ATC140711: Joint Report of the Portfolio Committees on Communications and on Telecommunications and Postal Services on their deliberations on Budget Vote 9: Government Communication and Information System (GCIS), and its entity, Media Development and Diversity Agency (MDDA), dated 11 July 2014

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Joint Report of the Portfolio Committees on Communications and on Telecommunications and Postal Services on their deliberations on Budget Vote 9: Government Communication and Information System (GCIS), and its entity, Media Development and Diversity Agency (MDDA), dated 11 July 2014

The Portfolio Committees on Communications and on Telecommunications and Postal Services, having considered the Strategic Plans, Budgets and Annual Performance Plans (APPs) of GCIS and MDDA, report as follows:

1. Introduction

Section 55(2) of the Constitution of the Republic of South Africa, Act 108 of 1996, states that the National Assembly must provide for mechanisms (a) to ensure that all executive organs of state in the national sphere of government are accountable to it; and (b) to maintain oversight of (i) the exercise of national executive authority including the implementation of legislation; and (ii) any organ of state. In terms of the Public Finance Management Act (PFMA), 1999, the Accounting Officers must provide Parliament or the relevant legislature with their respective institutions’ medium-term strategic plan and where applicable with its annual performance.

The Money Bills Amendment Procedure and Related Matters Act was promulgated in 2009, and provides Parliament with powers to reject or recommend the approval of budgets of departments. It also makes provision for the implementation of recommendations emanating from the committee’s oversight.

The aim of the report is to provide an overview of the 2014/15 Budget and APPs of GCIS and MDDA who appeared before the Committee as follows:

Department

Date of Appearance

GCIS

1 July 2014

MDDA

4 July 2014

Their strategic plans were referred to the PCC for consideration and report in the Announcements, Tablings and Committee Reports (ATC) Parliamentary Paper on Friday, 27 June 2014.

2. Government Communications and Information System (GCIS)

2.1 Overview

The Government Communication and Information System’s mandate is derived from section 195(g) of the Constitution of South Africa (1996), which stipulates that the public should be provided with information that is timely, accurate and accessible, in support of the constitutional principles of freedom of expression and transparency and openness of government.

The Government Communication and Information System was established in terms of section 7 of the Public Service Act (1994) as a strategic unit located in the Presidency to meet the demands of the broader democratic human rights environment, and to find ways of alleviating the isolation of citizens who, through apartheid, poverty and current circumstance are being deprived of the information that can help them take control of their lives and engage in dialogue with government.

2.2 Strategic Goals

GCIS strategic goals over the medium term are to:

· ensure coherent, responsive and cost effective communications services for all government programmes;

· ensure that it is a responsive, cost effective, compliant and business-focused organization;

· professionalise the government communication system, build a reliable knowledge base and enhance related communication products;

· maintain and strengthen a well functioning communication system that proactively informs and engages the public;

· provide efficient and effective communication services for government; and

· enhance the image of government and that of the state. Underlining these strategic goals would be the theme ‘celebration of 20 Years of Freedom Campaign.’

2.3 Policy Priorities for 2014/15

In accordance with the outcomes based performance management framework adopted by government, GCIS contributes to the development of an efficient, effective and development-orientated public service and an empowered, fair and inclusive citizenship (Outcome 12). It responds by implementing programmes that communicate market and publicize government’s infrastructure-led economy as well as other national policy frameworks ( National Growth Path and National Development Plan ) in every corner, street and avenue of the country through its various programmes, activities, as well as online and print publications.

2.3.1 2014 State of the National Addresses (SoNAs)

Every citizen irrespective of their social class (where-ever located, rural or urban, poor or rich) should have access to a choice of a diverse range of media and impart information. This is guaranteed by Chapter two, the Bill of Rights of the country’s Constitution. Access to communications and information empowers citizens to facilitate participatory democracy, and assists in defending, advancing and deepening democracy.

