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Sun Oct 23 01:29:32 CAT 2016

Time to crack down on officials who cripple small firms

The Times Editorial | 07 January, 2016 00:06

Lost amid the wall-to-wall coverage of the tumultuous student protests, the showboating in parliament, the SAA fiasco and the turmoil triggered by President Jacob Zuma's ham-fisted attempt to reshape the Treasury, was a news item that received scant attention.

The Times's sister newspaper, Business Day, reported in November that, three years after implementing a 30-day payment policy, government departments were still failing to pay service providers on time. In some instances departments were also refusing to pay interest on their debt to suppliers.

According to the Public Service Commission, provincial departments had failed to pay almost 22 000 invoices, totalling more than R1-billion, while national departments owed service providers about R70-million.

These figures probably reflect only a fraction of what has become an endemic problem.

For example, they do not include the hundreds of municipalities, many of them cash-strapped and poorly managed, that are short-changing their creditors.

Even well-established companies can go to the wall as a result of consistent nonpayment for services they have provided in good faith.

Some established firms that are owed money can afford to go to court to force departments to pay up, but thousands of small businesses don't have this option and many go under as a result.

It is nothing short of criminal in a country with a faltering economy and which boasts of an entire ministry dedicated to the promotion of small businesses, that, month after month, thousands of service providers continue to be fobbed off with promises of payment by officials who are guaranteed a salary irrespective of whether they do their job properly.

The Public Service Commission has promised to start working with the Treasury to enforce the 30-day payment policy - and not before time.

A zero-tolerance approach needs to be taken with recalcitrant officials and departments.


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