Just energy transition funding for SMMEs and Cooperatives; Government failure to comply with 30-day payment regulation

Small Business Development

09 November 2022
Chairperson: Ms V Siwela (ANC)
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Meeting Summary

Video

In a virtual meeting, the Portfolio Committee was briefed by the Public Service Commission (PSC) on government's failure to comply with the 30-day payment regulation, and by the Trade Industrial Policy Strategies (TIPS) organisation on the impact of climate change on small, medium and micro enterprises (SMMEs).

The Committee was told that non-compliance with the Section 38(1)(f) requirement in the Public Finance Management Act (PFMA) for government entities to settle invoices within 30 days, was endemic across national and provincial departments, despite the work of the PSC over the past decade or so. The findings of the PSC were that most of the departments provided their submissions late. The PSC said this showed that even in respect of a simple requirement, just to issue monthly reports around the payments at a national level, most of the departments were late. It singled out the Department of Agriculture, Land Reform and Rural Development for submitting late for April and May, and not submitting the June 2022 report at all.

The Committee was dismayed to learn that 138 332 invoices to the value of R4.7 billion had been paid after 30 days by national departments in the 2021/22 financial year. It was also told that 78 921 invoices to the value of R4.4 billion had been paid after 30 days in the previous financial year. As for the provincial departments, 263 359 invoices to the value of R28.9 billion were paid after 30 days in the 2021/22 financial year, and 227 190 invoices to the value of R25.8 billion were paid after 30 days in the previous financial year.

The Committee felt strongly that delayed payments had a negative impact on the growth of small businesses and the country's economy generally, and resolved to take the matter up with the leader of government business to request an intervention regarding the leading national and provincial departments that were failing to comply with the prescribed 30-day payment period.

Members were briefed on South Africa’s commitment to net-zero carbon emissions, especially from a policy perspective. South Africa's nationally determined contribution (NDC) has set ambitious targets to reach net zero emissions by 2050. The NDC proposed a significant reduction in greenhouse gas (GHG) emission target ranges up to 2030, with the 2025 target range allowing time to fully implement the national mitigation system, including those elements contained in the Climate Change Bill. The 2030 target range was consistent with South Africa’s fair share, and an ambitious improvement on its current NDC target. The upper range of the proposed 2030 target represented a 28% reduction in GHG emissions from the 2015 NDC targets.

The Members welcomed the presentation, and expressed commitment to ensuring that small businesses were able to take advantage of the opportunities in this area, especially on the renewable energy side. Government had to do more to bring small and medium enterprises (SMEs) to the forefront of the whole renewable energy concept. However, they expressed concern about the "red tape," which they said was a stumbling block for SMEs and put them at an unfair disadvantage by keeping them out of the renewable energy business.

Meeting report

Payment of invoices within 30 days

Adv Dinkie Dube, Director-General (DG), Public Service Commission (PSC), said the presentation resulted from the annual monitoring and evaluation work that her office did in Section 196 of the Constitution. The PSC would share with the Committee its findings on the payment of invoices by government departments within the prescribed 30 days. It also would provide comparative analysis over the years so that it could understand how the national and provincial departments were faring in complying with this legislative prescript.

Mr Cameron Jacobs, Chief Director, PSC, said these were the key issues:

  • Non-compliance with Section 38 (1) (f) of the Public Finance Management Act (PFMA) was endemic across national and provincial departments, despite the work of the PSC over the past decade or so to ensure compliance with the Section.
  • The Section was a peremptory requirement and “accounting officers must settle all contractual obligations and pay all money owing within the prescribed or agreed period.” The prescribed period in line with Treasury Regulation 8.2.3 was 30 days from receipt of an invoice.
  • Further, Instruction Note No. 34, dated 30 November 2011, required departments to submit monthly information to the relevant treasuries by the seventh day of each month for national departments, and the 15th day for provinces.

