Thousands of businesses in the
Eastern Cape are squeezed financially by delayed payments from the provincial
government. Small businesses are the most effective form of job creation and
the province must pull out all stops to ensure their growth and survival. They
cannot be the cash cow that is being milked while government delays payments
from one financial year to the next to hide financial mismanagement.
According to a question for
written reply by DA MPL Bobby Stevenson to the MEC for Finance, Phumulo Masualle, a total of
12 731 businesses were owed an amount of R1, 455,232 billion by provincial
departments in excess of 30 days as at the end of the financial year (31 March
2012). There were still 40 525 invoices due for payment to these 12 731
suppliers. The worst performing department was Health which owed
suppliers a total of R865, 715 million followed by Education, R247
million, and Roads and Public Works, R218 million.
This amounts to an average of
R114 270 per supplier. Delayed payments of these amounts can be crippling for a
small business and drive them under.
Of the 12 731 businesses that
were owed money, 6 716 were owed by Education and 3 983 were owed by
Health. Some departments performed very well and had less than 50
creditors outstanding. (Legislature 6, Economic Development 15, Transport
41).
It is quite clear that the
Health Department is deliberately delaying payment so as to deal with its
financial crisis. This merely compounds the problem as last year’s
financial shortages are simply rolled over into the next year.
The DA welcomes the detailed
response from the Provincial Treasury. It shows they have the information
at hand to monitor the situation. However, they urgently need to
intervene with departments to ensure that they don’t use small business to
finance their debt from one year to the next. A Democratic Alliance-led
provincial government would ensure the right climate is created for businesses
to grow and create jobs.
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