Legislation to be sifted for red tape….
In what appears to be a carbon copy of what has been achieved notably in Australia and to a lesser extent in some ten other countries, DA MP Hendrik Kruger has introduced a refreshing draft private member’s bill, simply called the Red Tape Impact Assessment Bill.
Hon. Kruger serves on both Parliament’s Portfolio Committee on Small Business Development and the Agriculture, Fisheries and Forestry Committee and his service therefore as a member of Parliament would indicate that he knows what he is talking about.
Regulatory Impact Assessments have been considered and skirted around for years in South Africa but the terminology “red tape” indicates a more direct approach that has been adopted towards this crippling issue for small business and the farming community. It should go a long way towards assisting business and investment if applied in a generalised manner.
Magic words
The preamble to Bill states its aim as legislation “to provide, inter alia, for the assessment of regulatory measures developed by the executive, legislatures and self-regulatory bodies, in order to determine and reduce red tape and the cost of red tape for businesses.”
A copy of the draft Red Tape Impact Assessment Bill and a memorandum setting out its intentions are obtainable by simply going into the Internet where a copy in Word is available. Comment is now called for in terms of the rules of the National Assembly since it is a private member’s bill.
Such is introduced with the permission of the Speaker of the House resulting in submissions to Parliament itself. Probably hearings will also be called after the Bill is properly tabled.
The detail
The description of the Bill is summarized as follows: – “To provide for the assessment of regulatory measures developed by the executive, the legislatures and self-regulatory bodies in all three spheres of government, in order for them to detect and reduce red tape and the cost of red tape for businesses.”
Also, the promoters say, it is to provide for the establishment of administrative units to assist in the red tape impact assessment process and to prepare red tape impact statements. This unit should provide assistance to businesses in overcoming red tape challenges and carry out “mapping exercises” for the preparation of red tape impact statements for a regulator to pronounce upon.
In an interview with Fin24, Hendrik Kruger gave an example of how the Bill would work. “Take the Small Business Act” he said, “They are going to have to unpack it, assess it and see what the actual impact is of red tape on small business.” Mapping as a process involves going through the whole Bill and stating the red tape impact of each requirement or clause with one aim.…the cost of the Bill to business, he said.
He quoted an example. “If they say you must go twice a year to SARS office to get a tax clearance certificate, then they will cost that action. Then they will say, alright it cost let’s say R1000. But there’s about 100 000 small businesses in South Africa, so just to get a tax certificate once a year costs business 100 million bucks.”
“Tax certificates are important”, he acknowledged, “but if we do it every second year, then we save R50m from the GDP that’s previously been wasted. Can you see the enormous cost nationally, something we don’t know at the moment?,” he asked the interviewer on Fin24. “Government just says, go get a tax certificate. Bu
parliamentary library
t to tell all of that national cost to an individual official is a bit of a problem, so we must legislate for it.”
Red tape in Oz
Christian Porter, the MP who introduced a similar private member’s Bill to the Australian Parliament in Canberra claimed that “the bulk repeal of regulations introduced by the Attorney-General, was likely to repeal over 10,000 legislative instruments and over 1,800 Acts of Parliament”.
In Australia it appears that the legislation was more over-arching, with a rule claiming that regulation should not be the default option for policy makers but rather the policy option offering the greatest net benefit.
The Australian Bill also referred to the cost burden in that every substantive regulatory policy change must be the subject of a Regulation Impact Statement; that regulators must consult in a genuine and timely way with affected businesses, community organisations and individuals; policy makers must consult with each other to avoid creating cumulative or overlapping regulatory burdens.
Also the Australian version stated that the information upon which policy makers base their decisions must be published at the earliest opportunity; regulators must implement regulation with common sense, empathy and respect and all regulation must be periodically reviewed to test its continuing relevance. The Australian government claims that in fact some A$2,5bn has been saved through these measures since September 2013.
Outcomes
Western Australian Mines and Petroleum Minister Bill Marmion put it well when he remarked that when introducing the same sort of state Bill in mining regulations, that whilst “cutting red tape” has strong political appeal, the broader, more significant objective is to ensure laws and regulations respond to economic, social and environmental demands and that regulations operate as effectively and efficiently as possible.
South Africa named
Insofar as SA is concerned, both the IMF and World Bank have both stated the “cost of doing business in South 
Africa is unnecessarily high” but the relation between the necessity for a regulation and business cost of such a move has never been formulated, records show.
In his interview with Fin 24, Kruger said that the average government staff member has never really heard of the expression ‘cost of doing business’ and has little perception of what this means “to the outside world.”
Commentators at this stage have indicated that across party lines reaction to this Bill might be favourable and have said it might be the time for business and industry to rather relate the term ‘cost of doing business’ to more straight forward terminology such as cost in terms of loss of jobs.
Previous articles on category
Licensing of Businesses Bill re-emerges – ParlyReportSA
Business Interests Bill to expose government corruption – ParlyReportSA
Minister Davies withdraws Licensing of Businesses Bill
Licensing of Businesses Bill to set norms – ParlyReportSA
