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Review regulation for SMEs, urges DA

Jul 03 2013 18:36 Sapa
Rob Davies

The DA has criticised Trade and Industry Minister Rob Davies for introducing the draft business licensing bill. (File photo, News24)

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Johannesburg - Trade and Industry Minister Rob Davies should lead by example in removing red tape for small business, the DA said on Wednesday.

Democratic Alliance MP Geordin Hill-Lewis welcomed - with some reservations - the launch of guidelines to remove red tape at local government level for small businesses.

"Davies should lead by example if he is serious about this fight against red tape... A good place to start would be to follow the National Development Plan's proposal of setting up an expert panel for across-the-board regulatory review for small, medium, and micro enterprise," he said.

Hill-Lewis criticised Davies for introducing the draft business licensing bill and described it as "job-killing red tape".

National government regulations continued to remain the biggest hindrance to the launch of new businesses and job creation, he said.

Earlier, Davies announced guidelines to reduce municipal red tape to help small business development. The guidelines were launched by the departments of trade and industry (DTI), and cooperative governance and traditional affairs, and the SA Local Government Association, in Midrand.

They were intended to provide mechanisms on reducing red tape at local government level. The guidelines sought to contribute towards improved service delivery, job creation, and poverty reduction.

They stemmed from a study conducted by the dti across 12 municipalities, which revealed red tape was a problem at local government level and hampered small business growth.

Small business growth

"Of every seven small businesses operating today, only two will still be operating in a year from now," Davies said.

The new guidelines would help improve municipal business communication, by-laws, regulation, and supply chain management.

"Many municipalities have a policy which says you can’t just trade anywhere you like. We’re not like Bangkok; there are certain areas where people are allowed to trade," he said.

The trading environment for small businesses had to change, he said.

"Where are our people going to trade? How do you get them trading in those areas? Are those areas appropriate areas for people to trade or are we just forcing small enterprises among black people to just trade in the poorest communities," he asked.

Davies said the department had published the business licensing bill, aimed at creating a database of all businesses operating in the country.

The bill, when it became law, would be used to remove illegal businesses in the townships, which had constrained small business growth for some time.

The SA Chamber of Commerce (Sacci) welcomed the publication of the guidelines.

"The implementation of these guidelines will be a significant step towards creating a supporting environment for SME growth across the country," said Sacci CEO Neren Rau.

The chamber agreed with Davies that cutting red tape was not synonymous with deregulation.

"However, the root of all red tape is regulation. This means all levels of government need to be pro-active to stop red tape from entering the economy," Rau said.


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da  |  ndp  |  sacci  |  rob davies
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