SABC bailout means government has offered SOEs R 243 billion in financial support

The R 1.4 billion bailout of the SABC now brings the total amount of government financial assistance offered to State Owned Enterprises (SOEs) over the past four years to R 243 billion - enough money to build at least four large coal-fired power stations. In other words, the ANC government continues to pour enormous volumes of money into a very large black hole - enough funds to significantly address many of the serious socioeconomic problems we face in South Africa today.

The R1.4 billion designated to SABC is far in excess of anything the state broadcaster has received in recent years. It received unconditional transfers of R180-million, R235-million, R239-million and R180-million in 2005, 2006, 2007 and 2008 respectively. It must be noted that HCI Media, which is mainly comprised of e.tv, managed to produce R331-million in operating profits in the six months up until September this year. Television stations should not need bailing out; on the contrary, they can be very profitable if run properly. The problem is that the ANC government has treated the SABC like a playground for cadres, instead of holding its administrators and managers to account.

This bailout brings the total amount financial assistance for the state broadcaster to R2.24-billion over four years, and the total financial assistance for state-owned entities now amounts cumulatively to R243.25-billion in that time period:

• Eskom: R 188.67-billion
• Denel: R8.82-billion
• Land Bank: R 6.7-billion
• SAA: R5.2-billion
• Pebble Bed Modular Reactor: R4.46-billion
• SABC: R2.23-billion
• SA Post Office: R1.54-billion
• Sentech: R953-million
• Total (including other SOEs): R243.25-billion

(These figures are based on a parliamentary reply from the National Treasury).

It should be noted that this list includes a figure of R8.8-billion associated with state financial assistance of Denel. Yesterday, Denel issued a statement in which they claimed that this was a "factual inaccuracy" (see here). If it is a factual inaccuracy, then it is the Treasury's, not ours. The list pertains to total financial assistance from the government to state owned entities. In a question to the National Treasury, we asked what such assistance had been granted; their reply covers a number of types of financial support, including guarantees, loans, transfers and once-off indemnities. In the reply the Finance Ministry refers to these, cumulatively, as "total financial support".

For the record, that reply lists the Treasury's total financial support for Denel as follows:

• R1.515-billion in guarantees (2005/06)
• R2-billion in unconditional transfers (2005/06)
• R1.6-billion unconditional indemnity (2006/07)
• R567-million in unconditional transfers (2006/07)
• R933-million in unconditional transfers (2007/08)
• R221-million in Denel/SAAB claims (2007/08)
• R1.72-billion in guarantees (2008/09)
• R260-million in Denel/SAAB claims (2008/09)

In total, this amounts to R8.816-billion of financial support, over four years.

Zwelakhe Ntshepe from Denel claims that "[t]he state's investment in the organisation's turnaround strategy has [only] amounted to R3 500 million to date". We can only advise that he speaks to the Treasury at the earliest possible opportunity.

Statement issued by Tim Harris, MP, Democratic Alliance select committee on finance, November 26 2009

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