National Small Business Amendment Bill: hearings

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Trade, Industry and Competition

23 May 2003
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Meeting Summary

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Meeting report

23 May 2003

Chairperson: Dr R Davies (ANC)

Relevant Documents:

Services SETA Submission
National Small Business Amendment Bill [B 20-2003]

Services SETA

The Services SETA submitted that neither the National Small Business Amendment Bill nor the Act properly caters for the needs of truly small businesses. To entrust the functions of training, advice, support, research and information dissemination solely to Ntsika does not make sense given the presence, impact and penetration of SETAs. They are more qualified to execute these functions proficiently due to their structure and delegated competencies.

The Committee was impressed by the Service SETA submission and asked the Department to look at Clause 2 specifically, and to answer the issues raised by this submission.

Services SETA Submission
Mr T Mabuza, Chairperson of Services SETA, and Mr I Blumenthal, CEO of Services SETA, spoke to the Committee about how SETAs can be further utilised by both small businesses and government (document attached).

Mr Blumenthal addressed the Committee as to the workings of the Services SETA. He explained that the Services SETA represents 29 industries and 60 000 small businesses. Mr Blumenthal argued that the Services SETA can participate with organised business and organised labour in a more beneficial way than Ntsika currently does.

Mr Blumenthal argued that SETAs are already funded and have the statutory base to represent small businesses. SETAs can address all industries frequently, and better than Ntsika has done. Ntsika does not have an effective function for emerging small businesses. In terms of the National Small Business Amendment Bill, definitions for "small", "turnover" and "number of employees" that are used in the Schedule can be defined by SETAs. Presently, a small company has not been able to benefit from the leadership offered by Ntsika. In polling 60 000 member companies, zero have engaged with or been approached by Ntsika. There has been scarce representation of their interests.

Mr Blumenthal asked the Committee to consider the small business. Collectively, the 29 industries represented by the Services SETA are referred to as "downstream" industries. That is untrue. Service industries are responsible for employing two million South African workers. Their interests must be represented. Mr Blumenthal recommended that the Bill make provision for Sectoral-specific Agencies to operate with the same delegated authority as Ntsika, which currently operates as an exclusive Agency. Such Sectoral-specific Agencies would be positioned to integrate sectoral-specific SETAs into their structures, and in so-doing would be in a better, more directed and focused position to act on behalf of small businesses.

Mr Mabuza clarified that the Services SETA was appealing that synergies were necessary for the improvement of small businesses.

The Chairperson stated that he sympathises with the argument put forth by the Services SETA. The Department needs to take the work of SETAs more seriously. He asked how much of an issue it was to amend the powers given in the principal Act.

Mr S Rasmeni (ANC) stated that the question of amending the principal Act could clarify how the Committee should proceed. He questioned whether the Services SETA had a specific relationship with Ntsika. He asked how SETAs are addressing the plight of the previously disadvantaged.

Prof B Turok (ANC) stated that the submission by the Services SETA was important because the Committee was interested in the effectiveness of Ntsika. He asked them to document what was stated to the Committee, including the questionnaire filled out by the 60 000 member companies of the Services SETA.

Mr Blumenthal clarified that the Services SETA was not applying to be the sectoral leader, or to become the sectoral specific agency. However, the Department has the authority to accredit more than one agency. The addition of SETAs would lead to greater quality control. SETAs would work together with Ntsika. Sectoral specific agencies would be spending skills money on activity. Small businesses would make sectoral applications to organisations including SETAs.

The statistics published by Ntsika are not only out of date, but also irrelevant. As a SETA, the research has been done from the ground up. Research is done on budgeted activity and tendered activity. The statistics compiled by Ntsika are irrelevant to our 29 industries.

Currently, there is no co-operation between Ntsika and SETAs. Ntsika is effective in industries such as mining and manufacturing, but is not appropriate for assisting small businesses. Mr Blumenthal apologised if his argument was too strong and impassioned.

Mr Mabuza answered the question concerning what the SETAs are doing for the unemployed. SETAs offer learnership opportunities to the unemployed so that they can acquire on-the-job experience.

Mr Blumenthal addressed the issue of what the SETAs are accomplishing. He stated that the SETAs are responsible for the registration of standards throughout industries. SETAs also register learnership programs. Currently four hundred employed by SETAs are traveling around the country performing job training activities. 1 800 people have been through a fifteen module programme designed by SETA that is set up to teach business planning activities. Statistics show that for every 100 people who complete the programme, 20 new businesses are formed. Self-reliant communities of small businesses are being created throughout the country.

Mr Blumenthal related that the document that contains the answers of the 60 000 member businesses concerning Ntsika can be furnished to the Committee within eight weeks.

Ms C September (ANC) asked what synergy the Committee could form from government resources. She asked if the SETA was seeking amendments to the Bill. She suggested the Committee consult with the Minister on potential changes. Finally, she asked if the SETA was consulted when the Bill was drafted.

The Chair suggested that the Committee continue with the legislative process. He did not want to begin an organisational battle with some claiming that SETAs are doing a bad job and vice versa.

The Chair explained that Clause 2 of the Bill, detailing the Minister's power to consult small business, was poorly worded. The clause attempts to establish a structure for a minister to consult with the sectoral bodies or representatives. If the arguments made against Ntsika were to be found accurate, the weaknesses of Ntsika will add to the problems of this clause.

Ms M Ntuli (ANC) asked what amendments are necessary and what is the relationship with local governments.

Mr Blumenthal explained with regard to proposed amendments, that he believed in the existence of a Council, but that the Council should be as inclusive as possible.

He explained that the legislation allows for an application for a group that is an alternative to Ntsika.

The SETA is engaging with local government to raise specific issues, such as those of licensing and the use of the bargaining council. Other issues that the SETAs raise with local government, often through co-operation with SALGA, include health and safety considerations and the policing of industries.

Ms Ntuli questioned what the SETA was doing to help the development of small businesses in rural areas.

Mr Blumenthal answered that the SETA did not have programmes for rural areas as of yet. Programmes for rural areas are still in the planning stage, but such programmes are not a priority because the Services SETA is still concentrating on urban policies that potentially affect more people.

The Chairperson turned the Committee's attention to Clause 2 of the Bill which he stated must be examined. The phrase "may consult" may lead to legal problems. The Department would return to the Committee with a response to this problem.

The meeting was adjourned.





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