On the 13 th of February 2014, in his first State of the Nation Address (SoNA) President Zuma pronounced that “liberation and democracy have created space for an active civil society and a free media.” In the second SoNA, President Jacob Zuma dedicated his speech on the economy, particularly the successful implementation of National Infrastructure Plan in which the department participates. The President pronounced, “ we will expand, modernise and increase the affordability of information and communication infrastructure and electronic communication services including, broadband and digital broadcasting

2.3.2 The National Development Plan (NDP)

Among government’s key policies the NDP aims to eliminate poverty and reduce inequality by 2030. South Africa can realise these goals by drawing on the energies of its people, growing an inclusive economy, building capabilities, enhancing the capacity of the state, and promoting leadership and partnerships throughout society. Underpinning the NDP in the communication sector will be the development of the dynamic and connected information society and a vibrant knowledge economy that is more inclusive and prosperous.

The more citizens are informed about government programmes, plans and activities, the more they are empowered to hold government accountable to improve on service delivery. The department therefore contributes to citizen participation by facilitating two-way interaction between government and the public by organising Imbizo public engagement programmes and publicising government’s development-related initiatives through the media. The department will continue to use community and stakeholder liaison visits for the effective communication of Cabinet decisions.

The department has, over the past five years, working with other government departments, continued to communicate and facilitate communication campaigns informed by the following priorities: job creation, education, health, rural development, and the fight against crime and corruption. The department will also continue to provide strategic communication support to government departments through transversal communication campaigns that place special emphasis on national priorities.

The department will further support government in building a capable state by maintaining good relations at provincial and local government levels, and establishing and strengthening provincial and district communication forums. The department also aims to professionalise the government communication and information system through the development of training course content and identifying, coordinating and implementing effective training programmes for government communicators. This will ensure more coordinated efforts in communicating government plans, programmes and achievements.

Lastly, the department aims to take a direct role in communicating the NDP by conducting research to measure the willingness and participation of citizens in their own development.

2.3.3 The New Growth Path (NGP)

The medium term policy plan, NGP is the government's key programme to take the country onto a higher growth trajectory. The NGP is about creating the conditions for faster growth and employment through government investment, microeconomic reforms that lower the costs of business (cost of communications for poor households and business), competitive and equitable wage structures, and the effective unblocking of constraints to investment in specific sectors.

In an effort to communicate market and publicize government’s infrastructure-led economy as well as the national policy frameworks of government’s NGP, the Industrial Policy Action Plan (IPAP) and the NDP, GCIS developed a five-year National Communication Strategy (NCS) in line with the Cabinet and public needs, which was endorsed by Cabinet. The NCS is developed to drive the communication priorities of the Medium Term Strategy Framework (MTSF) and is updated annually to ensure that it remains relevant and highlights communication priorities that may have arisen in the course of the year. NCS is also cascaded down to all national and provincial departments to ensure uniformity.

2.4 Expenditure Trends

The spending focus over the medium term will be on implementing the NCS, which was approved by Cabinet in June 2014. The strategy tasks GCIS with working with other departments to align their communication campaigns and programmes with the strategic priorities of government. GCIS is also responsible for taking the lead in communicating projects and programmes of strategic significance to government, which include providing advertising and media bulk buying expertise to other government departments over the medium term. GCIS will continue to conduct information campaigns, such as the state of the nation address; develop communications activities aligned with the government communication programme, coordinate the Imbizo government programme; and produce government publications such as the South Africa Yearbook, over the same period.

Almost 63.7 per cent of the department’s allocation over the medium term is spent in the Administration and Intergovernmental Coordination and Stakeholder Management programmes, most of which is on compensation of employees and goods and services, see Graph 1 and Graph 2 below.

2.4.1 Compensation of Employees

The anticipated increase in spending on compensation of employees over the medium term is to provide for annual salary adjustments as the department’s funded establishment is expected to remain at 514 posts, including 24 contract workers. Over the same period, expenditure in the Administration programme is expected to decrease due to the completion and occupation of the new head office building, for which funds were provided between 2010/11 and 2013/14.

The department had 12 vacant posts at the end of November 2013, mainly as a result of retirements, resignations and transfers to other government departments. Contrastingly, by 30 September 2012, the Department had 23 vacant posts; this represents a significant decrease in vacant posts based on this statistic and this should be commended. The recruitment process to fill these vacant posts has begun.

The department had 505 funded posts in 2012/13. In addition the department has annual plans to employ 25 interns over the medium term to support skills development. But only 23 interns participated in the internship programme in 2013/14. The ratio of support staff to line function staff was 1:3 therefore it is assumed that status quo remains in this regard.

