Cape Town – National legislation could be passed that would cut red tape and prevent new laws being made that would hamper small business growth, like the recent visa regulations.
The Democratic Alliance (DA) in February tabled the Red Tape Impact Assessment Bill in Parliament in its most ambitious attempt yet to promote entrepreneurship in South Africa.
While most bills tabled by the opposition are summarily rejected by the ruling African National Congress, Henro Kruger believes there is enough unity among Members of Parliament regarding small business growth and the need to reduce red tape to ensure a different outcome for this bill.
Kruger, who heads up the DA’s small business portfolio, told Fin24 that behind the glare of politicking there is sense of united action among all MPs working in the Small Business Development Portfolio Committee.
“In this case, everyone in government is talking about reducing red tape,” he said. “I did a lot of research and I took the whole world’s best practices and I built them into this bill.
“Technically, they can’t refuse it,” he said. “If they refuse it politically, I think businesses are the ones that are going to suffer.”
One of the benefits of the bill would be its review of all other laws being passed, to ensure they do not have a negative effect on small business. Such a measure would have prevented the child visa regulations coming into effect, Kruger said.
The visa regulations were aimed at reducing child trafficking, but the consequence was a dramatic drop in tourism numbers to South Africa.
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China had the largest decrease of 28.4%, from 5 823 tourists in June 2014 to 4 167 in June 2015. The regulations required foreign tourists who need a visa to visit South Africa to appear ‘in person’ and submit biometric data when applying for a visa.
As part of a clampdown on child trafficking, the requirement for all children travelling into or out of South Africa to travel with an “unabridged” birth certificate as well as an applicable letter of consent from absent parent/s came into effect in June 2015.
Government was forced to revise the laws to reverse the trend, but the damage had already been done.
WATCH: Henro Kruger explains how the Western Cape Red Tape Reduction Unit inspired the bill
According to the Department of Small Business, SMEs generate in the region of 42% of SA’s gross domestic product and account for 47% of total paid employment in South Africa. This is where the focus of government needs to be in order to promote growth, the DA said.
"Red tape is a hidden tax that eradicates jobs and suffocates businesses," Kruger said in an official statement. "Reducing the burden on small businesses stemming from over-regulation has become an important policy objective in economic growth strategies across the world. South Africa must follow international best practice in this regard in order to unlock our economic potential.
"The DA will continue to find ways through which it can be reduce red tape in order to create real jobs for the 8.3 million jobless South Africans."
READ: The Red Tape Impact Assessment Bill