Hansard: NCOP: Unrevised Hansard
House: National Council of Provinces
Date of Meeting: 16 Mar 2023
Summary
No summary available.
Minutes
UNREVISED HANSARD
NATIONAL COUNCIL OF PROVINCES
THURSDAY, 16 MARCH 2023
PROCEEDINGS OF HYBRID NATIONAL COUNCIL OF PROVINCES
Watch video here: Plenary (Hybrid)
The Council met at 14:02.
The House Chairperson Committees took the Chair and requested members to observe a moment of silence for prayers or meditation.
The HOUSE CHAIRPERSON (Mr A J Nyambi): ... in the hybrid sitting enjoys the same powers and privileges that apply in the sitting of the National Council of Provinces. For purposes of the quorum, all delegates who are logged on the virtual platform shall be considered present.
Delegates must switch on their videos if they want to speak. Delegates should ensure that the microphones on the gadgets are muted, and must remain muted, especially if it happens before we start. All delegates in the Chamber must connect to the virtual platform, as well as to insert their cards to register on the Chamber system.
Delegates who are physical in the Chamber must use the floor microphones. All delegates may participate in the discussion through the chatroom. The interpretation facility is active, and permanent delegates, members of the executive, special delegates and the SA Local Government Association, Salga, representatives on the virtual platform are requested to ensure that the interpretation facilities on their gadgets are properly activated to facilitate access through interpretation services.
Permanent delegates, special delegates and the SA Local Government Association, Salga, representatives and members of the executive in the Chamber shall use the interpretation gadgets on their desks to access the interpretation facilities. I will now allow an opportunity to delegates to give Notices of Motion. [Interjections.] We only have Ndongeni. Okay, Ndongeni, you are the first one.
NOTICES OF MOTION
Ms N NDONGENI: Chair, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the Council-
(1) debates gender transformation and the advancement of women in the country’s justice system, especially in senior leadership positions;
(2) notes that the need for gender transformation in the judiciary was made even more urgent and essential by the adoption of United Nations General Assembly Resolution 75/274 of 2021, which established the International Day of Women Judges to be observed every year on 10 March to promote the full and equal participation of women at all levels of the judiciary.
Ms S B LEHIHI: Hon Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the EFF:
That the Council debates how the private sector continues to exploit its employees and fails to comply with labour laws in place.
Ms B M BARTLETT: Hon Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
debates ways to dissuade and discourage RDP title deeds holders from selling and renting out their houses after receiving their title deeds.
Mr K MOTSAMAI: Hon Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the EFF:
That the Council debates the relevance of issuing out of traffic fines to motorists, in areas such as Emfuleni Local Municipality, where roads are in poor condition and are filled with potholes posing a danger to motorists.
Ms M O MOKAUSE: I hereby give notice that on the next sitting day of the House I shall move on behalf of the EFF:
That the Council debates and find solution on the ongoing water problems in Setsoto Municipality of the Free State and the bad road infrastructure.
Ms S SHAIKH: Hon Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the Council-
(1) debates the persisting high levels of crime in South Africa despite numerous interventions to wage a concerted battle against the heartless criminals who continue to callously, cold-bloodedly and heartlessly hold our people to ransom; and
(2) further notes that even though the murder rate has halved between 1994 and 2009, South Africa has exceptionally high rates of murder, gender-based violence, rape, robbery and violent conflict.
Ms N E NKOSI: Hon Chairperson, I hereby give notice that on the next sitting day of the House I shall move on behalf of the ANC:
That the Council debates the development measures geared at ensuring that learners don’t drop out at school before writing their matric examinations.
