Issued by: Department of Communications
24 February 2000
A 100 percent reduction in the subsidy to the SA Post Office and a 50% cut in the subsidy to the national public broadcaster, SABC has resulted in the Department of Communications reducing its overall budget by 40 percent.
SA POST OFFICE
The subsidy paid by Government to the SA Post Office will end in March, one year ahead of the three-year target laid out in the Postal White Paper. This is as a result of efficiency gains and performance improvements experienced by the company for the last two financial years. The SA Post Office reported surpluses of R212 million in the 1997/98 financial year, and R138 million in the current financial year. This reflects a significant turnaround in the fortunes of the SA Post Office when, just a few years ago, its grant from government reached a high of R700 million.
Following the restructuring of the SA Post Office and the employment of a Strategic Management Partner (New Zealand Post International and Royal Mail International) in October last year, a turn-around strategy has paid dividends.
The final grant from Government was paid in this financial year (1999/2000) amounting to R283 million. The new three-year business plan will be accompanied by the issuing of a 25-year operating licence that will give the SA Post Office an exclusivity to operate certain postal services. The licence will be issued in the coming financial year by the newly-established Postal Regulator.
Last year, the SABC received a total of R228,5 million from Government. However this year, the SABC's own revenue sources are projected to increase such that it was possible for government to reduce its overall subsidy by R103 million, making the total government subsidy almost half for this financial year - R125 million. The current restructuring of the SABC aims to release latent value trapped in the national broadcaster through the re-organisation of the corporate structure into Public and Commercial entities. The Public Broadcasting Service will focus on delivering a public service. The Commercial Service aims to attract investment in order to draw skills, technology and resources to enable SABC to be competitive.
DEPARTMENT OF COMMUNICATIONS
The portion of the overall budget allocated to the direct activities of the Department has increased marginally due to the establishment of new sections, including Technology Research, Infrastructure Development, Emergency Communications and Spectrum Management.
Further details on the Department's budget will be outlined by Communications Minister Dr Ivy Matsepe-Casaburri when she presents its budget to Parliament on March 16.