SABC’s TV licence nightmare

The South African Broadcasting Corporation’s (SABC’s) financial situation is deteriorating, and its failed TV licence scheme is one of the biggest contributors to its decline.

Despite this, the South African government appears to be in no rush to find a solution, with plans to give the Department of Communications and Digital Technologies three years to finalise an alternative funding scheme.

This clock also only starts running when the SABC Bill of 2023 is signed into law.

Emphasising the dire state of its finances, the state-owned broadcaster published its annual results for the 2022/23 financial year in September 2023, revealing a loss of R1.13 billion.

It was the biggest annual loss it has recorded since at least the start of the century.

“After seven years of consistently improving net losses, the year under review unfortunately saw a significant regression,” the SABC stated.

“This is as a result of revenue that was 7.9% less than 2021/22 financial year and 27% less than budget.”

The broadcaster’s mandate is to keep South Africa’s residents informed. However, years of wasteful spending, declining advertising revenue, and public disobedience regarding TV licences have taken a toll on the entity.

The SABC approached the National Treasury for a bailout of R1.5 billion in 2023, which was rejected.

Deputy Minister of Communications Philly Mapulane said the broadcaster had expected R1.5 billion in funding from the National Treasury in the Medium-Term Budget Policy Statement.

The deputy minister said the department hopes the 2024 Budget Speech on Wednesday, 21 February, will bring good news and that the National Treasury will respond positively to the SABC’s request for more funding.

Mondli Gungubele, South African Minister of Communications and Digital Technologies

It last received additional funding of R3.2 billion from the National Treasury during the 2021/22 financial year.

The SABC’s failure to collect TV licence payments significantly contributes to its dire financial situation, with TV licence revenue declining from R928 million in the 2013/14 financial year to R741 million in 2022/23.

It had billed R4.5 billion in TV licence fees during the financial year.

TV licence avoidance rates increased significantly between the 2013/14 and 2022/23 financial years, from approximately 70% to over 85%.

“Compliance levels declined further compared to the previous fiscal. Non-compliance was observed from all licence types (households, businesses, and Government entities),” the SABC said in its 2022/23 annual report.

It added that government entities owed R56 million in TV licence fees. It also acknowledged that “apart from the use of Debt Collection Agencies, there is no compelling alternative available to enforce compliance”.

“The absence of enforceable compliance measures does not change behaviour and will continue to impact the Corporation’s financial sustainability,” the broadcaster said.

Therefore, South Africa must find an alternative funding scheme for the SABC.

Alternatives to the SABC TV licence scheme

Despite the broadcaster’s deteriorating financial situation, the government doesn’t appear to be in much of a rush to implement a solution.

South Africa’s recently published draft SABC Bill proposed that an alternative funding model framework only be finalised within three years of the legislation being passed.

Before it gets that far, communications minister Modli Gungubele must formulate a “comprehensive and relevant feasibility study to inform a clear business case for the corporation’s funding model in consultation with the minister of finance”.

A three-year delay in implementing an alternative to the TV licence scheme could further worsen the public broadcaster’s financial situation.

Khumbodzu Ntshavheni, former communications minister and current minister in the Presidency, previously announced another potential alternative to the TV licence scheme in January 2023.

Khumbudzo Ntshavheni, Minister of Communications and Digital Technologies

She said the African National Congress (ANC) supports scrapping the SABC TV Licence in favour of a household levy, which would be charged regardless of whether residents watch the SABC’s content or own a TV.

This is because the proposed tax would be technology-neutral and based on a household’s ability to access SABC content.

The idea of a household tax is similar to Germany’s Rundfunkbeitrag (broadcasting fee) — a monthly levy of €18.36 (R376.56) to help fund public broadcasting.

The ANC’s national executive committee previously discussed the possibility of a household tax in late 2020, following the publication of a white paper calling for changes to the funding model in October that same year.

The SABC also proposed a similar idea in September 2021 during public hearings for the draft SABC Bill.