National departments

The findings of the PSC were that most of the national departments provided their submissions late. This showed that even in respect of a simple requirement just to issue monthly reports around the payments at a national level, most of the departments were late, with the Department of Agriculture, Land Reform and Rural Development (DALRRD) submitting late for April and May, and not submitting their June 2022 report at all. Non-compliance with Instruction Note 34 compromised transparency in the provision of information.

The increase in the number of invoices paid after 30 days in the last quarter of 2021/22 and the first quarter of 2022/23 indicated that the departments were not implementing controls to ensure that suppliers were paid on time. The value of these invoices was high, with a huge potential of being the key driver for crippling small businesses.

The number of unpaid invoices older than 30 days was 959, with a value of R4 108 388 as of 30 June 2022. The Department of Water and Sanitation (DWS)and the Department of Tourism were the biggest contributors to this total.

Provincial departments

Although all provinces submitted reports for quarter 1 of 2022/23, some did not submit the reports on time, as per Instruction Note No. 34.

While the total number of invoices that did not comply with Treasury Regulation 8.2.3 decreased from 130 637 in quarter 4 to 99 719 in quarter 1, the number was still at an unacceptable level.

The rand value of invoices not paid within 30 days remained unacceptably high.

Reasons for late and non-payment of invoices

Systematic challenges

Lack of an information technology (IT) system, such as BAS, LOGIS, etc, to track invoices, lack of financial delegation, misfiled/misplaced or unrecorded invoices, unresolved invoice discrepancies, incomplete supporting documents.

Poor financial management

Poor budgeting by government departments, lack of alignment between budget and procurement plans, as well as an inability to adhere to procurement plans.

Contractual disagreements

Poor contract drafting, different interpretations of the contract clauses by government and service providers, and terminations of contracts without informing the affected party were some of the challenges experienced. Invoices raised out of this context were not legitimate, as the dispute had to be resolved first before payment was made.

Lack of documented processes (standard operating procedures)

Many departments lacked documented processes, resulting in delays and errors in executing elementary processes. Payment of invoices should not be held up due to unforeseen blockages.

Bad culture in the public sector

Some officials did not seem to understand the notion of “serving the public”, thinking that the public was beholden to them. This bad culture also found expression in high levels of non-compliance, as reflected in audit reports.

Lack of capacity

Some departments lacked capacity in critical areas of financial management, including vacancies, resulting in backlogs in the payment of suppliers. This was also reflected in failures by some departments to create simple Excel spreadsheets that could be used to enhance their daily activities and automate some routine rudimentary processes.

Impact of non-payment of invoices on small business

  • Delayed payment had a profound impact on a small business. Salaries were not paid on time, raw materials could not be acquired, existing projects suffered, and new ones could not be taken on.
  • The longer it took to pay suppliers, the longer it dipped into their profit margins.
  • Late and non-payment of suppliers was a huge deterrent for entrepreneurs who aspired to establish their own businesses in future, thus perpetually discouraging businesses from flourishing and job creation.

[Please see attachment for the complete PSC presentation]  

Discussion

The Chairperson said the presentation was powerful and would assist the Committee in doing its oversight work of ensuring that accountability prevailed. Failure to do so would cripple small businesses. It was the responsibility of the Committee to deliberate on the presentation and make recommendations so that small businesses did not collapse. The Department could not be given the budget to embark on its programmes and fail to deliver.

Mr H Kruger (DA) said the presentation just left a bitter taste in his mouth, because he had suspected the 30-day payment issue, but never thought it was such a huge problem, especially looking at the rand value. The PSC had spoken only about the national and provincial governments, but had not touched on municipalities. He would like a similar presentation on how much money municipalities owed small businesses. The private sector was as guilty as government, because big businesses bullied the small businesses. When they complain to big businesses about invoices, they get cut off from the system and left in the dark. That was pure bullying, so there must be a solution for both municipalities and private companies. What was also very concerning was that there were no consequences, despite the billions of rands that were outstanding and small businesses that were dying.

