Department of Communications on its amended Annual Performance Plan, with Minister

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Communications

04 September 2018
Chairperson: Mr H Maxegwana (ANC)
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Meeting Summary

The Portfolio Committee on Communication met with the new Minister of Communication and the team from the Department of Communication (DoC) to discuss the reprioritisation of the Annual Performance Plan (APP). The Committee asked the Department to give it guarantees that its turnaround strategy would be implemented with haste, and to brief it on the impending retrenchment of 800 SABC workers reported by the media. The Minister said that the media was trying to pre-empt a decision by SABC management to retrench 800 people in order to re-skill the corporation and put it in the 21st century league of broadcasters. She would brief the Committee fully after she had discussed the matter with the SABC board.

The areas of focus of the amended APP were a review of the current delivery model for digital terrestrial television (DTT), creating a new vision for broadcasting, and stabilising its entities --particularly the SABC and the Media Development and Diversity Agency (MDDA). The reasons for the reprioritisation of APPs were the Department’s constrained resources, the looming general elections, the Minister’s budget vote, the ailing entities -- such as the SABC and the MDDA -- and the delay in the introduction of DTT as a result of not being able to afford the project.

The DoC explained the impact of the delay in implementing DTT, the changes made, the proposed DTT delivery model and plans to stabilise state-owned entities. The stabilisation involved building internal capacity and strengthening oversight, employing a turnaround strategy in the SABC and improving governance at the MDDA. The DoC also addressed plans to create a vision for broadcasting, and its reprioritised plans for its programmes in the APP. It appealed to the Committee to engage with stakeholders to find ways of increasing SABC resources to ensure that it fulfilled its mandates and played its role as a modern public broadcaster.

The Committee complimented the new Minister on her efforts at improving the efficiency of the Department, and asked questions about aspects of the SABC turnaround strategy, the initiatives at the MDDA, and the challenge of collecting SABC licence fees. It resolved that a discussion on the impending retrenchment of the 800 SABC workers would be part of the agenda at the next meeting.

It advised the Minister that the Broadcasting Amendment Bill would be sent to her office after the Parliamentary processes had being completed, and resolved that more appropriate means of collecting licence fees would be discussed with the SABC Board during the next meeting. It commented that a lack of funds hampered the SABC from fulfilling its mandates, and did not make it a good example of a public broadcaster.

Meeting report

The Chairperson said the purpose of the meeting was to discuss the reprioritisation of the Department’s Annual Performance Plan (APP). However, he asked Members to reflect on some issues such as the outcome of the annual general meeting of the Board of the South African Broadcasting Corporation (SABC). The media had reported that the SABC Board was purportedly about to retrench 800 workers. The Committee also needed to reflect on the turnaround plans of DoC and the Broadcasting Amendment Bill that had not yet been completed. The Committee was of the opinion that although the former Minister’s view had been incorporated into the Broadcasting Amendment Bill, the new Minister’s views needed to be captured before it was finalised. He reminded Members that a Parliamentary process needed to be followed before the Broadcasting Amendment Bill was handed over to Minister Novula Makonyane. He invited Members to make comments.

Mr M Kalako (ANC) said the DoC needed to give guarantees to the Committee on the turnaround strategy, and to provide more information on the impending retrenchments reported by the media. He proposed that the proposed Broadcasting Amendment Bill be sent to the office of the new Minister.

Ms P van Damme (DA) agreed that the proposed Bill be sent to the office of new Minister, and suggested that the Committee convene another meeting on the impending retrenchments reported by the media.

Mr B Bongo (ANC) agreed with other Members that the proposed Bill be sent to the office of new Minister. The new Minister had to prioritise a meeting to discuss the reasons for the retrenchments. The last meeting on the turnaround strategy had been postponed because the Committee did not form a quorum. The Committee had to move with haste to engage on the turnaround strategy to ensure that it did not end up as a mirage. The engagements also needed to include the National Treasury.

The Chairperson invited the DoC to reply to the comments and emphasised that the meeting to discuss the turnaround strategy had been postponed because Members had not formed a quorum.

Department of Communications’ turnaround plan

Minister’s overview

Ms Nomvula Mokonyane, Minister of Communications, agreed that the DoC would welcome a meeting to discuss the impending retrenchments reported by the media. She also agreed that the DoC needed to make a presentation to the Committee on its annual general meeting. The media was just trying to pre-empt the decision by management to retrench 800 people, which was seeking to re-skill the SABC and put it in the 21st century league. It was a mystery how the media had heard about the retrenchments, because the Board had not given the media any statement.

