Friday, 11 May 2018

Media statement - DA proposes establishment of an SME Ombudsman to save jobs

Date: 11 May 2018
Release: Immediate
 
Today, DA Leader, Mmusi Maimane MP, DA Shadow Minister of Small Business Development, Toby Chance MP and the DA Gauteng Shadow MEC for Provincial Treasury and e-Government, Adrianna Randall MPL, presented a Private Members Bill(PMB), to be presented in Parliament, that will see the establishment of a Small and Medium Enterprises (SMEs) Ombud service to mediate disputes and resolve late payment issues between SMEs and government in order to save jobs.
In a country with almost 10 million unemployed people we should be focusing on SME's as the drivers of job creation and we need to find ways to support them to do so. However, national government is notorious for late and non-payments to SME's who do business with the state. Government departments have as much as R7 billion in outstanding invoices to date. This threatens SMEs survival and their ability to create jobs.
To address this, the DA's proposed SME Ombudsman will specifically be tasked with resolving disputes between an SME and clients such as government departments, non-government entities such as corporates, who are the biggest offenders in the private sector. The dispute resolution function of the Ombudsman will focus on contractual agreements, late or non-payment of amounts owed and payable within the 30 day window period.
The DA's proposal for an SME Ombudsman, is informed by a party discussion documentwhich showed that national government remained the worst offender on late and non-payment to SMEs which conduct business with the state. This bad culture has seen government departments sitting on more than R7 billion in unpaid invoices to SMEs, threatening their survival and ability to create jobs.
While SME's generate half of South Africa gross domestic Product (GDP) and nearly 60% of employment in the country, the sector has seen many businesses close shop or retrench workers due to the failure by government to pay for services rendered within the 30-day window period.
In addition to the establishment of an SME Ombudsman to deal with the problem of late payments, the DA discussion document also proposes the following solutions from the private sector:
• business assistance services to help SMEs improve internal administrative capacity including the production of appropriate invoices as well as the management and delivery of said invoices to clients.
• optimisation of cash flow through supply chain finance that allows businesses to lengthen their payment terms to their suppliers while providing the option for their large and SME suppliers to get paid early.
• voluntary commitments such as the Prompt Payment Code, which the National Small Business Chamber (NSBC) has championed, strive to improve payments to SME suppliers within 30 days.
In presenting the proposal, the DA was joined by the CEO of the National Small Business Chamber (NSBC), Mike Anderson. The NSBC, a non-profit membership organisation for small business that is currently running the 'Prompt Payment Code' campaign, expressed its full support for the DA's proposal for an SME Ombudsman.
The explanatory memo for our PMB was published in the Government Gazette 41623 on the 10 May 2018 (see here) and we call for all South Africans to consider the contents of the notice and to submit their comments and input.
The success of President Cyril Ramaphosa's investment drive will only be determined by his commitment to a sustainable SME sector that is well supported through growth enablers such as an SME Ombudsman.
 
Media Enquiries
 
 
 
Toby Chance MP
DA Shadow Minister of Small Business Development
083 251 5613
 
Enocent Nemuramba
National Press Officer
071 095 1806

26 comments:

  1. It is very sad how innocent people get retrenched or put on short time due to no money coming in from the source that owns the money, how is this country suppose to succeed, and grow. i think getting there own SME Ombudsman is brilliant.

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  2. Unfortunately instability and unfair practices have forced many South Africans, like myself, to find another Country to call home. Evacuation has robbed South Africa of qualified, hardworking people who contributed to the Countries GDP by providing employment and an overall higher standard of living for all South African families. Look around, it’s evident and confirmed by South African business leaders in the world today who are no longer South Africans and their contributions are benefiting the Countries they now call home.

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  3. I think its a great idea to have an Ombudsman for SME's. Someone needs to stand up and take control of the corporate bulling! How is the average businessman supposed to get anywhere with the corporate companies when they have millions of rands to throw at a problem and drag court cases out for years
    The SME's need help before it gets to such a desperate situation that business have to close and innocent people lose their jobs over something they have no control over what so ever! This is the very reason why people leave SA! Doing business in SA is not easy!!

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  5. Amore du Preez17 May 2018 at 02:26

    Having an Ombudsman for SME's is a brilliant plan. With our countries massive unemployment rate already, we as employees in SA just cannot afford to lose even more jobs due to corporate bullying from overseas companies.
    Our economy cannot afford it! We are talking about millions of Rands leaving the country, to enrich overseas companies and line their pockets. This money is needed so much more in our own country!
    Schooling systems are standing up to bullying, putting systems into place to help fight it. Look at SME's as the children being bullied by the corporate companies - we need someone to stand up for them!
    Please, an Ombudsman is needed!