He also spoke about the transversal agreements that had been spoken about a lot in the Committee and the Fifth Parliament, saying there should be a transversal or memorandum of agreement between the Department and small business developers. If the DSBD managed these agreements, what was happening would not have happened. This implied that these agreements were not in place, and if they were, there were not managed by the Department.

He commented that small businesses were dying because the public servants were not doing their job, yet they were going to strike because they demanded a ten per cent wage increase. Perhaps it was time for government to start paying the public servants late so that they could feel what it was like to have a cash flow problem, suffer like small businesses and lose all their savings. Most of the small businesses' start-up capital came from their life savings and pension money, which they lost because public servants did not do their work. Government needed to start paying them late, and it was ridiculous that they were going to strike tomorrow for a wage increase, but the small businesses were dying. Small businesses were the flagship of the government, which politicians believed would save South Africa, but the public servants were failing the country. This was disgusting and some of these public servants should serve a prison term for this.

Mr J De Villiers (DA) agreed with Mr Kruger that what the presentation had revealed was shocking and disgusting because it was very hard out there following the pandemic, high unemployment and inflation in the country. As such, to hear that those small businesses did not get paid when they won contracts with the government was unforgivable. Something that everyone was missing was the root cause of what was happening here, and indeed there should be better accountability. He had never heard of what Mr Kruger suggested -- that if officials did not pay suppliers, they should not get paid their salaries, but it could motivate them to do so.

The most important thing was to have accountability and to create a culture of professionalism within government institutions. However, that would not be possible as long as cadre deployment persists. If people were not employed according to their abilities to hold positions, how could one hold them accountable if they failed to perform? If people were appointed to positions because they were carrying ANC cards, not because of their experience and skill set, and had been told that they were getting the positions because of their loyalty to the party, how could one hold someone like that accountable or expect them to be professional? They would just do whatever they wanted, because they were not there based on their skills. So the root cause of all this was the ANC cadre deployment, and if this continues, South Africa would never have professional civil servants. There was a need to create professional civil servants who were not political party affiliated, but skilled in the various fields and sectors of government. The Committee could continue to deliberate on this, but as long as the country was run by a government that did not reward people for their skills but rewarded them for loyalty to the ANC, the problems of underperforming civil servants would persist.

Ms B Mathulelwa (EFF) said the presentation revealed that government needed to be capacitated to do minor things on its own, rather than rely on service providers, because this put service providers in a tight situation where they had to depend on some individuals who did not care about how small businesses had to be developed. She agreed with the previous speakers that there was no accountability, and that there should be consequences if public servants did as they pleased and undermined small businesses like that. She shared Mr Kruger's sentiment that if they did not pay service providers, they should also lose their salaries. Hitting on the profits of the big businesses would make them change their attitude. The state must be capacitated to handle its own business, rather than giving it to people who do not care.

The Chairperson said Ms Mathulelwa had come up with good suggestions, and she was happy with the suggestion of capacitation of government, accountability, consequence management, and Mr Kruger’s suggestion of focusing on the municipalities and private sector.

Mr D Mthenjane (EFF) agreed with the previous speakers that the public servants' treatment of small businesses was disgusting, and that what the Members thought they knew was not the case. The presentation was an eye-opener, because what the Committee knew was nothing compared to this. Of course, Members were aware of the complaints from small businesses, but did not think it was this serious, and this was disgusting. There needed to be accountability, and government must do something about this issue. For instance, at the South African Revenue Service (SARS), there were consequences if one did not pay one's returns on time.

He said the presentation was an eye-opener for the Committee -- small businesses were suffering indeed, and no wonder some of them were dying. Thus, there must be consequence management, and the Committee, as part of the government, must suggest a Bill that gives the Department powers to protect small businesses by imposing sanctions on officials who did not pay service providers. This would improve the situation for small businesses, because they have employees who must get paid monthly like everyone else. This Committee must be given powers to summon the underperforming individuals and bring them to book. He said just as SARS forced one to pay one's returns with interest if one was not complying, maybe that should be implemented in this case as well, so that companies that were not paid on time should add interest on what they were owed, even from the government. Unfortunately, the government of the people was committing such acts against small businesses. As such, all non-paying elements, including the government and the private sector, must be forced to pay small businesses with interest.

