SABC’s above-inflation salary increases under scrutiny

Fury mounts at 5% pay rise offered during an economic bloodbath by a broadcaster that has already been bailed out to the tune of billions

The cash-strapped SABC has come under severe criticism after giving its employees above-inflation increases of between 5% and 6%.

This decision has raised questions about the prudence of the public broadcaster, which has been in financial turmoil for a number of years.

A government official, who spoke on condition of anonymity, decried the move as shocking, given the SABC’s weak financial state.

The official added that the broadcaster would most likely return to government with a begging bowl within months.

The source also said the increases would not go down well with National Treasury.

“Can you imagine if Treasury reverses the increases while the employees have already spent the money?” asked the official.

An independent newspaper journalist, who also asked to remain anonymous, said: “The SABC is reliant on taxpayers’ money and should be responsible in the way it spends state bailouts – which are, in effect, our tax contributions. It is unfair that staff are getting increases while some of us are receiving only 60% of our salaries. What makes them special when all other companies are cutting costs and not giving any increases?”

The broadcaster, which has not made a profit in six years, said it was expecting to record a loss for the current financial year.

The salary increases come at a time when several media houses are shutting down operations and others are cutting employee salaries because of the financial squeeze forced on them by the Covid-19 coronavirus pandemic.

The increases are being awarded merely six months after the SABC received a massive R2.1 billion bailout from the state.

The broadcaster’s management confirmed the increases, but said the money did not come from the bailout; rather, it was part of a three-year wage agreement that was struck with workers.

The SABC’s chief executive, Madoda Mxakwe, said management had adopted a policy of negotiating salaries for a three-year period to avoid labour unrest and having to negotiate on an annual basis.

He said the SABC had already entered into agreements with labour unions before the current economic downturn.

“In April 2018, the SABC board approved a three-year settlement with organised labour for the period of 2018 to 2020. This included an increase to management of 1% lower than the bargaining unit. The bargaining unit percentage increase was a conservative 5% and 6%, respectively,” Mxakwe said.

“These projected increases were included in the respective approved corporate plans over the period. The percentage increases were substantially less than the 10 years preceding this agreement, when increases ranged mostly between 8% and 11.5%.

“It must be noted that these salary increases are self-funded from operational cash generated.

“The bailout funds were not used for these increases. They have been ring-fenced and utilised for the priority areas that were identified with the shareholder and Treasury.

“The SABC holds a monthly monitoring meeting with Treasury and the department of communications on the utilisation of the bailout fund.”

Several media houses, including Independent Newspapers and Arena Holdings, have slashed workers’ salaries by anything from 20% to 40%.

Media24, which owns City Press, Rapport and Daily Sun, among other publications, informed its workers last month that it would not be offering salary increases this year.

The SABC has been struggling financially for a number of years.

The situation worsened in June last year, when the broadcaster could not afford to pay its staff or its service providers, including the production houses.

In October, Communications, Telecommunications and Postal Services Minister Stella Ndabeni-Abrahams announced that the national broadcaster was to receive R2.1 billion as part of a R3.2 billion bailout package.

She said the state had set stringent conditions for the SABC to adhere to before releasing the money, including implementing several cost-cutting measures and revenue enhancements.

Read: Ndabeni-Abrahams promises financial relief for SABC

Prior to releasing the funds, Ndabeni-Abrahams said the public broadcaster had met most of the conditions outlined by government.

One of these conditions was that the SABC conduct a skills audit and other forensic investigations into how it was losing money.

The broadcaster has since conducted several investigations of this nature.

One such probe revealed that employees allegedly used the SABC as their personal fiefdom by irregularly awarding huge discounts – sometimes up to 85% – to big corporate clients, resulting in the public broadcaster losing at least R1.5 billion in much-needed revenue.

A forensic investigation into the SABC’s commercial enterprise division scrutinised 35 top advertisers who had contributed the lion’s share of the R6.6 billion in net airtime sales over 18 months.

The report, by Nexus Forensic Services, was finalised in October.

It found that clients – including advertising agencies, network providers, insurance giants and fast-food franchises – were handed discounts totalling R1.517 billion between January 2018 and June last year.

In one instance, an insurance firm only paid 15% of the advertising rate after an official unilaterally gave a discount of 85% – against the broadcaster’s own policy on advertising discount rates.

The SABC was also found to own several properties, including a flat in the UK and farms that were liabilities, and therefore adding no value to the broadcaster. 

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