Kempton Park - Planning, Monitoring and Evaluation Minister Jeff Radebe says failure by government officials to pay service providers on time has a direct impact on their livelihoods and their families.
The Minister on Tuesday held an imbizo in Kempton Park to talk to small businesses about government’s progress in fast tracking payments and abiding with the 30 days payment policy.
A business owner at the imbizo told the Minister how he had to sell his house and cars to sustain his business due to late payments.
“In terms of the Public Finance Management Act, Municipal Finance Management and Treasury Regulations, it is a very serious offence not to pay suppliers within the stipulated timeframe of 30 days.
“Forty-seven percent of South Africa’s workforce is employed by the small business sector, with about 7.3 million people. The sector contributes 42% to the country’s Gross Domestic Product (GDP). Small business is big business,” said Minister Radebe, who is also the chairperson of the National Planning Commission.
Another delegate at the imbizo said she had not been paid for about two years. She said when she follows up on her case, she is told that the people who had to authorise her payment are no longer working at the department.
The Minister said government understands the frustrations and plight of small business owners, as they are important stakeholders in the fight against the triple challenge of unemployment, poverty and inequality.
“We will continue to put measures in place to ensure a more favourable environment for your sector to thrive,” said Minister Radebe.
Government last year announced the establishment of a special unit in the Department of Planning, Monitoring and Evaluation (DPME) to tackle the problem of non-payment of suppliers within the required 30 days.
Minister Radebe said since the establishment of the unit, it has attended to and resolved hundreds of queries on non-payment and facilitated payment to suppliers to the tune of R168 million.
“While the 30-day period is a general guide on the limits, it is clear that it is desirable that payment must in fact be done within a few days of the receipt of invoices to enable optimal running of businesses,” said the Minister.
Unpaid invoices
The Minister noted an increase in the number of late payment cases.
He said in June 2016, the number of legitimate invoices paid after 30 days were 17 668, worth R340 million. This is higher than in June 2015, where 13 803 invoices worth R224 million were unpaid after 30 days.
However, the Minister also noted positive instances in which some departments were able to pay suppliers within four days.
“We have seen a consistent improvement in the setting up of system to enable the adherence to the 30-day payment. The pace of improvement is, however, still not adequate at this moment,” he said.
He said there are numerous cases where government institutions have duly paid the invoices but the main contractor refuses to pay the sub-contractor money due to them.
Interventions
The Minister said the special unit and its partners are rolling out a targeted support programme to the identified struggling departments.
The special unit visits these departments to address the challenges that lead to non-payment or late payment of suppliers.
A walk-in centre has been established at National Treasury offices to attend to suppliers’ queries.
Suppliers were also advised to familiarise themselves with policies and government’s procurement and payment processes.
Service providers asked for the imbizo to be rolled out to other provinces, as it would help resolve similar issues nationally.
Minister Radebe’s Deputy, Buti Manamela said government is the largest consumer of products offered by service providers at affordable prices. He said when service providers are not paid in time, they suffer from cash flow problems as they are unable to pay creditors.
He said it is government’s responsibility to support young entrepreneurs to fight youth unemployment. - SAnews.gov.za