Mr F Jacobs (ANC) shared the sentiments of his colleagues and condemned non-compliance in government departments. He suggested that the Commission issue a statement expressing the Members’ unhappiness and disgust about non-compliance, and its intention to name the top ten national, provincial, metros and districts in all the areas. There was a portfolio called the NT procurement team in the national government responsible for government procurement. The Committee needed to summon all those guilty parties, including the political principal, the DG and the chief financial officer (CFO) of all these departments. The DSBD should be able to identify all the culprits and list them down. If it was provinces, the Premiers must be called to account.

He said all political parties were tired of this non-compliance, and the sentiment he was picking up was that they wanted all the guilty accounting officers, finance officers and executives to come and explain why they were not paying the service providers, and what they were going to do about it. He asked Members not to play party politics on the matter, particularly Mr De Villiers’ cadre deployment remarks. He said the DA was also guilty because they wanted people of colour to vote for them, yet the party treated them as incompetent to hold key positions in the Western Cape. One would find a coloured woman training a white man so that he could take a senior position in that institution, and some of them with no Matric, so the DA must not point fingers because they were equally guilty.

The Committee must focus on cultivating a culture of professionalism in the public sector. There were many hard-working individuals in the public sector whose fight for a decent living wage should be respected and supported. The people that should be held to account were the management in that sector, because if the CFO was paid a lot of money, whether in the municipality, provincial government or national government, they needed to come and explain why they were not paying small businesses, and there needed to be consequences. Such individuals need to be charged or demoted from their positions, because the days of claiming that there was no capacity were over. If one was earning a lot of money, one should be competent enough to execute one's duties. He requested that the Committee empower the Chairperson to issue a strong statement expressing the Members’ unhappiness on this matter and demand interventions, even if it meant having the Minister in the Presidency to come and explain to the Committee. There must be improvements, and every quarter the numbers must change, and the Auditor-General (AG) needs to share the progress. Of course, cadre deployment was very wrong, but Members should stop making this a political issue. All parties employed many people, but they must have records of their skills and experience.

The Chairperson said she would allow the presenters to respond to the comments of the Members, but that was not their responsibility because they had only shared what they observed, so it was up to the Committee to take charge. She agreed with all the Members that the Committee would issue a statement condemning non-compliance because the PFMA was clear on how the public sector should conduct itself. The municipalities and private sector must also be involved in this regard because failure to do that would kill small businesses.

Responses

Ms Dube said it was important to take note of some of the key reforms and interventions that were taking place in the public service, including the professionalisation framework that had been approved and would be implemented. The Commission expected it would go a long way in ensuring that appointments were made on merit, as Members had indicated. The PSC would play a central role in ensuring that an implementation plan was drawn up on the professionalisation framework and the monitoring of its implementation.

Another intervention introduced to strengthen the oversight role of the PSC was to review an amendment to the current Commissions Act. The extent of the mandate could go only as far as the national and provincial departments, so it was envisaged that the review of the current law would extend its mandate to municipalities and state-owned entities (SOEs). However, as a constitutional entity, the Commission was part of the Forum of Institutions Supporting Democracy, so it leveraged the powers and functions of the other constitutional entities -- for example, the Public Protector. In the last meeting with the Public Protector and the last meeting with the Forum of Institutions Supporting Democracy, the Public Protector was also looking at this matter of the non-payment of invoices within 30 days. The PSC wanted to start utilising forums such as the one for the Director Generals (DGs) as accounting officers, and planned to go and make this presentation to sensitise them on how departments were performing to ensure that they as accounting officers executed their mandate.

The Chairperson said this was empowering the Committee, since it was going to issue a statement. The Portfolio Committee appreciated the renewal and amendment of the Act, which would assist it a lot.

