We soon won’t be able to pay salaries at SABC, Parliament hears

SABC board member Mathatha Tsedu told Parliament’s portfolio committee that SABC’s own Day Zero is approaching as soon as the first quarter of next year, saying the cash-strapped state-owned entity won’t be able to pay salaries.

“We are now in phase two of our forecast. Phase three is the extreme one where our supply dries up in terms of revenue coming in. At the end of January, we will be at a point where we can pay salaries and some other things. February, we might not even be able to pay full salaries. March will be our day zero, if nothing changes here,” said Tsedu.

He said the SABC has approached treasury but is waiting to find the solutions from those engagements, as the situation is so dire that the office of the Auditor General has declared them as a non-going concern.

SABC CEO Madoda Mxakwe said the wage bill was part of the cost reduction drives that the broadcaster was considering in an attempt to keep the business stable.

He said for the current financial year, the SABC had a total expenditure of R3.5-billion, which was significantly lower than before.

Mxakwe told the committee that the SABC was pursuing savings of R463-million by cutting costs in sports rights. He said these cuts were painful in terms of efforts to draw viewers, but was necessary.

He added that the SABC also cut costs in marketing by more than R36-million.

“One of the biggest concerns for us is (despite) having done this, projections show losses of R803-million by the end of March next year,” said Mxakwe.

He said the current salary bill stands at 43% of revenue, pushed up by lower middle management.

Earlier this month the SABC board issued a statement indicating that as part of its restructuring process to cut costs, it may have to retrench workers. The board warned that almost 1 000 permanent employees and about 1 200 freelancers may be affected. The state broadcaster appointed the Commission for Conciliation, Mediation and Arbitration to consult on the matter.

Communications Minister Nomvula Mokonyane has since criticised the board over the looming retrenchments, saying it was pre-emptive and not in compliance with the s189 retrenchment process in terms of the Labour Relations Act.— Fin 24

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Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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