Budget speech delivered in Parliament today: DA has solutions to grow the SME sector in South Africa

Chairperson, Minister, Deputy Minister, Honourable Members, distinguished guests in the gallery, good afternoon.

The Portfolio Committee’s report on the Department of Small Business Development’s budget and annual performance plan is a cutting indictment of four wasted years.

Just last week the Committee received an anonymous letter from a whistle-blower within the Department, extracts of which read as follows: “even now as I speak there is no structure with an approval signature of the Minister of DPSA, the Department has incurred a huge over-expenditure on goods and services, there is a desperate lack of capacity in CIS, Co-operative Unit and BBSDP, with only five officials expected to serve nine provinces as well as DG having announced that CIS, EIP, BBSDP and IMEDP will be migrated to agencies without proper, open and honest discussions with staff on this matter.”

For our purposes the meaning of the acronyms is immaterial. Suffice it to say they refer to core Department programmes which it now wants to hive off to its agencies without proper discussion or consideration. As well as chaotic and dictatorial management by the DG.

Minister Zulu, as the Executive Authority, must take responsibility for this disaster in the making.

She sat silently in our committee meeting last week while her DG apparently misled us by claiming the DPSA had approved the organisational structure in the department’s APP. According to the DPSA only the start-up structure has been approved. Will there be consequences for misleading Parliament in this way? The DA demands accountability from the executive.

Two years after advertising for applicants to sit on the National Small Business Advisory Council, the council still has not been constituted. This is in breach of the Small Business Act. Minister Zulu admitted to the committee last week that she had been tardy on this.

Minister, this is not good enough and we urge you appoint the council board without delay.

The same tardiness is on display in establishing the Cooperatives Development Agency, the Cooperatives Tribunal, the Cooperatives Advisory Council and the Cooperatives Development Fund, all of which are mandated in the Cooperatives Amendment Act 2013.

As a result of their non-existence, cooperatives still languish unassisted, unfinanced and on the margins of the economy when they should be a central pillar of community development, particularly in rural areas.

Critical vacancies in the Department at deputy director general level are hampering service delivery and programme rollout and the Department remains in limbo without an approved structure.

The 2018/19 budget includes only R22 million for Programme 2, Sector Policy and Research which includes the function of monitoring and evaluation. The Department has admitted it has no skills in this critical function so is unable to provide data on which programmes are delivering results and which are not.

The Policy branch is supposed to be working on the amended Small Business Act, and here again we find the Department late in matching promises with results. We have been told every year since 2016 that a new Act is in the works. Now the Department has promised it will be tabled in Cabinet in the third quarter of this financial year.

Chairperson, the DA will not stand by waiting as the Department fails time after time to deliver on its mandate while small businesses continue to suffer. Like Puss in Boots, Minister Zulu is using trickery and spin to pretend all is well in her Department when in fact it is in a shambles. Her boots are stuck in concrete and no amount of reassuring words will convince us she is on top of her game.

Two areas in particular where small businesses suffer are not having recourse in disputes with customers, and cash flow crunches when these customers fail to pay on time.

To address these problems, I wish to draw attention to a suite of proposals and solutions which in combination will provide small business owners with relief from the constant bullying they suffer at the hands of uncaring government and big business. Yes, big business is a culprit but disputes occur under the radar so go unreported and small businesses suffer in silence or quietly disappear.

I intend introducing the Small Enterprises Ombud Service Private Member’s Bill, establishing an ombudsman to resolve disputes quickly, cheaply and efficiently. The Portfolio Committee has attempted to perform the function of an ombud over the past few years as we are inundated by complaints from business owners who have nowhere else to turn to. Notice of this bill was gazetted on 10^th May giving 30 days for comments and suggestions before the bill is drafted.

Last Friday DA Leader Mmusi Maimane and I visited the premises of Denel Vehicle Systems in Benoni to protest the late payment of invoices worth R1,6 million to a small business. The non-payment led to the closure of this business with the loss of 38 jobs. This is one of countless examples where late or non-payment of invoices has a crippling effect on companies’ cash flow.

We endorse the Prompt Payment Code set up by the National Small Business Chamber. Signatories to the Code of good practice commit to paying customers within 30 days.

We also outline how Supply Chain Finance allows an SME supplier to secure its money earlier by piggybacking on the creditworthiness of a buyer. Tomorrow I am visiting a major retailer to discuss how supply chain finance can unlock billions of rands of working capital across supply chains in all sectors of the economy, and so help small businesses grow and create more jobs.

These three interventions are positive steps towards addressing challenges small businesses have across the country. In the spirit of cooperation President Ramaphosa called for in his SONA as well as in responses to oral questions last week, I plead for the cross-party support the small business community deserves rather than a partisan, narrow-minded response which politicians are notorious for.

Chairperson, we need to put country before Party. The DA has presented some constructive measures to grow our economy and create jobs. I look forward to accompanying President Ramaphosa, DA Leader Mmusi Maimane and Minister Zulu on visits to some small business incubators where we can find out first-hand how these measures can be implemented without delay and bring total change to the small business sector.

Thank you.