Mr Kruger referred to the transversal agreement between the DSBD and the rest of the government departments, saying that soon the DG of the Department must come and explain to the Committee how these transversal agreements were signed and managed. This was because the Committee in the Fifth Parliament had proposed and accepted that the DSBD had to go and sign transversal agreements with all departments. He proposed that the DG should come as soon as possible and explain the number of transversal agreements signed, and how the 30-day payment system was managed via the transversal agreements.

The Chairperson thanked Mr Kruger -- as the only Member in the Committee in the Fifth Parliament -- for empowering the rest of the Members. She also thanked the Commission and the rest of the Members for speaking with one voice, and committed to issuing a statement on the matter. She hoped that the officials had captured all the recommendations made in the meeting. The Committee would follow up since the PSC promised to have a session to ensure that the executive authorities were accountable and carrying out their mandates properly. The Committee was not being harsh in proposing that guilty parties lose their salaries. Unfortunately, it did not have the powers to implement that policy, but it did have the power to summon them to come and account and ensure that consequences were taken seriously.

Climate change impact on SMMEs

Ms Elize Hattingh, Researcher, Trade and Industrial Policy Strategies (TIPS), gave a presentation on the opportunities and barriers for small, medium and micro enterprises (SMMEs) resulting from climate change.

SA`s commitment to net-zero carbon emissions

She said South Africa`s nationally determined contribution (NDC) sets ambitious targets to reach net zero emissions by 2050 through a low-emission development strategy. The NDC proposed a significant reduction in greenhouse gas (GHG) emission target ranges up to 2030, with the 2025 target range allowing time to fully implement the national mitigation system, including those elements contained in the Climate Change Bill. It would also allow space for implementing Integrated Resource Plan (IRP) 2019 and other key policies and measures, as well as the national recovery from COVID-19.

The 2030 target range (398 - 440 Mt CO2-eq ) was consistent with South Africa’s fair share, and an ambitious improvement on its current NDC target. The upper range of the proposed 2030 target range represented a 28% reduction in GHG emissions from the 2015 NDC targets.

Investing in climate-resilient development

IF South Africa could transition from existing coal value chains located in and beyond the Mpumalanga Highveld, towards low carbon consumption and production patterns, it would demonstrably shift by 2050 toward low emission and climate resilient development pathways consistent with the Paris Agreement and the Sustainable Development Goals (SDGs). It would also achieve a Just Energy Transition, because the catalytic investment would deliver change across four climate impact areas.

A policy response was required for South Africa's Just Energy Transition, which would encourage catalytic climate finance to:

  • Allow South Africa to pursue an ambitious climate scenario, particularly the phasing out of coal, in line with the global 1.5 - 2.0 degree target.
  • Create and preserve quality jobs for South Africans.
  • Build the adaptive capacity of coal-affected communities.
  • Achieve net zero emissions across investors’ asset portfolios by 2050 or sooner.
  • Include active SMME participation in climate adaptation and mitigation strategies.

Ms Hattingh said climate change was the greatest challenge of our times, creating conflict and threatening food security, water security, ecosystems, health, infrastructure, national economies and the livelihoods and wellbeing of people and communities. It resulted in increasing demands and stresses on the governance structures and institutions needed to address impacts, particularly in Africa

Barriers to local green enterprises

Financial barriers to financing local green enterprises (LGEs) included inappropriate collateral requirements, lack of credit guarantees, prohibitive interest rates, and cumbersome application procedures. There was also an information and capacity gap, with financial institutions lacking information on SMMEs regarding their financial health, environment, social factors and governance. On the other hand, SMMEs lacked knowledge about financial opportunities, credit guarantee schemes and support programmes. They also lacked business, finance and environmental skills. Regulatory mismatches included the lack of supportive regulations, such as the legal status of green SMMEs; the presence of burdensome regulations (registration, licences, tax); and the negative effects of existing regulations (subsidies for large firms).