DA CONCERN OVER NATIONAL STRIKE
(Draft Resolution)
Mr R BADENHORST: House Chairperson, I move without notice:
That the Council—
(1) notes the recent claims made by the Land Party in the Overstrand that the DA’s court application opposing the planned national day of action on 20 March is racist;
(2) further notes that while peaceful protest is a constitutional right, any criminality committed under the guise of lawful protest will be prosecuted to the full extent of the law;
(3) it is noted that the Land Party’s declining support over the last two elections has led them to cheap allegations in an attempt to score political points ahead of the upcoming Ward 5 by-election in Zwelihle;
(4) notes the Overstrand as well as other DA governments’ commitment to maintaining the rule of law during protests and will do everything in our power to ensure that law-abiding citizens are not adversely affected; and
(5) lastly, to express gratitude to the Overstrand executive mayor, Annalie Rabie for continuous consultation with law enforcement and the SA Police Service, SAPS, to ensure the protection of citizens’ rights in the Overstrand and if any South Africans are victim of any possible crimes resulting from the protest, the DA has created an intimidation affidavit template for reporting intimidation and violence available on all DA social media platforms.
Motion objected
DR JAMES SEBE MOROKA 131TH ANNIVERSARY YEAR
(Draft Resolution)
Ms L C BEBEE: House Chairperson, I move without notice:
That the Council—
(1) notes that today marks the 131st anniversary of the birth of Dr James Sebe Moroka who was elected the president-general of the ANC from 1949 to 1952;
(2) further notes that Dr James Sebe Moroka was a medical doctor, landowner and an astute politician who was born in Thaba Nchu in what was then known as the Orange Free State. He presided over the ANC in one of its most active and effective phases since its establishment in 1912; and
(3) takes this opportunity to pay homage to the legacy of Dr James Sebe Moroka and acknowledge his indelible contribution in the fight for freedom and democracy for the marginalised, suppressed and discriminated masses of our people.
Motion agreed to in accordance with section 65 of the Constitution.
20 MARCH 2023 EFF NATIONAL SHUT DOWN DAY
Draft Resolution
Ms M DLAMINI: House Chairperson, I move without notice:
That the Council—
(1) notes that on 20 March 2023 the EFF together with the Federation of Trade Unions, Pan Africanist Congress of Azania, Land Party, other community activists and ordinary South Africans will embark on a national shut down to demand an end to load shedding and the resignation of Mr Cyril Ramaphosa;
(2) further notes that South Africa is currently facing an electricity crisis, high unemployment rates, high levels of crime, high cost of living, gender-based violence, GBV, debilitating quality of education and poor service delivery;
(3) acknowledges that Mr Ramaphosa’s term of office has been nothing but a disruption to people of South Africa; and
(4) further recognises the force alarm that has been realised by those who suffer from “swart gevaar” [black danger] and their handless that view a peaceful demonstration as a threat to their agenda. The EFF calls upon all South Africans to join in the shut down this coming Monday as we mark the day of our freedom.
Motion objected.
RISING VIOLENT CRIME THREATENS SOUTH AFRICAN STABILITY`
(Draft Resolution
Xitsonga:
Man B T MATHEVULA: Mutshamaxitulu,
English:
I move without notice:
That the Council—
(1) notes that a 12-year-old girl, Kgopotso Moseamidi, was found dead in a bush after being abducted from her home last week during a house robbery in Makgakgapatse Village, outside Giyani;
(2) also notes that her lifeless body was found tied with a rope, hanging in a tree at a nearby farm at Ga- Maphalle;
(3) further notes that South Africa is a country grappling with high levels of crime, particularly violent crime, with increasing levels of home invasions, armed robberies and murders;
(4) also notes that a case of murder and kidnapping has been opened, with two arrests made, one of which is a female relative known to the family.
(5) express our outrage and sadness for the senseless killing of Kgopotoso and hereby send our deepest condolences to the Moseamidi family; and
(6) may her soul rest in perfect peace.
Motion agreed to in accordance with section 65 of the Constitution.
