Picture: DANIEL BORN
Picture: DANIEL BORN

The Cape Chamber of Commerce and Industry backs a proposal for an ombudsman to help small businesses deal with late payments by the state and the private sector.

Chamber president Janine Myburgh said the establishment of such an ombud could save many jobs and make it easier to do business.

The proposal is made in a private member’s bill — the Small Enterprises Ombud Service Bill — which has been introduced into Parliament by DA spokesman on small business development Toby Chance.

Nonpayment for services has forced many small and medium businesses to close down as they lack the cash flow to continue operating.

Answers to parliamentary questions by the DA indicated that government departments had racked up R7.7bn in unpaid invoices by the end of 2017.

"There are also complaints that big companies postpone payments to small firms for as long as possible, knowing that small firms cannot afford to hire lawyers or go to court," Myburgh said.

She noted that small businesses generated nearly 50% of SA’s gross domestic product and nearly 60% of the country’s jobs, and said SA could not afford to see this vital sector abused in this way.

"Running a small business is tough at the best of times but if the invoices are not paid it becomes impossible. Maintaining a steady cash flow is essential for survival. Staff have to be paid every month and if the invoices are not paid, jobs may have to be cut," Myburgh said.

She said the main problem was that small businesses were powerless in their dealings with the government and big corporations.

"An ombudsman to take up the cases and mediate would be a big help. It would give small firms some real muscle and just knowing that there is an ombudsman to help if necessary would be very encouraging."