Lastly, Consultants in this programme are mainly used for legal advice relating to labour relations, translations and transcriptions of programme products, qualification verifications and audit committees.

2.4.2 Goods and Services

Spending on goods and services over the medium term is expected to be primarily on operating leases, travel and subsistence and operating expenses related to the publication of monthly Vuk’uzenzele newspaper and the South African Yearbook. 20.4 million Vuk’uzenzele copies are set to be produced in 11 official languages and distributed monthly over the medium term. In addition, GCIS plans to issue 42 cluster reports on perceptions of government delivery and performance, conduct 8 250 community and stakeholder liaison visits and align 6 552 development communication projects with the government communication programme over the medium term. It is also projected that 3 846 media, photographic, video and graphic design products will be produced over this period.

2.4.3 Transfers

The transfer to the Media Development and Diversity Agency (MDDA) accounts for 5.1 per cent of the department’s total expenditure over the medium term. R68.2 million is allocated to the agency over this period to enable historically disadvantaged communities and individuals to gain access to the media.

2.4.4 Infrastructure Spending

Although construction process of the GCIS new building was completed at the end of November 2013, instead of the end of July 2013, as was anticipated; d elays were mainly caused by the need to install additional ICT infrastructure, such as cabling for voice over internet protocol and fire suppression devices. Although the building project began in 2011/12, legal and logistical delays resulted in funds of R20 million being rolled over to 2012/13. Additional allocations of R50 million towards the project were made in 2012/13, with R18.3 million being shifted in 2012/13 from the Office Accommodation sub-programme in the Administration programme to the project to fund the purchase of additional ICT infrastructure.

Total project expenditure at the end of November 2013 was approximately R101 million, used mainly for ICT. Project shortfalls were funded through the reprioritisation of funds across the four departmental programmes.

2.5 Programme Allocation and Expenditure Trends

2.5.1 Programme 1 – Administration – (R141.4 million)

The purpose of this programme is to provide overall support services to the Department. In 2014/15 financial year the programme has been allocated R141.3 million compared to R132.6 million allocated in the 2013/14 financial year. Overall, Programme 1 accounts for 34.2 per cent, which is the biggest share of all four programmes of the total allocation for the Department, see Graph 1 above .

The focus over the medium term will be on deploying robust Information Technology (IT) infrastructure and systems in the new head office, and addressing the office accommodation and corporate service needs of the department. The Corporate Services, Financial Administration and Office Accommodation sub-programmes therefore constitute the bulk of this programme’s allocation over the medium term. The funds are mainly allocated towards compensation of employees, operating leases and computer services.

Programme expenditure increased between 2010/11 and 2013/14, mainly due to a once-off allocation of R50 million in 2012/13, rollover funds of R20 million from 2011/12 to 2012/13 and R39.8 million between 2012/13 and 2013/14 in respect of the new head office. This resulted in a significant increase in spending on buildings and other infrastructure, which comprised of building, ICT and data line costs; as well as increased spending on assets valued at less than the capitalisation threshold for the purchase of office furniture.

With the new head office now complete, it is projected that programme expenditure will decrease at an average annual rate of 5 per cent over the medium term. The increase in expenditure on operating leases over the same period is due to the increased lease cost of the new building.

2.5.2 Programme 2 - Content Processing and Dissemination – (R99.9 million)

The purpose of this programme is to provide strategic leadership in government communication to ensure coherence, coordination, consistency, quality, impact and responsiveness of government communication.

During the previous three financial years (2011/12; 2012/13; 2013/14) and the current financial year this programme received the third largest allocation (as illustrated in Graph 1 above), which constitutes on average 25 per cent of the total budget. In the current financial year (2014/15), the programme has been allocated R99.9 million in comparison to R97.0 million allocated in 2013/14 financial year.

The spending focus over the medium term will be on providing strategic leadership and support in government communication through media monitoring, research, surveys and analysis in order to better understand the communication environment. These activities will be conducted in the Policy and Research sub-programme, while the Products and Platforms sub-programme will be responsible for enhancing government communication products to strengthen the voice of government.