Mr T J BRAUTESETH: Chairperson, on a point of order: I am not exactly sure of the Rule, but there is a high pitch noise at the back here, and it is really distracting a lot of us. I have confirmed that it is not in the ANC’s speech, but it is a high pitch noise and it is quite distracting. I don’t know if the sound and vision can do something. Thank you.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Already they are attending to it so that we can have peace. We sustain the point of order.
DYSFUNCTIONAL NORTH WEST PROVINCE MUNICIPALITIES
(Draft Resolution)
Ms C VISSER: House Chairperson, I move without notice:
That the Council—
(1) notes the crisis of collapse of all four district and
19 local municipalities reflecting a negative trajectory of all essential services in the North West province;
(2) further notes these 23 municipalities share the same similarities:
(a) historical unfunded budgets of which the North West provincial legislature, national department of the Department of Co-operative Governance and
Traditional Affairs, Cogta, and the Auditor- General are fully aware of;
(b) unreliable bulk water supply not caused by lack of bulk water supply, but due to inability of sound management and absence of the political will;
(c) no maintenance of all water, sewer, electricity and road infrastructure, fraud and corruption being the endemic status quo of municipal administrations, despite proof of mismanagement, no accountability or consequence management as documented in AG reports; and
(d) failing to supply the basic fundamental services needed by communities.
(3) further notes the impact of dysfunctional sewer plants caused by incapacity due to lack of discipline and engineering expertise causing pollution of all sewer treatment plants totally dysfunctional, decanting raw sewer, not complying with the SANS general legal limit in every stream, river, wetland, lake, and dam
draining into aquifers contaminating the water resources, and increasing the toxic level of the water communities must drink.
(4) that this House notes that businesses cannot keep economies running with dysfunctional public administration and a 54% unemployment rate. I therefore request that this House calls upon the Minister of Co-operative Governance and Traditional Affairs, Cogta, and the MEC for Co-operative Governance, Human Settlements & Traditional Affairs, Coghsta, to take up this cause so that the residents of the North West may live in dignity again.
Motion objected.
HORRIFIC SCHOLAR TRANSPORT ACCIDENT IN MPUMALANGA
(Draft Resolution)
Ms H S BOSHOFF: House Chairperson, I move without notice:
That the Council—
(1) notes with a heavy heart the death of two learners last week who were killed when two minibuses collided with a truck on the N4 toll road between Vosman and Emalahleni central business district, CBD;
(2) also notes that one life lost is one too many and our thoughts and prayers will be with the families of the victims during these difficult times. We also wish those who were injured a speedy recovery;
(3) further notes that the DA would like to request those who are transporting learners to avoid overloading, speeding and observe traffic rules and signs all the times;
(4) takes this opportunity to call on Officials from the Mpumalanga Traffic Road Department to be more visible and enforce traffic laws at all times, and to furthermore take swift action against those who violate the rules of the road;
(5) further notes that the departments in Mpumalanga responsible for the scholar transport system should overhaul the whole system and put regulations in place
as some of those transporting our learners do not have the required permits and others are using unroadworthy vehicles; and
(6) calls on both the provincial Departments of Education and Public Works, Road and Transport to take leadership to regulate the issue of scholar transport in the province to stop the spate of accidents which are leading to the death of our learners.
Motion agreed to in accordance with section 65 of the Constitution.
DOON HEIGHTS PRIMARY SCHOOL NEAR COLLAPSE
(Draft Resolution)
Mr T J BRAUTESETH: House Chairperson, I move without notice:
That the Council—
(1) notes with great concern the continual degradation of infrastructure at Doon Heights Primary School in the
coastal town of Amanzimtoti in the eThekwini Metro in KwaZulu-Natal;
(2) also notes that this school is in a serious state of disrepair to the point where crumbling upper landings and railings at the school now pose a significant threat to the life and limb of the learners, teachers and staff;
(3) further notes that requests by the school for remedial action have been ongoing since 2013 with no resolution;
(4) notes that the chances of a catastrophic structural failure such as the Hoerskool Driehoek tragedy in 2019 is imminent;
(5) further notes that the problems at the school are well known to the department and culminated in an agreement on the scope of work on 25 February 2022. Despite this agreement, work has not commenced almost one year later;
(6) finally, notes that during an oversight visit to the school, I was informed that the approval for the
project was at an advanced stage, but that a tender had not yet been awarded;
(7) takes this opportunity to call on the new Minister of Public Works to advise on the status and progress of this project and calls on the Minister to act without delay to avoid a tragedy being visited on this community.
