Big TV licence change planned for South Africa

The South African Broadcasting Corporation (SABC) is expected to move forward with plans to introduce a TV licence moratorium or amnesty period in South Africa. This was confirmed in an auditor-general report to parliament on Wednesday (9 February), with the national broadcaster facing billions of rands in irregular expenditure and continued losses over the next three years.

A TV licence amnesty period is expected to give the SABC an opportunity to improve its financial standing. It currently costs the SABC money to employ debt collection agencies to follow up on non-payments. A clean slate could also improve collections as citizens do not have to worry about making back payments. Amnesty could also ease the SABC’s move to a new collection model which aims to focus on a general levy rather than individual licences.

Communications and digital technologies minister Khumbudzo Ntshavheni has previously mooted an amnesty period, which she said could provide the SABC with more breathing room to deal with its financials.

“We are awaiting the concurrence of the National Treasury so that we can take the matter to parliament to make sure that there is an amnesty on TV licences,” she told parliament in November. “We believe that if the SABC achieves (this amnesty), they will be able to use the opportunity to improve their financial standing,” Ntshavheni said.

The auditor general’s report shows that the SABC also plans to outsource its TV licence operation to third parties going forward, while a number of website enhancements are expected to make it easier for South Africans to pay online. Under current regulations, first-time applicants for a television licence must pay the full annual fee of R265. Renewals must then be made annually before the licence expires, with users given the option of paying R264 each year or R28 in monthly instalments.

Further losses forecast 

The SABC received a financial bailout of R3.2 billion in October 2019 which helped improve its cash position. The bailout was earmarked for specific spending on capital projects, acquisition of content and settlement of other operational liabilities.

Despite this additional funding, the auditor-general forecasts that operating losses at the national broadcaster are expected to continue over the next three years, while negative operating cash flows are forecast until at least the 2022 financial year. “The forecasted decreases in operating cash flows resulted in concerns that insufficient cash may be available to adequately cover the minimum forecasted operating expenses, including the salary costs,” it said.

“The projected capex spending 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.”

From: Business Tech