The main achievements for this programme between 2010/11 and 2013/14 included the production of media content and the provision of support for the 2010 FIFA World Cup event, reports on government delivery and performance and media coverage, and reviews of the assessment of the media landscape reports.

The bimonthly Vuk’uzenzele magazine was also converted to a monthly newspaper, which resulted in efficiency gains on operating payments for the printing and distribution costs. These savings allowed the department to publish the Vuk’uzenzele newspaper more regularly. The Vuk’uzenzele newspaper comprises 54 per cent of the average annual expenditure of the Products and Platforms sub-programme.

Expenditure in the Policy and Research sub-programme over the medium term is set to increase in line with projected inflation escalation. The main cost drivers of these activities are agency and outsourced services and operating payments.

Consultants in this programme are mainly used for translating the Vuk’uzenzele newspaper into the 11 official languages and Braille, and assisting in the production of the South African Yearbook and other departmental publications and media products. Therefore spending on consultants is expected to increase over the medium term to provide additional capacity for translation services

Lastly, efficiency measures that will be implemented to ensure minimal negative impact on service delivery include limiting hotel accommodation, air travel and car-hire expenses and using the head office instead of private venues for meetings

2.5.3 Programme 3. – Intergovernmental Coordination and Stakeholder Management – (R121. 7 million)

The purpose of the programme is to implement development communication through mediated and unmediated communication and sound stakeholder relations and partnerships. Furthermore, this programme also transfers funds to the Media Development and Diversity Agency (MDDA).

The Programme which is the second biggest receives 30 per cent of the total Departmental budget and is allocated R121.7 million compared to the previous financial year allocation of R120.0 million. In nominal rand change, Programme 3’s allocation increased by R1.7 million or 1.4 per cent, however, the real rand change shows a decrease of R 5.4 million or a decline of 4.5 per cent in the programme allocation for the current financial year.

Out of the total amount of R121.7 million allocated to Programme 3, sub-programme Provincial and Local Liaison is allocated R73.5 million compared to the R69.9 million of the previous financial year. The allocation received in this current financial year equates to 60 per cent of the programme’s allocation. A transfer to Media Development and Diversity Agency in the current financial year amounts to R21.8 million compared to the previous financial year’s amount of R20.8 million. The MDDA allocation of R21.8 million equates to 17.9 per cent of Programme 3’s budget and 5.3 per cent of the total GCIS budget. The bulk of the allocation falls under current payments (goods and services and compensation of employees), a small portion is allocated to consultants while the remaining balance is allocated to public corporations and private enterprises as transfers and subsidies .

The spending focus over the medium term will be on ensuring that provincial and local government departments and entities are aligned with the government communication strategy in order to maintain and strengthen a well-functioning communication system that proactively informs and engages the public. This is primarily the task of the Provincial and Liaison sub-programme, which uses 60 per cent of the Programme’s allocation over the medium term. With these funds, the programme expects to conduct 2 750 community and stakeholder liaison visits and 1 860 community media and outreach platforms each year over the medium term, and make more effective use of community media platforms linked especially to the public participation programmes of the President, Deputy President and Members of the Executive. The aim is to increase the reach of citizens from all areas and living standards measure groups.

Expenditure increased between 2010/11 and 2013/14 mainly due to a once-off allocation of R10 million for advertising and communication in 2012/13 related to the preparations for the 2013 Africa Cup of Nations as well as advertising activities related to the country’s hosting of the African Nations Championships, which took place in the first quarter of 2014.

Lastly, Expenditure in the Media Development and Diversity Agency sub-programme is expected to increase over the medium term to cover the agency’s operations going forward

2.5.4 Programme 4. Communication Service Agency – (R50.1 million)

The purpose of this programme is to provide media bulk buying services and media production services to national government.

Of R50.1 million allocated to this programme, sub-programme Marketing, Advertising and Media Buying in the current financial year was allocated R28.6 million compared to last financial year’s R27.3 million. The current allocation of R28.6 million represents 57.1 per cent.

Of the R50.1 million allocated to Programme 4, sub-programme Media Production received R21.5 million compared to R19.8 million which was allocated in the previous financial year. The allocation received by the sub-programme in this financial year equates to a depreciating percentage of 41.9 per cent.