Ms Hattingh said there were internal and external barriers to financing Local Green Enterprises. The internal barriers were:

  • Demands for green and social goods
  • Support required to become green
  • Programmes for financial literacy
  • Collateral requirements
  • Access to financial services

The external barriers were:

  • Financial ecosystem challenges
  • Banking regulations
  • The regulatory landscape
  • The stakeholder landscapes
  • The impact of COVID-19

Ms Hattingh said the solution involved bridging the trust gap between SMMEs and financial institutions. There was a need to ensure SMMEs could pledge movable assets as collateral; improve and green public credit guarantee schemes; bridge the information and capacity gaps; credit information sharing mechanisms must be more granular and greener; the information chain on the environment, social factors and governance had to be robust but simplified; and the establishment of an SMME agency as a one-stop-shop, with liaison offices.

Bridging the financing ecosystem gap would require unleashing the potential of development finance institutions(DFIs), and improving consumer protection.

Climate change opportunities

A wide range of both mitigation and adaptation actions was available at all levels, ranging from continental to local. These were needed to combat the urgent adverse effects of climate change, further support climate-resilient, inclusive and equitable socioeconomic development, and increase resilience to future impacts. A unique opportunity existed to introduce cleaner, greener, fairer and more sustainable initiatives, and to apply ambitious, whole value chain approaches.

[Please see attachment for a complete presentation]  

Discussion

Mr Jacobs took over as chairperson, as the Chairperson was experiencing network problems.

Mr Kruger said the Committee needed to ensure that small businesses were entering the renewable energy space. Government must do better to bring small and medium enterprises (SMEs) to the forefront of the whole renewable energy concept. However, red tape was the stumbling block, keeping them out of the renewable energy business. He agreed with the presentation, but would like to reiterate the red tape challenge, and its effect on the ease of doing business on all aspects of small business, especially now with the talk of green energy and earth warming. If one did not have strategies in place to reform the red tape in government, small businesses would continue to be left out of such opportunities and would pick up only the crumbs. The job of the Portfolio Committee was not to feed the small businesses the crumbs, but to get the small businesses to the level of the big players, especially in the renewable energy space.

The Acting Chairperson thanked Ms Hattingh for the informative presentation, and said the Committee endorsed this Just Transition. The President had said at the conference in Egypt that South Africa needed trillions of rands to achieve it. Government did not want energy produced by only big companies or multinationals, but as a broad principle on energy equity and energy ownership, small businesses, the voiceless and the marginalised across the country should not be dependent consumers, but should be part of the production processes. The Committee appreciated that Ms Hattingh had been available to guide the framework, and hopefully, the DSBD officials were present and could make a follow up.

He also suggested that there should be a fund, because access to finance was crucial. The private sector, which was big business, also needed to come to the party. The Portfolio Committee would also like to invite the Presidential Just Transition Council and the Portfolio Committee on Environmental Affairs to see how this could be implemented. There were many opportunities out there to correct many of the inequities in the ownership of the economy, so being green was the right thing to do.

There was a misconception that being green was only for white liberals, but it was a concept they needed to embrace and not just talk about. The Just Transition was important if they wanted a future for their children.

Ms Mathulelwa asked if there was an estimated number of small businesses capable of forming a part of the renewable energy sector, specifically in KwaZulu-Natal (KZN) and the Eastern Cape. There should be a change in classifying small businesses for producing energy. There must be a special intervention to ensure that small businesses were involved in this space because even if they were not participating formally, some in the rural areas were participating informally and were probably unknown. She suggested that they were brought forward and developed because they were doing it without knowing they formed part of what had been presented here.   

Response

Ms Hattingh agreed with the reflections and suggestions of Members, particularly on capacitating SMEs not only in the Northern Cape or Western Cape, but all the newcomers -- the new industries that were investing in renewable energy. It was important to monitor their progress and support them by reporting their environmental and socioeconomic impact, so that when there was more data, one would understand where one could help, and could recommend proactive programmes. The renewable energy incubators in the special economic zone (SEZ) for green technologies in Atlantis, Western Cape were now online. There was increased participation across the country, just to help with basic back-office support.

