State lashed for owing SMEs over R7bn
Johannesburg - The DA has lashed out at the government for failing to pay over R7billion to small businesses within the stipulated 30-day period.
On Sunday the DA said the state was facing collapse, with its inability to pay service providers as well as managing appointments, taking disciplinary action, combating wasteful expenditure and preventing corruption.
This was after Small Business Development Minister Khumbudzo Ntshavheni revealed the massive amount owed to small businesses in a written response to a Parliamentary question by DA MP Leon Schreiber.
Schreiber was asking about the value of the government department’s backlog for paying service providers within 30 days in compliance with the provisions of the Public Finance Management Act.
Ntshavheni said the National Treasury’s 2018/19 annual report showed that invoices older than 30 days and not paid by national departments at the end of the last financial year, amounted to a shocking R634million.
A staggering R6.5bn was not paid by provincial departments within the stipulated time during the same period, she admitted.
Schreiber said the government’s responses to a series of parliamentary questions over the past few weeks revealed “terminal decay in the ANC’s ability to manage the public sector”.
“The ANC’s mismanagement of the public service is directly undermining any hope of our economy recovering from the recession. Combined, national and provincial government departments currently owe South African businesses - the engine of economic growth - over R7.1bn in unpaid invoices older than 30 days,” he said.
The Department of Water and Sanitation was leading the national government debt of R634m, with R492m owed to small businesses, followed by the Agriculture Department of R99m and the SAPS of R24m.
Provincial governments owe businesses R6.5bn, with Gauteng and the Eastern Cape leading the pack with R2.6bn and R2.1bn owed to businesses, respectively.
Schreiber said while the ANC government could not pay service providers timeously, it seemed to have no problem paying billions to public servants illegally doing business with the state
“Treasury’s 2018 public procurement review found that 2704 state employees conducted business with national and provincial departments between April 1, 2017 and January 31, 2018,” he said, adding that R8.1bn of public funds was paid to public servants who illegally conducted business with the state.
He noted that Public Service and Administration Minister Seno Mchunu had indicated in a written response to his parliamentary question that not a single public service employee was held accountable or fired for doing business with the state.
This happened against the backdrop of R26m spent on the salaries of public servants who were placed on “precautionary suspension”, as of June this year.
“The DA reiterates our call for a comprehensive public spending review. We will also continue fighting for fundamental reforms that create a lean, efficient and capable state that creates opportunities for South Africans to prosper,” he said.