Motion agreed to in accordance with section 65 of the Constitution.
GAUTENG RESIDENTS PREJUDICED FOR E-TOLLS
(Draft Resolution)
Mr F NEL: House Chairperson, I move without notice:
That the Council –
(1) notes while the death of e-tolls has been announced, its ghost continues to haunt the Gauteng Province as the turning off of the gantries has not yet been gazetted;
(2) further notes that the financial model for the replacement of e-tolls has still not been finalized and Gauteng committed to debt for which it had no idea how to service;
(3) also notes that residents in Gauteng will be unfairly prejudiced in having to foot the bill for this unfair project over which we had no say and that service delivery in the province will suffer as a result of scarce funds having to be spent on the repayment of this vanity project;
(4) notes that we reject any new taxes or increases in current taxes or fees to fund e-tolls.
Motion agreed to in accordance with section 65 of the Constitution
TWO SUSPECTS ARRESTED FOR UNLAWFUL WITHDRAWALS OF SASSA BENEFICIRAIES’ MONEY
(Draft Resolution)
Ms A D MALEKA: House Chairperson, I move without notice:
That the Council –
(1) notes the arrest of two suspected loan sharks, who allegedly took their clients’ Sassa cards, in Mpumalanga, on Monday, 6 March 2023;
(2) also notes that the two suspects were nabbed after allegedly making numerous withdrawals at the ATMs with a number of Sassa cards, and were allegedly using the Sassa cards as a guarantee for clients who had borrowed money from them;
(3) further notes that about 35 Sassa cards as well as an undisclosed amount of cash were found, and the cash as well as the cards were confiscated for further investigation;
(4) notes that the two culprits face charges of contravention of Section 133 of the National Credit Act and are due in court;
(5) encourages community members who know of people who keep or use either Sassa or bank cards or IDs without
authorisation to immediately report this conduct to the authorities; and
(6) warns those who conduct their business in an illegal manner that they will be caught and will face the full might of the law without fear or favour.
Motion agreed to in accordance with section 65 of the Constitution.
The HOUSE CHAIRPERSON (Mr A J Nyambi): We will give you some time and take you through lessons on how to remove an old hand.
Ms M O MOKAUSE: Hey, do not talk to me like that. It is an old hand. If your people are incapable of assisting you there, do not blame me. I am more than trained to sit on that chair and run the Council properly.
23 MARCH MARKS WORLD WATER DAY
(Draft Resolution)
Mr E M MTHETHWA: House Chairperson, I move without notice:
That the Council –
(1) notes that 22 March marks World Water Day, which is a day that seeks to raise awareness about accelerating change to solve the global water and sanitation crisis;
(2) also notes World Water Day 2023, which is a day before the NCOP has its debate on Water Infrastructure Investment under the theme: “Building viable water Infrastructure for Sustainable and Reliable Water to Communities”, is focusing on accelerating change to solve the water and sanitation crisis through water infrastructure investment;
(3) acknowledges that poor water quality and drought as a result of global warming coupled with lack of investment in suitable water infrastructure undermines progress on all major global issues, from health to hunger, gender equality to jobs, education to industry and disasters to peace;
(4) we recall that in 2050, the world commits to sustainable development goals, SDG6, as part of the
Agenda 2030 and we promise that everyone will have safe water and sanitation by 2030 and;
(5) calls on the Department of Water and Sanitation and the various water boards and municipalities to intensify their investments in water and sanitation infrastructure and work four times faster to meet SDG
6 on time.