The management intended to meet with the SABC Board to discuss progress on the turnaround. The new administration of the DoC had been doing its best to move the Department forward since its inauguration, despite the short timeframe and limited resources. After an assessment of its critical programmes, it had highlighted the programmes it would not be able to deal with because of the limited resources and the short timeframe.

The areas of focus of the amended APP were reviewing the current delivery model of digital terrestrial television (DTT), to get it back on track, and to create a new vision for broadcasting and stabilise its entities. As a result of the media and Parliaments’ attention, and the challenges faced by the SABC and the Media Development and Diversity Agency (MDDA), the DoC had chosen both entities as the first to receive intervention.

Free State province had been chosen as the flagship for DTT interventions, and it was worthwhile to mention that despite the land appropriation challenges, a white farmer in the Free State had given the DoC permission to use his land to install DTT facilities. A project management office (PMO) had being proposed as the nerve centre for DTT. The positions of group chief executive officer (CEO), chief operating officer (COO) and chief financial officer (CFO) had been filled, and a spokesperson for stakeholder relationship management had also been appointed. In the spirit of gender equality the CFO and stakeholder relationship management were females, while the CEO and COO were males.

The SABC was still suffering from the side effects of the inquiry, so it was not a question of staff not been paid, but mainly a witch hunt of staff who were loyal to the old administration. The National Treasury (NT) was in support of the interim solutions to stabilise entities in the DoC, although it had not provided any interim financial solution for the SABC yet.

She highlighted some of the short, medium and long term plans to turnaround the SABC, but said the SABC needed to commit to a vision of broadcasting that educated and informed communities based on its mandate. A colloquium had therefore been planned for 6 to 7 September to review public broadcasting policy.

The steps taken by the DoC to improve the MDDA included filling of board and executive vacancies, and a review of governance frameworks. The challenges faced by the DoC with regard to the MDDA and SABC were the lack of a full audit of community radio, and the implementation of digital migration, respectively. The implementation of digital spectrum would open up opportunities for new role players, and she asked the Committee to provide oversight over the audit of community radio.

She welcomed the return of the Broadcasting Amendment Bill back to her office, and said that it would ensure that it was inclusive and reflect the changes of the 21st century. She asked the Chairperson to allow the acting Director General (DG) to run through the brief and also to allow the CFO to explain the financial aspects of the turnaround plans of DoC.

Annual Performance Plan amendments

Dr Mashilo Boloka, Acting DG: DoC, said the amendments focused on three areas, as detailed by the Minister. The amendments were due to the constrained resources, looming general elections, the Minister’s budget vote, the ailing entities -- particularly the SABC and MDDA -- and the delay in the DTT project as a result of not being able to afford the project. The effects on the industry were the uncertainty of the policy, which impacted on investment and growth, particularly in the free-to-air platform (FTA), missing the deadline for the switchover from analogue to DTT, and the late adoption of new technologies.

The changes include creating a vision for broadcasting, overhauling the current delivery model of DTT to keep it on track, stabilising the DoC entities and improving internal capacity, as stated by the Minister. The proposed DTT delivery model involved strengthening project oversight through the Project Management Office (PMO) and allowing government to supplement the activities of the PMO through communication-related activities.

As stated by the Minister, the DoC intended to build internal capacity and strengthen oversight, employ a turnaround strategy in the SABC and improve governance in the MDDA. Internal capacity would be built by addressing critical skills shortages, institutionalising annual general meetings (AGMs) as platforms for shareholder/Board engagements and accountability, and set up a multi-disciplinary team from finance, human resources, legal and internal audit.

The short and medium term plans for the SABC turnaround include appointing a turnaround specialist service provider to work with the DoC, the SABC and National Treasury to facilitate and develop the turnaround plan and ensure its immediate implementation. The Minister was also meeting with the Board Chairperson of the SABC and African Rainbow Capital (ARC) Investments. In the long term, the public broadcasting policy would be reviewed through a colloquium, as mentioned by the Minister. The short and medium term plans to improve governance at the MDDA included the filling of vacancies and a review of the governance framework and instruments, particularly the MDDA Amendment Bill, the Memorandum of Incorporation (MOI), shareholder compact and Board Charter.

The mechanisms to create a vision for broadcasting were accelerating the audio-visual policy review process, strengthening the FTA platform, reviving the local content industry, transforming the media and developing small, medium and micro enterprises (SMMEs). The DoC also intended to improve its communication capacity, build trust and lift staff morale.

He highlighted the performance indicators, the annual targets for 2018/19 to -2020/21, and the impact of the strategic goals.