The spending focus over the medium term will be on consolidating the media production, media bulk buying and advertising agency functions for government departments. This includes: buying media for campaigns; producing radio advertisements and dramas, video programmes and live broadcasts on community radio stations; and providing photographic coverage and cost effective and efficient electronic media products and services. To support these objectives, funds are mainly allocated to compensation of employees, advertising, travel and subsistence and operating payments.

The expected increase in spending on operating payments in 2016/17 is mainly due to an increase in costs related to the distribution of Vuk’uzenzele newspaper and the South African Yearbook. Expenditure in this programme is expected to increase marginally over the medium term mainly to cater for allocations for improved conditions of service and other inflation related adjustments.

The number of personnel in this programme is expected to increase from 50 in 2012/13 to 55 by 2016/17, mainly due to the filling of vacant posts. There were 5 vacant posts at the end of November 2013 as a result of resignations and transfers to other government departments. These posts are in the process of being filled. The allocation will increase by R1.2 million over the medium term.

In sum, the Department aims to implement efficiency measures that will ensure that there is minimal negative impact on service delivery including limiting hotel accommodation, air travel and car-hire expenses and using the head office instead of private venues for meetings from all its Programmes.

3. General Findings / Observations

The Committee noted with concern that: (i) GCIS had an acting Chief Executive Officer (CEO) for almost two years; (ii) the position of Deputy Chief Executive Communication Service Agency remains unfunded for almost three financial years, consecutively; and (iii) the GCIS had non-quantifiable targets .

The Committee recommended that the Department must make available to the Committee the National Communication Strategy (NCS).

4. Entities Reporting to the Department

Media Development and Diversity Agency – R57 695 000

MDDA budget consists of the following: transfers from GCIS R21 815 000, Broadcast Media R24 502 000, Print Media R4 000 000, and other income R7 378 000

The MDDA was set up in terms of the MDDA Act, 2002 (Act 14 of 2002) to enable historically disadvantaged communities and individuals to gain access to the media.

The mandate of MDDA is to: (i) create an enabling environment for media development and diversity which reflects the needs and aspirations of all South Africans; (ii) redress the exclusion and marginalisation of disadvantaged communities and people from access to the media and the media industry; and (iii) promote media development and diversity by providing support primarily to community and small commercial media projects. The overall objective of MDDA is to ensure that all citizens can access information in a language of their choice, and to transform media access, ownership and control patterns in South Africa.

The MDDA’s strategic focus over the medium term will be:

· maintaining and enhancing ownership of small commercial and community media, controlling and encouraging access to information and content production by communities;

· enhancing ownership and control by independent media entrepreneurs;

· developing and strengthening a vibrant, innovative, people-centred and diversified media;

· cultivating an environment and capabilities that deliver the agency’s value products and services;

· enhancing the agency’s brand as a leader in media development and diversity,

· enhancing the agency’s governance and accountability standards; and

· strengthening, growing and protecting the funding base of the agency in order to deliver on its mandate.

The MDDA has the following programmes:

4.1 Programme 1

4.1.1 Sub-programme A1: Community Media – R26.9 million

The purpose of this programme is to provide technical, non-financial and financial support to diverse media platforms owned and controlled by communities. Its strategic objective is the ownership, control and access to information and content production by communities.

4.1.2 Sub-programme A2: Small Commercial Media – R7.5 million

The purpose of this programme is to provide technical, non-financial and financial support to diverse media platforms owned and controlled by independent publishers. Its strategic objective is the enhancement of ownership and control by independent media entrepreneurs.

4.1.3 Sub-programme A3: Research, Training and Development – R5.1 million

The purpose of this programme is to create and enhance a body of knowledge regarding the media landscape and capacity for a diverse media industry. Its strategic objective is a vibrant, innovative and people-centred media.

4.1.4 Sub-programme A4: Monitoring and Evaluation – R1.3 million

The purpose of this programme is to assess grant agreement compliance and impact of MDDA funded projects. Its strategic objective is to strengthen and promote a vibrant, innovative and people-centred and diversified media.

4.2 Programme B: Legal and Contract Monitoring – R61 000

The purpose of this programme is to provide legal support and advice, and contract management service to the MDDA. Its strategic objective is creating a legally sound contract management and litigation free agency.