It was also important for people to understand that there were a lot of entrepreneurs, such as one or two-man shows with small businesses that had good access to markets, but could not find the R200 000 - R300 000 working capital at a low interest rate to install the equipment. This was a big problem and a huge concern, so some finance mechanisms needed to be implemented to help with working capital because there was a market, a willing buyer, and a capable entrepreneur to install, but the financing was not there. Therefore, the capacity building spoken about in the Eastern Cape and the provision of low interest loans for working capital were very important.

The other reflection was the consensus among Members to continue this conversation later, which she was looking forward to because the presentation had been a lot to absorb, especially in half an hour. She could report back some of their research and tools they wanted to develop to help the financiers to better understand the market, especially the demand for finance and also for the SMEs to understand where the finance was sitting, to be able to better interact with each other.

She had taken note of the need for mapping the green industries and the opportunities that were taking place to make it more viable for entrepreneurs to participate in the market. She had also taken note of the notion of not wanting to leave everything to big businesses, but to ensure that in procurement guidelines, small businesses were included in renewable energy production on both small and big scales.

The Acting Chairperson asked the DSBD officials to make sure that Ms Hattingh came to update the Committee regularly, and to be put into contact with the Sustainable Energy Fund for Africa (SEFA) and other development funding agencies, so that there could be access to finance for small businesses. Government must make the technology available for small businesses. For example, community solar power that could be generated locally was a massive thing that could empower people not to be dependent on multinationals. Next time, the Committee must develop concrete ideas and partnerships, and Ms Hattingh should be linked with other small business departments.

Telkom petition

The Acting Chairperson said Members had to consider the report that had to be submitted to the Speaker on the Telkom petition. Many recommendations have been made, one of which was that this Committee must deal with the Ombudsman Bill. This presentation had been tabled to all the Members at last week’s meeting. It was linked to the Committee’s commitment to have the legislation in, so he requested the input of all the political parties on the matter, with a focus on the recommendations.

Ms Evelyn Smith, Director: Sudane Projects and Services, Independent Field Technicians (IFT) Companies, clarified that an item on page four of the report indicated four active companies. She said the correct number was three companies, because her company was not active because she had a dispute with Telkom -- it had stopped her from working and she did not have the financial muscle or the resources to continue. She had not received any contract from Telkom nor given any consent to continue with the contract.

The Acting Chairperson said if Ms Smith looked at the Committee's recommendation, she would appreciate that it had limitations. Its submissions on what it planned to do indicated that Members felt that Telkom was unfair, and that she still reserved her rights. The Committee hoped they could find a win-win situation in this matter. He expressed the Committee's apology, indicating that it was unfortunate that it was not the case, and acknowledged her input and committed to record it accordingly in the Committee's report.

Mr G Hendricks (Al Jama-ah) wanted to raise issues around amending the legislation, but was not sure if it was the appropriate time because he had missed most of the proceedings due to problems with the network. The Committee had identified that there needed to be amendments to one or more pieces of the legislation, or even a new bill to address the issues that had come before the Committee today, including the issue of the ombudsman. Al Jama-ah proposed that they replace the permit with a registration certificate to enable roadside workers to trade and help the poorest of the poor become involved in the economic activities of the country. Regardless of how it was done, the Committee should look at all the issues that had come before it and its predecessors, and come up with a piece of legislation.

He welcomed the report, because it helped the Committee to move in that direction, but he wanted to put it on record that his party was engaged with its legal drafting team to set up private Members' votes, and it had set up three votes successfully. Al Jama-ah was now looking at what it could do to amend legislation, which should be the work of this Committee, but it would drag its feet as it had been doing for the past ten years. He therefore wanted to put it on record that his party had consented to submit a private Member’s vote, and it was at an advanced stage of bringing an amendment to whatever Act, so the certificates replaced the permit. This would open the floodgates so that the poorest of the poor would start getting involved in the economic activities of the country.