Budget reprioritisation

Ms Dikeledi Thindisa, CFO: DoC, gave the medium term allocation for each programme for 2018/19 to 2020/21, based on the funds allocated, and commented that transfers and subsidies had the highest amounts because DoC had to send funds to its entities. The percentage of operational budgets versus the total budget for 2018/19, 2019/20 and 2020/21 were 3.595%, 3.52% and 3.50% respectively. R1.1 million, which was earmarked for the consultation and gazetting of the Audio Visual Bill, had been re-prioritised for the broadcasting colloquium. R837 000 had been re-allocated to a new unit, Media Policy. Other funds had been re-allocated to Programme 1 for office space, infrastructure, security and cleaning (R5.319 million), training (R3.427 million), and R2.51 million had been repriortised for the internal audit section and external audit fees. R2.705 million had been repriortised to develop SMMEs, and the same for local content.

The total number of posts filled was 88, of which 73 were permanent and 15 were contract positions. The DoC had six funded vacant posts -- one Director General, three personal assistants, one senior administration officer, and one senior state accountant. An analysis of the number of personnel required for each programme and the number presently employed showed a high variance, so she appealed to the Committee to engage with NT to increase the number of funded vacant posts.

Dr Boloka said the DoC was committed to deliver on its mandate, despite the budget. A revision and reprioritisation of the APP was needed because of the limited resources.

Minister Makonyane said the DoC would brief the Committee on the progress in the three areas that had been prioritised. She solicited the Committee’s assistance in engaging with NT to increase the budget allocation of the DoC to ensure that it could carry out its mandate, and be on a par with other nations of the world.

Discussion

The Chairperson informed the Minister that the Broadcasting Amendment Bill would be sent to her office after the Parliamentary processes had being completed. He observed that the DoC was continuously re-priortising because of limited budget resources, which did not make it a good example of a Communications Department. If the country did things correctly, the DoC budget needed to be on par with other countries. During the Minister’s overview, she had compared the limited budget allocated to the SABC and its mandates. The Committee needed to emphasise that licence fees had to be collected, as many subscribers did not pay, yet the same subscribers paid for pay TV. During the next meeting, the Committee would engage with the Board to find more appropriate ways to enforce collection of licence fees. He also remarked that the picture painted by the CFO on vacancies was demoralising, and he asked for comments from Members.

Mr M Kalako (ANC) agreed with why DoC needed to reprioritise its APPs, especially with the importance of DTT. He asked for feedback on the encryption cases and court actions against the Department. He asked the Minister to give the Committee a guarantee that the Cabinet was being carried along on the DTT process to ensure that it did not have challenges after the structures had been put in place. He noted that the Independent Electoral Commission (IEC) had received funds to advertise the elections, but the SABC was the entity that had the mandate to educate people on elections. He asked, therefore, if there could be a way to ensure that the funds were paid directly to the SABC.

Minister Makonyane conceded that DoC found itself in a position of having to reprioritise due to limited budget allocations. She agreed that it was important to deal with the issue of licence fees, because the same citizens who did not pay licence fees paid for pay TV. However, the DoC needed to deal with challenges of the quality of some of the SABC programmes and the SABC channels that were on pay TV. The former Minister had accepted the court decisions, so the DoC was bound by them. An inter-ministerial committee that comprised the Department of Home Affairs (DHA), the DoC and other departments worked together on elections, and funds were allocated to the IEC. The SABC could educate voters, but it would be unfair if it had to educate voters without the funds. The Committee should assist the DoC in this regard.

Ms Van Damme said she welcomed the review of the MOI-Shareholder Compact-Board Charter, and looked forward to the final version. She said the Committee should look at ways to ensure that funding be given to the SABC directly to educate voters, based on its mandates. The DoC should inform the Committee of its plan concerning the retrenchment of 800 workers. The Committee was against bail-outs for state-owned agencies, so the DoC should inform the Committee in confidence of its alternative funding modules, apart from those of the NT.

The Chairperson asked the Minister not to reply to the question on retrenchments, because the Committee had agreed that it would be part of the agenda for the next meeting.

Ms Makonyane said the DoC would brief the Committee on the review of the MOI-Shareholder Compact-Board Charter. It would not look at its budget allocation, but at ways to fulfil its mandates based on best practices obtainable in other countries. The SABC needed to have a hybrid that made it accessible and self-reliant. Advertising was important to pass a message across, but most government agencies did not use the services of SABC as a first line of communication, rather using other means such as private print media. She suggested that the DoC needed a closed forum to take the Committee into confidence on the real issues that would allow the SABC to enter the next level.

Dr Boloka remarked that the mandate of the SABC was to inform and educate people, and in developed countries public broadcasters such as the SABC were funded by government departments.

