that loss was beginning to decline, or there seemed to be progress,” Ramukumba said.

The SABC’s losses decreased from R977 million in the 2017/2018 financial year to R200 million in 2021/2022 — then multiplied over five-fold in the latest financial year.

Those improvements were supported by a substantial cut in the broadcaster’s workforce, with over 600 retrenchments in early 2021, and a recent tax-funded bailout of R3.2 billion.

“The projections for the 2022/2023 financial year were that the SABC would be breaking even with some marginal profit being reported,”

“Unfortunately, despite the interventions of our predecessor board and the bailout, that progress that has been made in reducing those losses did not come to fruition.”

Unsustainable funding model

Ramukumba said the broadcaster was currently using “ailing” revenues from the commercial side of the business to finance its public service mandate, which was unsustainable.

“The loss position proves the answer of the unsustainability of this current funding model,” he said.

The SABC has proposed that the country’s dominant pay-TV broadcaster and streaming services collect the fees on its behalf.

Civil society organisations like the Organisation Undoing Tax Abuse (Outa) agree that the SABC needs a new funding model.

However, it does not concur with the proposal that private broadcasters or streaming companies must collect the fee, nor a previous idea that a tax must be added to the sale of electronic devices that can access the SABC’s platforms.

It argues those proposals could have unintended consequences and said that the businesses and electronics were already taxed in other ways.

Outa instead wants the SABC to get some of its funding needs from levies or general tax allocations.

However, it maintained the best practice would be that the SABC becomes financially viable as a broadcaster of choice and not a necessity.

Ramukumba’s board was only appointed in April 2023 — over six months after the previous board was dissolved.

For nearly six out of the 12 months of the 2022/2023 financial year, South Africa’s public broadcaster had no board to oversee the SABC’s operations and expenditures.

Several parties are being blamed for this glaring government failure.

Firstly, the portfolio committee on communications and digital technologies left the interviews, public participation, and vetting processes to the last minute.

The need to use the State Security Agency to vet candidates was also called into question.

Secondly, the Speaker of Parliament took two weeks to forward the recommended candidates to the president’s office.

Lastly, President Cyril Ramaphosa took over three months to approve the board.

The Presidency blamed this final delay on the committee muddying waters by providing an additional six reserve names for consideration, including three candidates with possible conflicts of interest and trustworthiness issues.

Now read: SABC Rugby World Cup streaming problems — fix in the works

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Goodbye TV Licence — More South Africans stop paying