The TV licence is already dead

The Organisation Undoing Tax Abuse (Outa) says South Africa’s TV licence system has already failed, and waiting years to change the SABC’s funding model could create huge financial problems for the public broadcaster.

“The SABC is owed R44 billion in TV license fees, a massive financial hole that successive ministers have failed to address,” Outa stated.

“This year, the SABC reported a monetary loss of R1.13 billion.”

In its formal submission to Parliament about the draft South African Broadcasting Corporation SOC LTD Bill, Outa said it was extremely disappointed with the proposed legislation.

“The Bill singularly fails to address the funding crisis and does not provide any solutions,” Outa stated.

“The promise to develop a funding model framework (not even a funding model itself) within three years is obscene when the SABC is expected to continue with its existing unworkable funding model for another three years in the face of its financial collapse.”

Parliament published the bill for public comment in October last year, and communications minister Mondli Gungubele was criticised for its lack of action.

“The bill has effectively kicked the funding can down the road by not laying out any specific changes or proposals,” said Outa senior legal project manager Andrea van Heerden.

“Instead of the bill dealing with the SABC’s financial crisis, TV licences remain, and deliberations on a new funding model are kicked down the road for three years,” Van Heerden stated.

“More so, the Minister of Communications and Digital Technologies, in consultation with the Minister of Finance, alone is tasked with identifying a new funding model.”

A new funding model is urgently needed because South Africans are refusing to pay their TV licences, with the SABC calculating that the licence evasion rate stood at 85.8% at the end of its 2023 financial year.

Stated differently, only 14.2% of households who previously bought a TV licence paid their bill in 2023.

The evasion rate does not account for people who never had a TV licence.

Even South African government entities owed the SABC R56 million in TV licence fees at the end of the 2023 financial year.

Outa said while it supports the continued existence of a National Broadcaster, the proposed SABC Bill of 2023 fails to address critical issues of financial sustainability.

It also raises red flags of government interference in the commercial and operational aspects of the SABC.

“By making the SABC subject to Ministerial veto, it invites executive and political interference,” Outa stated.

“The Bill exacerbates the concerns of political interference in editorial decisions particularly in the run-up to the 2024 elections, including by the regressive requirement making the CEO and not the Head of News, the Editor in Chief.”

This creates room for potential cadre deployment and government agendas to flourish, Outa warned.

Mondli Gungubele, South African Minister of Communications and Digital Technologies

“Outa strongly believes that a long-term solution to its funding model is of utmost importance, and while it is pleasing to see government consider an alternative funding model, [we are] concerned over how long it will take to identify and implement such an alternative,” the civil action group stated.

The civil action group said that although hasty changes to funding should be avoided, the SABC needs financial certainty in the interim — which the bill does not provide.

“Outa in its submission again urges the committee to consider a regular annual state grant for the SABC’s public broadcasting services, instead of flogging the dead TV licence fee collection model,” it stated.

According to Outa, this would avoid the irregular and disastrous last-minute bailouts but provide a more stable revenue stream, particularly for the public broadcasting sector.

“This regular annual state grant could be seen as a grant in the furtherance of democracy,” said Van Heerden.

“Outa suggests cutting funding to wasteful programmes and diverting some of this to the SABC. For example, the national and provincial legislatures could provide some funding in the furtherance of democracy.”

Van Heerden said these institutions manage to provide hundreds of millions of rand to political parties to support democracy.

“Outa believes some of these funds could be more usefully diverted to the SABC.”

Outa urged the Parliamentary Portfolio Committee on Communications and Digital Technologies to refer the SABC Bill back to the department for amendment.