Mr L Mbinda (PAC) commended the Minister and the DoC executives on the efforts taken to carry out its mandates, despite the limited resources allocated to it. He agreed with the strategic move to allow PMOs to be the nerve centre of the DTT, and also supported the appointment of the CEO, CFO and COO, saying the filling of strategic vacancies would ensure stability in the DoC. He asked if the Broadcasting Amendment Bill would consider issues raised during the inquiry, as some of them affected smaller political parties. The funding challenges of the SABC did not affect the entities under DoC alone, but the Committee would ensure that the NT was aware of how limited resources affected government programmes.

Mr N Xaba (ANC) joined other Members in welcoming the steps taken by the DoC to reprioritise its APPs. He asked the DoC to specify the number of staff needed to carry out the roles in each programme, to assist the Committee when it engaged with the NT. He asked the Minister to clarify if a specific departmental cluster addressed election issues.

Minister Makonyane said an inter-ministerial Committee worked with the DHA and DoC, but the funds were allocated to IEC directly. It was quite a challenge for the SABC to fulfil its mandates without appropriate funding, and it needed to be empowered to carry out its mandates. The IEC determined what should be done, and the Independent Communications Authority of South Africa (ICASA) carried it out. The funding for elections was determined by the IEC Act.

Mr Bongo commented that the funding received in arts, culture and sports was higher than that of education and information, so he suggested that the funding models in these other areas be compared with those of the SABC, which focused on educating and information mandate. He asked the DoC to clarify if lawyers’ retaining fees were part of the licensing fees. Why were the funds allocated to procure office space and transfers so high, because offices procured in some communities were offered for less? The DoC had to ensure that all the funds for transfers were received by the re-prioritised programmes. He remarked that the DoC needed to work on implementing some of the recommendations of the inquiry, and questioned why it needed to employ a turnaround specialist to implement its turnaround strategy. He suggested that DoC should employ reskilling methods that allowed staff to move to other departments.

The Chairperson suggested that the Minister should wait for the next meeting before addressing the retrenchment questions, but stated that the DoC needed to prepare a brief as well.

Ms Makonyane agreed with the Chairpersons’ suggestion that the questions on retrenchment be answered after a presentation at the next meeting.

She said the DoC did not have the requisite skills for the turnaround strategy, so it was recruiting. She agreed with Mr Bongo that if the offices were located in communities, the office space procured would cost less. She would not comment on retrenchment plans until she had been informed by the Board. She commented that South Africans took every service as a “free for all,” so a culture of payment for services needed to be inculcated into its citizens.

Dr Boloka said the DoC would submit the information on bare minimum of staff needed to carry out their roles, based on its mandate, to the Committee.

The Chairperson said when the Committee met with DoC, it would discuss all the strategy needed to ensure the payment of licences.

Dr Boloka said the broadcast media in developed countries survived on licence fees, so the SABC needed to ensure that the fees were collected. In South Africa, the funds from licensing were further reduced, because 30% to 40% of the fees were claimed by lawyers.

Ms Van Damme expressed concern over how the SABC could carry out its oversight if it had limited resources, and asked if the SABC had had any over-expenditure on oversights in the past. She asked the DoC to give an update on the funding of the Government Communication and Information System (GCIS). Had the DoC had put in any mechanisms to develop contents? She asked about the plans put in place to address the funding of DTT, the timeframe for its implementation, and when the Committee would receive progress reports on DTT.

Ms Makonyane said content development rested with other departments. For example, a creative industry programme was run by the Department of Arts and Culture. She conceded that DTT implementation had been delayed, but she appealed to Members that it was better to have an enduring legacy in digital migration, rather than a project that did not follow best practices. She outlined the technical process, and said it did not follow political lines.

Ms Thindisa said the GCIS was a department on its own, even though it was under DoC. The Department transferred funds to it, but it was monitored by NT.  She said the DoC would submit its annual report to the Committee soon.

Ms M Matshoba (ANC) asked for clarity on the contract positions. She observed that in the past, the DoC had been through challenges, but she expressed happiness that the story was getting better and appreciated the new Minister for her efforts.

Ms Thindisa said the contract staff employed in administration, were staff in the office of the Minister and Deputy Minister (DM) who had left when the Minister and DM had been redeployed. The contract staff under programme three, were part of the DTT project and would leave when the DTT project was completed.

Ms Matshoba asked if the DTT project had a timeframe.

Ms Thindisa said the DTT project had a timeframe, but it was dependent on the recommendations on the project after it was reviewed.

Adoption of minutes

The Committee considered and adopted the minutes of 17, 18, 19 and 24 April, 29 May, 5 June, 14 and 21 August 2018, without any changes. The Chairperson informed Members that the updated programme would be forwarded to them.

The meeting was adjourned.

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