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  6. We need an Ombudsman! We are an SME and situations like these are crippling to any business! We employ 78 staff, everybody will lose their jobs, just adding to the unemployment statistics of our country. We need someone to stand up for us against corporate companies!

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  7. Yes, a very good idea. We need an Ombudsman to resolve disputes between SME's and companies.Legal fees are exorbitant and the average person cannot afford this.

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  8. Small business need protection from situations like this and it saddens me to know that they can play Russian Roulette with peoples lives

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  9. We need the Ombudsman. Legal fees are a ripoff!!!!

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  10. Corporate bullying is unexpecable. Small businesses needs to be protected against this.

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  11. I Fully Agree and government needs to take action to protect small businesses,

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  12. The Ombudsman needs to take these corporate bullies to task and put am end to this!

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  13. Apriciate the drive behind this, as these corporate bullies aren’t only ruining my friends busines. The stress on their family has been tremendous, I could see my friend age in a matter of months. Take Vodacom to task!!!!!!!

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  14. Yes, we need an Ombudsman to represent the SME Sector.
    This is a prerequisite for any economy, and not a variable.

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  15. YES YES YES ! .. The appointment of an Ombudsman as a neutral party needs to be established ASAP. I have retired from one of these huge corporates and the amount of "bullying" and "favouring" taking place is at times criminal and unjust! .. A company with a strong case should be heard, reimbrsed in full, recompensated and reappointed ASAP. Only a neutral such as an Ombudsman can decide on the fate of the SME, as exhorbitant legal fees prevent the small business from pursuing their fair and unjust treatment. PLEASE PLEASE CAN THE POWERS THAT BE CONSIDER THIS ASAP. I think I could write a book (to my detriment) on the 20 yrs of working for a big corporate. It is time for exposure... Please.

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  16. Excellent idea to appoint Ombudsman. Smaller businesses need protection from Corporate bullying. It would be the right thing to do

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  17. 1. Yes, a very good idea to appoint an Ombudsman to resolve disputes between SME’s and companies. Legal fees are exorbitant and the average person cannot afford this!
    2. Our country has massive unemployment statistics. We cannot afford that South Africans lose their jobs to overseas corporate company bullying

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  18. Our country has massive unemployment statistics. We cannot afford that South Africans lose their jobs to overseas corporate company bullying. We definitely need a Ombudsman to assist S.A.

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  19. I fully agree!

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  20. An ombudsman/person would certainly go a long way to helping small businesses stay alive and with that create more jobs.
    The larger corporations and government owned industries that squeeze the living daylight out of sme's for lower prices and longer payments are only constructively destroying the hub of employment within South Africa.
    Every small industry that closes means the ones that survive will have less competition, this will in turn lead to prices which the corporations will have to pay if they want those goods and with very few alternative sources.
    They are only shooting themselves in the foot and these actions along with BEE continually pushing up the costs of goods will causes the demise of small industries. This countries employment outlook is extremely bleak.

    No amount of foreign investment is ever going to resurrect the loss of tax paying, labor reliant small businesses that large corporations need to obtain goods and services from.
    Big corporations through greed, cost cutting exercises and BEE policies ensuring small enterprises are kept from competing have been totally responsible for the closing of small businesses and the loss of hundreds of thousands of jobs.

    Keep squeezing, you Naive corporate business executives and see where your cost saving budget attempts will eventually lead you. Back to the board rooms for some major explaining i think!!!!

    But then again why worry it wont affect you will it? You will get millions as a hand shake and ply your brilliant business attitude overseas.

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  21. Annemarie Smalberger20 May 2018 at 02:01

    Yes, please implement this Ombut service!!! Great Idea.

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  22. Wonderful idea totally agree

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  23. This could certainly assist SME's still waiting for payment! Good idea.

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  24. South Africa has huge unemployment statistics. We cannot afford that South Africans lose their jobs to overseas corporate companies. We need The Ombudsman to fight for us. Legal fees are unaffordable for the average person.

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  25. Having an Ombudsman for SME's is a brilliant plan. With our countries massive unemployment rate already, we as employees in SA just cannot afford to lose even more jobs due to corporate bullying from overseas companies. 
    Our economy cannot afford it! We are talking about millions of Rands leaving the country, to enrich overseas companies and line their pockets. This money is needed so much more in our own country!
    Schooling systems are standing up to bullying, putting systems into place to help fight it. Look at SME's as the children being bullied by the corporate companies - we need someone to stand up for them!
    Please, an Ombudsman is needed!

    ReplyDelete