Question NW521 to the Minister of Small Business Development

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19 April 2017 - NW521

Profile picture: Krumbock, Mr GR

Krumbock, Mr GR to ask the Minister of Small Business Development

Since her reply to question 774 on 5 April 2016, (a) what is the current status of the plan to reduce red tape in the Khara Hais Local Municipality in Northern Cape, (b) what is the total number unnecessary (i) policies, (ii) by-laws and (iii) regulations that were rescinded during the process to reduce red tape in the specified municipality and (c) what total amount of administration costs will the specified intervention save businesses in the municipality; (2) can she list three or more examples of the red tape that was cut because of the intervention in the municipality?”

Reply:

(1) (a) Since April 2016, the Department of Small Business Development (DSBD) programme in partnership with Department of Cooperative Governance and Traditional Affairs (CoGTA) and the South African Local Government Association (SALGA), begun the process of assessing the implementation of the Red Tape Reduction (RTR) guidelines by municipalities. This process is also supported by the International Labour Organisation (ILO). The assessment is based on reducing the regulatory and administrative burdens as experienced by small, micro and medium enterprises (SMMEs) and Co-operatives within the different municipalities. The assessment is based on the following seven indicators and associated legislation/regulations:

(i) Effectiveness of the complaints notification system as governed by the Municipal Systems Act;

(ii) Communication of relevant business information by municipalities to SMMEs and Co-operatives as governed by the Promotion of Access to Information Act;

(iii) Municipal building plan approval processes as governed by the National Building Standards Act, Spatial Planning and Land Use Management Act as well as Municipal Services Charter;

(iv) Lengthy and inefficient supply chain management processes (which ultimately affects the 30-day payment system). Relevant legislation would be PPPFA, MFMA and Preferential Procurement Regulations;

(v) Municipal business registration and permits relevant legislation includes: Business Act, National Health Act, National Building Regulations and Building Standards Act including various by-laws those which are relevant to the business licensing process e.g. municipal by-law on food or tourism regulations;

(vi) Development and enforcement of municipal by-laws that promote business development, some of the relevant legislation include the Municipal Systems Act and Local Government Transition Act;

(vii) Assessment of percentage spent in procurement on SMMEs and Co-operatives aligned to the PPPFA and MFMA and preferential procurement regulations.

(b) In terms of Khara Hais Local Municipality the total number of unnecessary (i) policies, (ii) by-laws, and (iii) regulations including associated administrative burdens considered for review regarding red tape reduction as guided by the above mentioned indicators and associated legislation/regulations are as follows: lengthy processes of issuing of permits within the transport industry which impacts on small businesses, limited information provided to SMMEs and Co-operatives in terms of rezoning processes and procedures, and in terms of construction industry registration process including grading does not prioritise targeted groups (women, youth and disabled).

(c) The total amount of administration costs is determined by each municipality however the examples mentioned in points below outline how the red tape reduction intervention by DSBD has supported the municipality to improve governance and reduce the burden regulatory and administrative burden for the benefit of SMMEs and Co-operatives. The total value of these administrative interventions have not been calculated by the municipality.

(2) Examples that outline improvements in the business environment within Khara Hais local municipality include: (i) the establishment of a dedicated human and financial resources for issuing permits; (ii) workshops are conducted on an on-going-basis regarding the rezoning processes and procedures; and (iii) partnership is created with National Home Builders Registration Council (NHBRC) in terms of grading within the construction sector and the prioritisation of targeted groups..

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