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Business|Consulting|Consulting Engineers|Design|Engineering|Health|Logistics|Power|Safety|Service|Services|System|Underground
business|consulting-company|consulting-engineers|design|engineering|health|logistics|power|safety|service|services|system|underground

Both barrels: govt and small business

31st May 2019

By: Terry Mackenzie-hoy

     

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When Engineering News publishing editor Martin Creamer gave me the go-ahead to write this column, he set down certain topics to be avoided. Politics was one. However, I am allowed to criticise government, so now I am going to give them both barrels. Fortunately, the election is over, so whatever I write is not going to cause a shift in the balance of power (sigh of relief from all political parties).

I own and run a small business. We have been in business for 24 years. We are consulting engineers. Right now, we are very nearly broke. There are reasons for this. One is that we did extensive design work for a hospital in the North West. The hospital was put on a fast track after the death of 144 mentally ill patients were moved from Life Esidimeni care centre to a number of nongovernment organisations, some of which were not legally registered. The North West Department of Health has not paid our outstanding fee of R90 000. This is nothing to the North West government, but it is half our salary bill for one month.

Further, being broke, we need more work. It is very slow out there. But, yay, we do get asked to quote on work. We also get asked to fill out vendor application forms. Typically, for State-owned power utility Eskom, which has an admin staff that could run the logistics department of the USS Enterprise, there are 14 documents you must provide – from your black economic-empowerment status to your safety plan, quality plan, on-site accident investigation plan, letter of good standing from the compensation commissioner, Eskom information appendices 1 to 8, proof of value-added tax registration and your tax clearance certificate. Now, we are not children or cry-babies. We manfully fill all this out. But then we ask the South African Revenue Service (Sars) for our tax clearance certificate, these days in the form of a pin number. Dealing with Sars is like dealing with an animal that has a nervous system such that communication between various limbs and the brain is not very swift.

Having become registered, we are now asked to submit a tender for the work. Since few consulting engineers can “supply and install Type 1 SANAS-calibrated recording sound-level meters with 1/3 octave and 1/1 octave functions with trigger and audio record facility and submit a report with findings”, the clients can only get one tender for the work. We have six such instruments, so it is not a problem for us. The instruments cost about R100 000, so the competition is not fierce, exactly. But guess what? The client now finds we are a sole supplier. They have to have competing tenders. (Imagine having competing tenders for a heart surgeon!) So a whole lot more paperwork.

The point is that it is very difficult to stay in business if you are a small business. I do understand that some large organisations, such as Eskom, are riddled with employees who are registered as vendors to Eskom and supply goods and services while posing as sole suppliers.

The way to stop this is not to make legitimate businesses provide more paperwork. You get a task team and root them out. If government wants to stimulate the economy (my opinion is that it does not), national departments and provincial administrations should pay their bills. It may be said that KwaZulu-Natal and the Western Cape pay their bills. The North West doesn’t. And making people tender for work? If you get a brilliant architect, what tender value is placed on brilliance?

The simple fact is that small businesses employ people. If they become too regulated, they either go out of business or go underground. In both cases, the taxes they would have paid disappear. Is this the intelligent thing to do? Really? The plumber who works for us on and off, Billy, pays no tax and insists on being paid by immediate bank transfer. He says he does not understand tax stuff. Smart boy.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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