Motion agreed to in accordance with section 65 of the Constitution.
URGENT INTERVENTION REQUIRED IN BARKLY-WEST
(Draft Resolution)
Ms D C CHRISTIANS: House Chairperson, I move without notice:
That the Council –
(1) notes the dire situation in Barkly-West, where poor water and waste management by the Dikgatlong Municipality has led to a concerning degradation of the town;
(2) also notes that inconsistent garbage collection has caused businesses to dispose of waste on the streets, which poses a health and safety threat to the community, especially children. The sewage backlog is also significant, with businesses and residents reporting that their complaints go unheard, leaving them to deal with the waste themselves;
(3) further notes that while both honey-suckers are operational, the backlog for the drainage of sewage is huge. Businesses have reported giving up on laying complaints regarding sewage flowing behind their premises because the municipality simply does not get to all the work. Tragically community members have reported that despite having paid upfront for the drainage of sewer at their homes the municipality just does not pitch up;
(4) notes the water shortages in the town have been blamed on load shedding, but it has been revealed that the generator procured for the water supply was delivered below specification and has broken down due to its low capacity. With only three water provision trucks for the vast distances in the municipality, some residents
have gone without water for up to three weeks at a time, resulting in some having to collect water from the Vaal River;
(5) also notes the situation in Barkly-West is untenable and urgent action is required to prevent further degradation of the town.
(6) Therefore, calls upon this House to request the Minister of Water and Sanitation to intervene in the operations of the municipality and urgently address the waste management and sewage backlog, and provide a sustainable solution to the water shortage crisis. The residents of Barkly-West deserve a clean and safe environment to live and work in, and it is the responsibility of the municipality to ensure that this is achieved.
Motion agreed to in accordance with section 65 of the Constitution.
MULTIMILLION TENDER UNFAIRLY AWARDED FOR MANENBERG SCHOOL OF SKILLS
(Draft Resolution)
Mr K M MMOEIEMANG: House Chairperson, I move without notice
That the House –
(1) notes victory for the Constitution, Rule of law and good governance loving people of South Africa when the Western Cape Department of Infrastructure suffered a major blow in the Western Cape High Court when the judge set aside the DA led government’s decision to award construction company H&I Enginnering (Pty) Ltd a multimillion rand tender for the construction of the new Manenberg Schools of Skills;
(2) further notes that according to court papers Fury Point scored more points and was also lower in courts than H&I but the department decided to pass over their bid and accepted their bid more expensive than that of H&I;
(3) also notes that the court found that the decision to pass over Fury Point was procedurally unfair based on incorrect facts, inconsistent with the threshold
requirements of the Constitution and arrived at using big and uncertain criteria;
(4) further notes that the court noted the passing over of a black qualifying company an award to a white established company was contrary to the provisions of the Preferential Procurement Policy Framework Act that the court on the basis of the above declared the decision of the DA led government invalid and accordingly reviewed and set aside and;
(5) the DA led government must take responsibility for the delay in the project and the fruitless and wasteful expenditure.
Motion objected to.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon delegates, before we proceed to the subject for the debate, I would like to take this opportunity to welcome and congratulate the new Minister of Co-operative Governance and Traditional Affairs who is in the House. I also welcome the Minister of Small Business Development who is on the virtual platform, MECs, Salga
representatives, permanent and special delegates to the House. We shall now proceed to the debate.
DEBATE ON INTERPROVINCIAL RED TAPE REDUCTION: TRANSFORMING THE SERVICE DELIVERY VALUE CHAIN FOR FASTER GROWTH AND DEVELOPMENT
Mr T S C DODOVU: Thank you very much hon Chairperson of the session, hon Jomo Nyambi; the Minister of Small Business Development, Stella Ndabeni-Abrahams; the Minister of Co- operative Governance and Traditional Affairs, Cogta, hon Thembi Nkadimeng; the Deputy Minister, Chief Phatekile Holomisa; the Chief Whip of the NCOP; permanent and special delegates including the members of the executive council, MEC; the representatives of Salga and ladies and gentlemen.
