THE NATIONAL ASSEMBLY
QUESTION FOR WRITTEN REPLY
665. Mr M G P Lekota (Cope) to ask the Minister of Trade and Industry:
Interdepartmental transfer on 26 April 2013]
(1) Whether the (a) advisory board and eight task teams that were
appointed by the Government in 1998 to address legislation that
was severely impeding small businesses and (b) new regulatory
unit to scientifically assess the effects of regulation on small
businesses, which was appointed in 2000, had (i) completed their
respective tasks and (ii) made firm recommendations to him; if
so, what are the relevant details in each case;
(2) whether his department is now ready to implement the recommended
changes with immediate effect; if not, why not; if so, what are
the relevant details? NW826E
Reply:
1) Inappropriate regulation has long been recognised by the South African
government as an impediment to the emergence and growth of small
businesses. As far back as in 1995, in its White Paper on National
Strategy for the Development and Promotion of Small Business in South
Africa, the Department of Trade and Industry (the dti) articulated the
negative impact of inappropriate regulation:
âInappropriate or unduly restrictive legislative and regulatory
conditions are often viewed as critical constraints on the access
of small enterprises into the business sector and as obstacles to
their growth.
a) Based on the above government appointed a task team in 1998 to oversee
regulatory review processes commissioned. The regulatory review
looked at the regulation that can potentially constrain the
development and growth of the SMME sector. This review highlighted a
number of areas that needed to be changed to provide for a conducive
regulatory environment for small business development. The review
came up with the recommendations across the spectrum of government
regulations. These recommendations were communicated to sector
departments to review areas of their legislation identified. This
review was subsequently followed by a comprehensive regulatory review
process led by the Presidency in collaboration with the dti and
National Treasury in 2005.
b) The Department did not establish the regulatory review Unit. However,
the then Ntsika Enterprise Promotion Agency, which was the first
enterprise support agency established by the dti, provided for a
capacity to continuously look at firstly the implementation of the
regulatory review and secondly, monitor and advise on a potential
impact of the new regulations to small business development.
The 2005 review recommended for a regulatory impact assessment to be
institutionalized in the Presidency wherein every government
department will be required to submit an assessment report to the
Presidency on any new legislation or regulation proposed. The review
also recommended for the establishment of the impact assessment units
in all the national departments to do the internal investigations of
new legislation that can potentially have negative impact to
vulnerable groups including small businesses. These units were
established by some departments and the dti has one such unit within
the Corporate and Consumer Regulations Division.
i) The task team completed its work in June 1999 and the process made
comprehensive recommendations some of which were left to the
sector departmaents to implement.
ii) As a highlight to this process, a proposal was made to look
at two major areas i.e. the regulatory impact assessment
instrument as a filtering mechanism for the new and proposed
regulations. Secondly, a proposal was made to look at reducing
the red-tape at local government level. With regards to the
latter, the Department of Trade and Industry in collaboration with
the Department of Cooperative Governance and Traditional Affairs
(COGTA) undertook a pilot for local red tape reduction in 2011.
iii) The local red tape reduction pilot intended to address regulatory
and other compliance processes by establishing mechanisms to reduce
barriers and increase small, micro and medium enterprisesâ (SMMEs)
access to business opportunities. The process further intended to
improve understanding amongst municipal officials of wide-ranging
negative economic impacts of municipal red tape. The process
unearthed the need to develop skills to apply red tape reduction
methodologies and tools to reduce red tape (including the root
cause analysis and business process improvement). The pilot was
conducted in 12 municipalities of the four provinces mentioned
below:
1. North West: Moses Kotane and Madibeng;
2. Free State: Matjhabeng and Maluti a Phofung;
3. Limpopo: Ephraim Mogale and Elias Motsoaledi;
4. Northern Cape: Sol Plaatjie and Khara Hais;
5. Eastern Cape: Lunkhanji and Buffalo City;
6. Kwa Zulu Natal: Kokstad and Umzimkhulu.