EDITORIAL: Minister scores cheap populist points for ANC with union allies
Yet again, it will be the taxpayer who is on the hook
At a time when the economy is bleeding jobs and the government’s priority is to take millions of South Africans off the unemployment queue, it is easy to see why the state-owned public broadcaster’s proposal to slash 13% of its workforce is painful and makes for bad politics.
And grandstanding by Stella Ndabeni-Abrahams, the communications minister, is also a striking example of a wider tendency for the government to do nothing about its failed economic model and foundering state-owned enterprises even as the country’s sovereign debt rating sinks deeper into junk territory.
The SABC laid out plans last week to retrench as many as 400 workers, joining a host of companies from banking and manufacturing industries to the hotel and tourism sector that have been trawling the coffers to build resilience against the rolling coronavirus-induced economic contagion.
Predictably, the cost-cutting measure drew swift rebuke from union leaders.
The Communication Workers Union expressed anger at the processes it called illegal and demanded the broadcaster withdraw retrenchment letters to workers. Labour federation Cosatu described the plan as “ill-advised and regrettable” while the Broadcasting, Electronic, Media and Allied Workers Union launched a court application to halt the process.
But it is perhaps more difficult for the board of SABC to advance their rescue mission if it does not have the backing of the government, which is represented as a shareholder by Ndabeni-Abrahams.
Ndabeni-Abrahams, who has blocked previous retrenchment attempts at the SABC, leading to the resignation of board members in 2018, entered the fray, calling on the broadcaster to consider alternatives and effectively derailing painful but necessary structural reforms hobbling the broadcaster.
In addition to what the board is already up against, the ANC is not in favour of the restructuring programme that will lead to job losses, with secretary-general Ace Magashule telling the broadcaster in an interview on Wednesday the party expects its MPs and its deployees at SABC’s board to vote down the proposal.
Unsurprisingly, the board appears to be caving in to pressure. In detailing the outcome of an emergency meeting with Ndabeni-Abrahams on Thursday, the broadcaster said it would put a hold on the retrenchment notices to allow further consultations and explore other options to ensure the sustainability of the organisation.
It’s a victory for unions but more so for Ndabeni-Abrahams, who has helped the ANC score political points with its union allies, and depicted the party as caring about workers ahead of the 2021 local government elections.
But just as it did in 2018, the cost of her populist meddling could put the taxpayer on the hook again and all but vindicates Moody’s Investor Service’s and Fitch’s decisions to downgrade SA on grounds that the government is unlikely to eliminate enough of the structural rigidities that hamper the country’s growth potential.
Months after she scuppered plans for the SABC to save R400m through job cuts, the SABC held out a begging bowl to Treasury asking for the more than R3bn in cash injection, which was advanced in 2019. The proposed job cuts should save the public broadcaster R700m, which is still not enough to wean it off state support as it has put in a request for a R1.5bn bailout package.
When the minister with the backing of the ruling party asks the board to consider alternatives to job cuts, it’s difficult to see how jobs will be spared for the organisation groaning under a draining cost-to-income ratio — which measures the cost of running a business in relation to its operating income — of 110%.
That is despite a nearly one-third drop in expenditure on content and another 16% drop in spending to upgrade its infrastructure as more than half of the SABC annual revenue of R5.7bn flows back to its roughly 3,000 workers.
It is baffling for Ndabeni Abrahams to think there are alternatives to retrenchments. Her grandstanding last week is an illustration of kicking the can down the road on unpopular reforms meant to foster economic growth and place public finances on a more sustainable path.
And ratings agencies, especially Moody’s, have woken up to the reality that political leaders will not risk facing the consequences of unpopular decisions.
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