4.3 Programme C: Human Resources and Corporate Services – R2.5 million

The purpose of this programme is to develop MDDA human capital so as to deliver products and services that meets the expectations of stakeholders. Its strategic objective is the creation of an environment and capabilities that deliver MDDA value products and services.

4.4 Programme D: Risk Management and Internal Audit – R1.7 million

The purpose of the programme is to limit the negative impact of organizational and environmental risks by enhancing governance and accountability standards of the MDDA.

4.5 Programme E

4.5.1 Sub-programme E1: Finance and Supply Chain Management – R7.1 million

The purpose of this programme is to provide MDDA with overall financial and supply chain management, and guide management in complying with legislative requirements, budget planning, financial management and administration. The strategic objective is to strengthen, grow and protect the MDDA funding base.

4.5.2 Sub-programme E2: Information Technology

The purpose of the programme is to strengthen the MDDA’s Information Management System. Its strategic objective is to standardize the basic IT infrastructure and to ensure that it complies with industry standards.

4.6 Programme F: Communications CEO’s Office, Branding and Stakeholder Management – R5.3 million

The purpose of the programme is to enhance the MDDA brand as a leader in media development and diversity. Its strategic objective is to create a well-known, valued and reputable brand.

4.7 Expenditure Trends of the MDDA

The MDDA is funded mainly by transfers from GCIS and grants from broadcast and print media. Areas of funding are divided into four broad categories; Community Media - 60 per cent; Small Commercial Media - 25 per cent; Research Projects - 5 per cent and other is allocated 10 per cent. In addition, the agency also earns non-tax revenue from interest generated on short term investments. Between 2010/11 and 2012/13, transfers received increased due to a service level agreement with both print and broadcast media stakeholders. The total annual average revenue generated is anticipated to remain stable over the medium term.

The agency’s spending focus over the medium term will shift from taking on new projects to ensuring the sustainability of existing projects by maintaining their level of funding. Community media and small commercial media grants are the largest item of expenditure over the medium term as the agency continues to carry out its core function of developing the sector. Between 2010/11 and 2013/14, spending on transfers and subsidies for approved grand applicants averaged 3.9 per cent of expenditure, with an average annual growth of 18.5 per cent. The increase was a result of retained surplus and increased contributions from the print and broadcast media. Spending increased significantly over this period in order to meet the agency’s grant making objective of promoting and strengthening the small commercial print and community media sectors.

Accordingly, the number of funded community media projects increased from 20 in 2012/13 to 24 in 2013/14. Spending on transfers and subsidies to small commercial and community media grant recipients is expected to decrease by an average of 2.6 per cent over the medium term, and covers an average of 73 per cent of the total expenditure. As the medium term focus is on existing projects, the number of small commercial media sector and research and training projects is expected to decrease slightly in 2014/15 and 2015/16. This is the consequence of smaller contributions from the print sector. The number of projects supported in any given year depends on the quality and quantity of the applications received, and has averaged 431 from 2010/11 to 2013/14.

Between 2010/11 and 2013/14, spending on compensation of employees grew at an average annual rate of 15.5 per cent as a result of the expansion of the organizational structure. The number of personnel is expected to increase from 21 in 2012/13 to 26 in 2016/17, mainly due to the expected filling of 5 critical vacant posts by the end of the 2013/14. In addition, expenditure on compensation of employees over the medium term is expected to grow at an average annual rate of 7.4 per cent, driven mainly by improvements in conditions of service.

The agency aims to retain its skilled workforce by offering and maintaining competitive salaries over the medium term. Consultants provide internal audit and risk management services, as the agency does not have the personnel to perform these tasks. Spending on consultants over the medium term therefore is expected to be R682 000.

4.8 MDDA Challenges

4.8.1 Internal challenges

MDDA identified the following internal challenges:

  • The level of organizational skills and capacity both in terms of numbers, knowledge and skills given the broad spectrum of projects across the country;
  • The more the beneficiary numbers increase, the less capacity of MDDA to manage, monitor and evaluate, and report adequately;
  • The inadequacy of the MDDA financial resources which limit the Agency’s ability to recruit and retain appropriate and the best staff the market can offer;
  • Five Board members’ term of office expire in December 2014;
  • Positioning the Agency in the context of new technologies and innovation; and

· Using cutting edge technologies to enhance efficiencies.

