Proposed SABC commercial unit to be exempt from PFMA provisions

The government wants the SABC’s proposed commercial arm to be excluded from the Public Finance Management Act (PFMA) so it is not bound by the transacting and reporting requirements of the legislation.

One proposal in the SABC Bill is to separate the broadcaster’s public service mandate from its commercial mandate by establishing a commercial arm that won’t be subject to the PFMA.

“The new entity won’t be subject to the PFMA,” deputy minister of communications and digital technologies Philly Mapulane said on Tuesday.

Presenting the bill to parliament’s portfolio committee on communications and digital technologies, Mapulane said the intention of creating a commercial arm is to exclude it from the PFMA so it can compete in the market without the constraints that come with the law.

Advertising in broadcasting has migrated to online platforms which don’t have any regulatory obligations.

“They do not have public or commercial mandates to fulfil but they are taking much-needed revenue from broadcasters,” Mapulane said.

“The over-the-top [streaming] platforms are basically eating the lunch of local broadcasters. It’s a matter we are seeking to intervene in, both through the bill and other policy interventions.”

The bill seeks to position the SABC to compete in the digital era where the broadcasting landscape has substantially changed.

It also seeks to address the issue of funding for the SABC, in particular its public funding mandate, and to address “regulatory impediments” facing the public broadcaster, which competes with commercial stations that don’t have regulations like the PFMA, Mapulane said.

While the bill does not necessarily propose a funding model, Mapulane said it was the department’s view the TV licence funding of the SABC’s public mandate isn’t sustainable and a new mechanism is needed.

“We have made a proposal that using TV licence fees to fund the SABC is not viable, given the high evasion rate, and we have proposed the introduction of a household levy and a move away from the TV licence fee.”

The bill proposes the minister of communications should develop a funding model within three years of its enactment.

MPs heard the three-year period is intended to give the communications minister and National Treasury sufficient space to agree on an appropriate funding model.

Mapulane said raising revenue for the SABC was one of the sticking points with Treasury, which led to the delay in drafting the bill.

“The three years is a compromise position to accommodate the views of Treasury that any revenue-raising measure doesn’t impact negatively on the economy,” he said.

Communications minister Mondli Gungubele told parliament in September that among the efforts to deal with the broadcaster’s financial woes, government was looking to establish a subsidiary through which the SABC could compete in the commercial environment.

He said this was partly because about 80% of the corporation’s revenue depends on advertising. However, for the SABC to be competitive in that space it has to be freed from certain regulatory measures.

TimesLIVE