Committee Report on Small Business Development Budget

Meeting report

The Chairperson reminded the Committee that the draft of strategic plan 1 was the Committee Members’ inputs contributed during the Committee’s last workshop. The Content Advisors just had to write them formally.

The Content Advisor, Mr Sibusiso Khuzwayo tabled the report.

Mr R Chance (DA), pointed out that on the last bullet point on page 19, the sentence ‘Various pieces of legislations will be tabled for amendments in this fifth term of Parliament including the National Small Business Act of 1996.’ was vague. He proposed it be replaced it by ‘The National Small Business as amended in 2004 will be tabled as well as other pieces of legislation appropriate to the Committee’s mandates in the current financial year’ as this put more emphasis on the fact that the tabling would be done in the current financial year, the amendment made in 2004 and the tabling of other pieces of legislations were appropriate in fulfilling the Committee’s mandates.

Mr X Mabasa commented that the sentence should not be phrased such that it was compelled to pass a new legislation each year of the five years because sometimes it may not be necessary.

Mr Khuzwayo replied that the phrase proposed by Mr Chance did not compel the committee to make new legislations each year.

The Chairperson suggested that the sentence be changed to ‘The National Small business Act of 1996 as amended in 2004 would be prioritised for amendment including other pieces of legislation that were necessary for advancing development of small businesses and cooperatives in South Africa.’

Mr Khuzwayo agreed to the way the Chairperson phrased the sentence and further proposed to replace ‘including’ with ‘as well as’. This change was adopted.

Mr Khuzwayo directed the attention of the Committee to page 19, bullet point 2, which read ‘One of the priorities of the Committee would be the careful monitoring of the Department and its agencies to ensure that they were in line with national priorities in the NDP to also ensure that the Department and its agencies would sharpen their focus on increasing the number of micro and informal enterprises that the Department supports, to also ensure that Department review the strategy for SMM development and entrepreneurship, to also ensure developing and supporting cooperatives in an effort to positioning them as community economic development instrument. Developing the market for small enterprises, in particular, the survivalists, the street vendors, the hawkers, spaza shops, rural enterprises, and basically to include a full spectrum of small and micro enterprises and also incubators for small enterprises and strengthening the departmental operational capacity.’ These were changes in wording that had been made since the last meeting.

Mr Chance commented that bullet point 2 said too many things at once and needed to be broken down. Another bullet point should be added to say that the Committee would ensure that the Department and its agencies’ strategies were aligned and implemented in a coordinated fashion.

Mr Mabaso agreed to break down the paragraph but cautioned that the Committee must not be understood to be implying that it was the responsibility of the agencies to deliver.

Mr N Capa (ANC) also agreed to break down point 2 and added that all point 2 components should still be included after being broken down.

Ms N November (ANC) added that both words - ‘hawkers’ and ‘vendors’ should be included.

Mr R Chance suggested the point be broken down as follows:

“One of the priorities of the Committee would be the careful monitoring of the Department and its agencies to ensure that they were in line with national priorities in the National Development Plan (NDP), and their strategies themselves were aligned.

To also ensure that the Department and its agencies would sharpen their focus on increasing the number of micro and informal enterprises that the Department supports, in particular, the survivalists, the street vendors, the hawkers, spaza shops, rural enterprises.

Reviewing the strategies for SMME development and entrepreneurship

Developing and supporting cooperatives in an effort to positioning them as community economic development instruments and facilitating the establishment of incubators for cooperatives

To include a full spectrum of small and micro enterprises

Facilitating adequate training of cooperatives by qualified and knowledgeable cooperative trainers.

Developing the market for small enterprises, and also incubators for small enterprises and strengthening the departmental operational capacity.”

The Chairperson added that numbers be used instead of bullets.

This change was adopted.

Moving on to page 20, Mr H Kruger (DA) reminded that points 1 and 2 on strategic goal 1 were agreed upon to be moved to strategic goal number 5. He also fixed grammar on point number 6.

On the same point, the Chairperson added ‘…relevant state departments, all spheres of government and state owned institutions.’

The Mr Khuzwayo added National Treasury on point 5.

These changes were adopted.

On page 21, Mr Khuzwayo included on point 13 the master plan, Cooperative Bank Development Agency, Cooperative Development Agency, Cooperative Academy and Cooperative Tribunal.

This change was adopted.

Mr Khuzwayo then directed the Committee to the annexure showing the objectives, indicators, targets, and risks and mitigating measures. During the creation of the annexure, he had identified gaps, however, he did not write or highlight them, and therefore could not point them out during the meeting. He requested to be given more time.

The Chairperson and the Committee insisted that they want to decide whether to adopt the Strategic Plan on the day of the meeting.

The other Content advisor, Mr Xolisile Mgxaji, suggested that his colleague look at the document and notes the gaps he identified so that they may be considered in the Strategic Plan for the following year.

Mr Chance asked the Content Advisor to remove the targets from the annexure because they would be included in the Annual Performance Plan.

Under risks, the Chairperson outlined three risks, which were insufficient capacity, insufficient budget and uncertainty as to where the responsibility lay.

Mr Chance suggested a mitigating factor that: a red tape unit must be established in the Department which mandate was to identify, quantify and reduces red tape in all regulatory measures relating to business and to make the environment where they operate business friendly.

The Chairperson proposed that Mr Chance’s suggestions should be rephrased in order to be more reflective of what the Committee discussed. She proposed that the measure be phrased as: To ensure that the Department of Small Businesses and Cooperatives establishes a unit within the Department that would identify, quantify, reduce red tape in all spheres of government with the political support from the presidency.

The Chairperson commented that the department on its own could not reduce red tape because it could be costly. The only thing the Department could do was to facilitate the reduction of red tape. The Committee agreed. Therefore the mitigating measure above changed to: To ensure that the Department of Small Businesses and Cooperatives establishes a unit within the Department that would identify, quantify and facilitate the reduction of the red tape in all spheres of government with the political support from the presidency.

Mr Mabasa asked if the Committee was looking to get more funding.

Mr Kruger replied yes and added that the benefits from expanding budget would be significantly more than costs.

The Chairperson asked that the Content Advisors remove the baseline columns and only put in the one for 2016/17.

Mr Kruger added a mitigating measure that there should be training for internal capacity.

Mr Kruger proposed that every member of the Committee study the Strategic Plan in their free time and come up with proposals for risks then they would discuss them one morning.

The Chairperson then asked if the Committee should postpone the adoption of the Strategic Plan.

Mr H Kruger suggested they adopt the first part of the Strategic Plan.

Mr Mabasa, T Khoza and T Mulaudzi supported Mr H Kruger’s proposal.

The Committee agreed to adopt the Strategic Plan with a view to working on the mitigating factors and risks to see that they were aligned.

As none of the Committee members read the Budget Vote Report Mr Chance proposed that the meeting should be adjourned considering that there were still two more meetings in which they would discuss the Strategic Plan and that Members should come with proposals in the next meeting. There was no contrary view.

The meeting was adjourned.