4.8.2 External Challenges

MDDA identified the following external challenges:

  • Limited funding, especially in the area of print media where funders have signed the same R1.2 million support for the first three years and R1 million for the last two years. Print and Digital Media of South Africa (PDMSA) have indicated their non-commitment to renewing their contributions until a policy review on media development and diversity is completed. The decision makes MDDA budget for 2014/19 R4 million less;
  • The market environment for print media development is constrained, because of difficulty regarding the value chain (printing and distribution), costs of running the business and funding support;

· Loss of skills from small commercial and community media to the more lucrative commercial / private media and public broadcasting sector;

· National Treasury needs to facilitate the transfer of the allocations of support for capacity building of community radio programme production in Vote 27 (Communications) to Vote 9 (GCIS) for MDDA;

  • Limited exposure of small commercial and community media to marketing and advertising revenues;
  • Sustainability challenges and mobility skills; and

· Limited number of mentors and people business administration skills.

5. Observations and Recommendations

5.1 Observations

The Committee noted:

(i) that National Treasury needs to facilitate the transfer of the budget allocation for the purpose of capacity building of community radio programme production from Budget Vote 27 to Budget Vote 9;

(ii) that not all national departments comply with the Committee’s 2012/13 recommendations to use community media when advertising;

(iii) the slow pace towards legislative and policy review which needed to be conducted in order to address sectoral challenges which relate to sustainability and tariffs;

(iv) the findings of report by the Print and Digital Media of South Africa (PDMSA) on the lack of Transformation of Print and Digital media;

(v) the 2013/14 Third Quarter Expenditure of GCIS was 74 per cent which is an improvement from the same period in the previous financial year which at 57 per cent;

(vi) that the 2014/15 Strategic Plan of GCIS did not contain the CommTask Report’s recommendation of introducing a qualification for government communicators;

(vii) that GCIS’ 2014/15 Strategic Plan does not cater for the two major issues in the sector; (a) transformation of the Advertising Industry and (b) the transformation of the print media(newspapers, print and distribution value-chain);

(viii) the work-in-progress by the MDDA to ensure accountability of boards in the community media sector;

(ix) the growth of community media sector and the disjuncture between potential community projects requiring government’s assistance and the actual government transfers to the MDDA; and

(x) that GCIS and MDDA Accounting Officer positions were all vacant and occupied by personnel in acting capacities which brings about leadership instability in the institutions.

5.2 Recommendations

The Committee recommends that the Minister:

(i) must expedite legislation and policy review given the challenges facing community media particularly in terms of Transformation;

(ii) conducts an audit of compliance of national departments about the Committee recommendations that national government departments and state owned entities should include advertising through community media;

(iii) provides a breakdown of funding for existing and new community media projects of MDDA;

(iv) ensures that GCIS and MDDA expedite Transformation of the Print Media and take note of the report of PMDSA;

(v) ensures that GCIS and MDDA work with Advertising Standards of South Africa (ASA), and the Department of Trade and Industry (DTI) to expedite Transformation of the Advertising Industry;

(vi) ensures that GCIS and MDDA work with provincial and municipal governments to directly place their advertisements with community media;

(vii) ensures that GCIS and MDDA work with stakeholders like the South African Audience Research Foundation (SAARF) and the Audit Bureau of Circulation (ABC) to ensure accuracy of audience and readership figures in order to attract private and public advertisement;

(viii) ensures that MDDA works with community media as well the South African Music Rights Organisation (SAMRO) to find a solution which will result in the payment of royalties to artists by community broadcasters even at discounted rates should such a mechanism exist;

(ix) ensures that GCIS and MDDA fill all funded vacancies, especially those at Senior Management Service (SMS) level;

(x) encourage an MDDA funding model that includes the promotion and prioritization of community media that uses indigenous languages; and

(xi) ensures that measures are put in place to capacitate community media to diversify its advertising.

The Committees are satisfied with the GCIS and MDDA Strategic Plans 2014 – 2019 and their APPs for 2014–2015, and accordingly support its implementation.

The Democratic Alliance and the Economic Freedom Fighters reserved their position on the report.

Report to be considered.

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