Tag Archive | small business development

Red Tape Impact Assessment Bill welcomed

hendrik krugerLegislation 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

lawyerbriefsThe 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.

fin 24In 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

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.

red tapeThe 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.


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 law south africaAfrica 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


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Minister Davies finally gets his Cooperatives Bill approved

Cooperatives Bill will assist small business ventures…..

The Cooperatives Amendment Bill, promoted by the minister of trade and industry,  Dr Rob Davies and perceived by him as a critical legislation in the development of black business enterprises and rural development, has finally been approved by the National Assembly and no doubt will added to the statute book early in the New Year once concurrence is received by the NCOP.

Seen as integral part of New Growth Plan

Cooperatives represent a key aspect of the department of trade and industry (DTI) contribution to the New Growth Plan and DTI sees the new law as a major contribution towards the creation of jobs, poverty alleviation and economic growth.

Originally, two separate bills were tabled in parliament in May, one to deal with provincial issues known section 76 bill and the other as section 75 but eventually, for ease of legislative process and the necessity to speed up matters, a joint-tagging decisions saw both Bills combined as a result of a specialised committee report.

Much debate and long hearings

The bill has seen extensive hearings from many parties; alterations as a result of experience in other countries and the learning processes of the cooperative movement so far in South Africa, black co-operatives being in their infancy and white farming co-operatives having contributed to growth in the more developed areas of agricultural sectors for many years.

One of the primary aims of the legislation, the consolidated Bill states, is to create a co-operative agency to lead to a re-vitalised and more comprehensive co-operative movement in South Africa, establish a co-operatives tribunal to handle conflicts, disputes and to ensure compliance.

Government cooperative agency to assist training

A secondary objective of the agency would be to establish in the future and training academy and an co-operative advisory council to build the movement in field operations and development the potential of black emergent business.


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