Question NW2216 to the Minister of Small Business Development

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19 June 2023 - NW2216

Profile picture: Bagraim, Mr M

Bagraim, Mr M to ask the Minister of Small Business Development

With reference to the President of the Republic, Mr M C Ramaphosa, acknowledging in the recent State of the Nation Address that the Government does not create jobs, but merely has to create the environment for businesses to create jobs and that it was small business that would be creating the majority of jobs needed to kick-start job creation in the Republic, but that nothing has yet been done to tackle the onerous labour legislation and regulations to free up small businesses to create jobs, (a) what are the reasons that nothing has been done and (b) on what date does she intend to tackle the onerous regulatory environment?”


I have been advised that:

a) As means of addressing the onerous labour legislation and regulations to free up small businesses to create jobs, the Department of Small Business Development (DSBD) has activated several interventions which include, undertaking a dedicated exercise to identify and review legislation and reforms that impede on Small, Micro and Medium Enterprises (SMMEs) and co-operatives’ growth. The update has so far embarked on the initial process of consultations focused on the primary users of this legislation namely, municipalities who are the sphere of government that must implement business licensing by-laws. A total of 29 pieces of regulatory impediment legislations have been identified across the three spheres of government that will culminate with a clear implementation and action plans for action. This exercise was conducted in partnership with key stakeholders in the ecosystem. These stakeholders include but not limited to the following:

  • Departments of Economic Development across all nine (9) provinces.
  • South African Local Government Association (SALGA).
  • The Social Protection Community and Human Development Cluster.
  • Department of Cooperative Governance and Traditional Affairs (COGTA).
  • Department of Home Affairs.
  • Districts and local municipalities.

The DSBD is also implementing the initiatives that are also aimed at lessening regulatory barriers for SMMEs and co-operatives which the Pilot Administrative Simplification Programme (PASP) and Municipal Performance Monitoring. The program aims to ease the strain that prolonged processing delays have on businesses and public resources. Administrative simplicity will help with process improvement at municipality level. The initiative entails exposing the municipality stakeholders and users to a five (5) days’ workshop for optimisation of processes. Some of the municipalities that have already benefitted from this initiative include amongst others, the Ray Nkonyeni (Ugu District), Ubuhlebezwe (Harry Gwala District), and the City of Umhlathuze Local Municipalities (King Cetshwayo District). The Department is also:

  • In the process of developing a Municipal Red-tape-Reduction Dashboard which will support Municipalities to track all the administrative bottlenecks for urgent attention.
  • Rolling out the Red Tape Reduction Awareness workshops whose purpose is to create awareness and instil the culture of intolerance towards red tape. A total of twenty-five (25) municipalities have already participated in these workshops during the 2022-23 financial year.
  • Hosting the Inter-Provincial Task Team (IPTT) on red tape reduction and ease of doing business. The IPTT is a quarterly platform for the DSBD, Provincial Departments of Economic Development, COGTA, Red-Tape Reduction Committee at the Presidency, key entities to SALGA to identify and discuss approaches to address systematic red tape issues that impacts SMMEs / co-operatives. This platform is also utilised to exchange best practices, foster peer learning, and build a community of best practice, this session is hosted quarterly. As a result, important sectoral problems for action are escalated for action. So far, about sixteen (16) IPTT meetings and workshops were held during. Some of the successes of the IPTT include amongst others, addressing bottleneck in the National Department of Transport policies of clearing the backlog in the tourism operating license applications. Over two hundred and twenty-seven (227) renewals have been processed.

b) The DSBD has already started an in-depth review of the regulatory barriers affecting small enterprises and the urgent need for regulatory change regarding the Businesses Act of 1991 and the Licensing of Business Bill. The Department has, so far, determined that there are twenty nine regulatory impediments that need to be addressed at the national, provincial, and local levels of government in the upcoming fiscal years. This project will concentrate on implementing these specific remedies, options, and reforms across the three spheres of government. The Businesses Amendment Bill that addresses some of the regulatory impediments will be presented to Parliament during the current financial year (2023-24). After the review of the twenty nine regulatory impediments the an implementation plan will be developed and presented to Cabinet after consultations have been finalised with the affected institutions by the end of the current financial year.

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