SABC plans three-year wage freeze

The SABC, which has just gone through a retrenchment process, is planning to impose a wage freeze on its employees for the next three years to contain costs.

This mirrors what the government plans to do with its public-sector employees to reduce the budget deficit but public-sector trade unions are vigorously contesting the plan.

By the end of March, 621 employees had left the lossmaking broadcaster, 275 by retrenchments in redundant positions and 346 with voluntary severance packages which cost R164m.

The total annual compensation of the staff who left was R457m.

SABC executives told parliament’s communications committee on Wednesday night that the broadcaster would have covered the cost of the voluntary severance packages in the fifth month of the current financial year, and would then realise savings of R292m on salaries.

That, together with a wage freeze (excluding medical aid contribution increases), would translate into R600m in savings on the salary bill in the next three years.

The salary bill is budgeted at R2.8bn for 2021/2022 reducing to R2.5bn in the following two years.

MPs were told that the SABC was expected to make further losses in 2021 and 2022 and to break even thereafter.

The wage freeze would be lifted once the broadcaster broke even, SABC chief financial officer Yolande van Biljon said during a briefing on the

SABC’s corporate plan.

A loss of R844m on revenue of R5bn is forecast for the 2020/2021 financial year and R603m for 2022 and then a profit of R150m is forecast for 2023 and R348m for 2024.

Revenue is expected to grow 28% in 2021/2022, 17% in 2022/2023 and 13% in 2023/2024.

The broadcaster’s cash position is expected to deteriorate this year due to expected operating losses and planned capital expenditure.

Van Biljon said in terms of the SABC’s turnaround plan, numerous initiatives were envisaged to increase revenue.

The broadcaster expects revenue from licence fees to rise 29% in 2022 through the investment in content and marketing and through enhanced collection methods.

This will be tough to achieve considering that, on average, 75% of TV licence fees were not paid over the past three years, with the situation worsening during the Covid-19 pandemic because people were under financial pressure.

The under-collection of licence fees is a chronic challenge facing the SABC and DA MP Phumzile van Damme believes its method of collection is not working.

The broadcaster also intends launching a drive to increase advertising revenue 21% in 2021/2022, but Van Biljon cautioned that there was a risk that this forecast growth might not materialise.

The SABC has allocated R30m for coverage of the local government elections, during which it is obliged to give political parties airtime.

It has also acquired the rights to cover the Olympic Games, which are scheduled to take place between July 23 and August 8.

Discussions are under way with the government on the cost of the SABC fulfilling its mandate as a public broadcaster which, in the past three years, has amounted to R4.8bn and is expected to total R5.7bn in the next three years.

The cost of the mandate includes all programming it is required to broadcast in terms of the regulations of the Independent Communications Authority of SA (Icasa), licensing conditions and editorial policies

TV licences and a grant from the government cover part of the cost of fulfilling its mandate, with the rest being unfunded.

Communications minister Stella Ndabeni-Abrahams said engagements were continuing within the government about the funding of the SABC’s unfunded mandate.

The broadcaster had submitted proposals which were being reviewed by her department and Treasury.