Ms Mathulelwa said she was feeling bad about this matter, because it was the fourth time the Committee discussed it without the presence of the Minister. The process had taken a very long time, yet this was a serious matter that should have been resolved long ago, especially considering that the Committee was dealing with an incident that happened under the same Minister presiding over this Department. Since she was the Minister of Communications then, it should be easy for her to resolve this matter, because she should be aware of some details. This matter should be taken into consideration speedily.

Mr Kruger said that having been part of the Committee since the beginning, he wanted to put it on record that Members had done many things, especially in the Fifth Parliament. He proposed that the report should be considered to be in order, but Members must not leave one stone unturned to try to resolve the issue. However, there was a strategy of small businesses talking about the transversal agreements in memorandums of understanding (MOUs), and there was a lot of bullying in the communication sector. Surely, the Department must use those agreements to solve those types of problems.

As a sponsor of the petition, he would like to thank the Committee for its hard work, and was proud of the fact that a Committee such as this had chosen to take the side of small businesses instead of the big businesses. He proposed the report be adopted with Ms Smith’s amendment. He commented that this was not the end of it -- the Committee would continue to help Ms Smith get her business back on its feet again and make it 100% fair for her to do business accordingly.

The Acting Chairperson asked Members to second the proposal,and Members seconded it.

He thanked the Committee and all the officials for the presentations, and assured Ms Smith that the "David and Goliath" fight was not over yet. It would be tabled and debated, and the Committee would continue to fight for her and let big organisations such as Telkom know this was unacceptable, even though it did not have the mandate to force them to do this. The Members were very unhappy about the situation and called upon the ombudsman to intervene, and the Committee would ensure that this Bill was implemented.

He agreed with Ms Mathulelwa that the Minster had to come and account for the situation and explain why Telkom failed to find a win-win situation. This indicated a lack of care and unwillingness to assist small businesses, but the Committee would remain the champion of small businesses, micro enterprises and the informal sector. The economy of the country was highly concentrated, so the Committee needed to ensure that it was de-concentrated and fair economic ownership.

Mr Sibusiso Gumede, Committee Content Advisor, commented that the level of frustration in the sector was hitting the roof. This area was identified long ago as requiring a legislative response. The Private Member’s’ Bill had been vetoed because the Department had been given a platform to indicate what it was doing on its part to assist the small business sector in dealing with issues such as corporate bullying. A presentation had been made by the Department, where promises were made that within three months, the Committee would be dealing with the ombudsman, but for some reason, it never happened. That was five years ago, and now in 2022, the Members are still dealing with the same issue.

The Committee needed an urgent engagement with the DSBD, with the Minister and the Deputy Minister in attendance, to put in black and white when it would get this Bill, because if the Committee relied on the officials, they would come in and say one the thing, but in the next financial year, this undertaking would not be in the plan of the Department. This issue therefore needed to be escalated to the executive authority of the DSBD, because it could not be correct that, as legislators, the Committee had not yet dealt with a single bill, although the issues affecting SMMEs kept increasing. When the Members adopted this Bill in the Fifth Parliament, it was to deal with some of the issues, such as the non-payment of service providers on time. The sooner the Committee moved, the better.

Mr Kruger said this was not the last debate on the petition, because Members would still have a chance to debate it in Parliament. He agreed with the comments of the content advisor, but the Committee had already decided that it would push for the ombudsman, so there was no need to talk to the Minister and Deputy Minister. The Committee must talk about the Bill and ensure it is tabled in Parliament so that SMMEs could be helped, because waiting for the Department would lead to a lengthy delay. The Committee must get the Ombuds Bill tabled to save SMMEs.

The Acting Chairperson said Members agreed that the letter of intent must be submitted to the Speaker on behalf of the Chairperson. The letter of intent for this Committee to do the Portfolio Bill must be tabled as well.

The Committee adopted its meeting minutes.

The meeting was adjourned.

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