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The DA has asked Auditor-General Terence Nombembe to investigate the millions of rand spent by various state-owned enterprises on advertisements placed in The New Age newspaper, despite there being no circulation data for the paper.
Advertisers use circulation data to ensure they will reach a wide-enough audience to justify the cost.
In the absence of such figures, the DA believes the spending by government departments and state-owned enterprises could constitute fruitless and wasteful expenditure, and has asked Nombembe to investigate this.
The move follows a back-and forth public spat between the opposition party and the newspaper after DA leader Helen Zille withdrew from a New Age business breakfast when it emerged that the events were sponsored to the tune of millions by state-owned enterprises.
She said this amounted to the channelling of public money to the newspaper, owned by the Gupta family, who were well-known funders and supporters of the ANC and President Jacob Zuma.
“It is not acceptable or defensible for public money to be used to bankroll a privately owned newspaper and, indirectly, the coffers of the ANC,” Zille said earlier this week.
Now it has emerged SOEs are also spending millions on advertising in The New Age.
In a written reply to a parliamentary question from DA MP Donald Lee, Public Enterprises Minister Malusi Gigaba revealed that Eskom, Transnet and SAA had spent a total of R14.73 million on advertisements in the newspaper over the last three years.
DA spokesman Mmusi Maimane said on Wednesday that The New Age was completely dependent on public money to stay afloat, saying that, according to a rough calculation, it had received R5.2m in advertising revenue from government entities in just two weeks last year.
The DA measured the amount of advertising space bought and calculated the cost based on The New Age’s 2012 advertising rate card.
Maimane noted that the actual advertising revenue could differ dramatically if special rates had been negotiated.
He would ask Nombembe to investigate in terms of section 15 of the Public Audit Act and request all documentation pertaining to each government department’s, and their sub-entities’, decisions to purchase advertising in The New Age.
Nombembe should also investigate all direct and indirect contributions to The New Age relating to the “New Age Business Breakfasts”, including the sponsorships received from various SOEs and the SABC’s decision to “gift the airtime to The New Age for free”.
According to Gigaba’s written reply, power utility Eskom spent a total of R4.81m on ads placed in the newspaper between December 2010 and October last year, SAA spent R1.28m between January and November last year, and rail freight firm Transnet spent R8.64m between October 2011 and early-November last year.
Eskom said that, although it had been unable to analyse the reach of the newspaper when it was launched, it had since been “audited” by the All Media Products Survey, which showed that it reached Eskom’s intended market and had, at the key time, 39 000 readers.
However, the AMPS data are not audited figures of actual sales.