Yesterday it was 15 March, the day that William Shakespeare in his seminal book Julius Caesar, call the ides of March. As we came to understand it, one soothsayer had forewarned and cautioned Julius Caesar to beware of ides of March shortly before the Roman Empire was murdered in the senate by what was called the conspirators. Eight years ago on one Sunday, 15 March 2015, as South Africans we woke up with our hearts heavy in the morning because the Minister in the Presidency, hon
Collins Chabane, and his two drivers had departed from our mist after their vehicle collided in a very gruesome accident.
Today as we engage in this important debate on the interprovincial red tape reduction to transform the service delivery value chain for faster growth and development, we remember hon Collins Chabane affectionately known as “the animal” As our Minister in the Presidency and later of Public Service and Administration this topic was very close to Minister Chabane’s heart especially the transformation of the Public Service. Without drawing any similarities, hon Chair, between how Julius Caesar was murdered and the fatal accident of hon Chabane on the same date of 15 March, the ides of March, a bad omen on this spooky prophecy always run through my mind on this superstitious day.
However, as we remember hon Chabane specially as he always led us with a powerful song that: Inzima le ndlela inameva (The road is tough it has thorns) We must once more salute him as a freedom fighter who led by example and who has left us a legacy of a true meaning of revolutionary courage, humor and modesty as we battle with the challenges facing our country.
Indeed, as we grapple with these challenges of the hour like to reduce the interprovincial red tapes in the Public Service
and in service delivery value chain, we must do so because we owe a special debt of gratitude to Collins Chabane and many others for their humble contributions in bringing about freedom and justice in our land and for transforming our country to be on the path of political freedom, economic prosperity and social justice.
Hon Chairperson, during 2006 our government under President Thabo Mbeki, adopted a programme called the Accelerated and Shared Growth Initiative for South Africa, popularly known as the AsgiSA, as one of the concretes to reduce interprovincial red tape in service delivery value chain and to put our country back on the path of growth and development. According to the AsgiSA then, in order to address the triple challenges of poverty, unemployment and equality in our land, South Africa needed a sustainable growth of around 6% per annum.
However, it acknowledged that this was impeded by what was called the binding constraints.
From the growth diagnostic analysis made at the time the AsgiSA document identify six binding constraints which needed serious attention and they were the following: One, volatility and level of the red currency; two, the cost efficiency and capacity of the national logistic system; three, the shortage
of suitable skilled labour amplified by the impact of apartheid spatial patterns on the course of labour; four, barriers to entry limits competition and limited new investment opportunities; five, regulatory environment and the burden on small and medium businesses; and lastly, deficiency in state organisation capacity and leadership.
Hon Chairperson, countering this binding constraints, AsgiSA called for a series of decisive interventions which encapsulated infrastructure programmes; sector investment and industrial strategies; skills and education initiatives; second economy interventions; macroeconomic issues, as well as addressing public administration issues. With regard to small, medium and micro enterprises the small, medium and micro enterprises, SMMEs, we have all come to know that they have an important role to play in the economy. In fact, they are key drivers of economic growth, innovation and job creation.
To this end in 2014, the government created a new Ministry of Small Business Development in order to tackle this particular challenges. This Ministry was established to facilitate the promotion and development of small businesses in order for them to contribute significantly to the national GDP and to tackle the country’s alarming high national unemployment rate
of about 30%. I argue that this will remain a pipe dream if not a pie in the sky if the action plan that we develop do not support businesses and increase their financial and nonfinancial support.
It will remain a pipe dream if it doesn’t create a demand for the product and services of this small, medium and micro enterprises they provide and it will remain a pipe dream if it doesn’t reduce the regulatory constraints for the small, medium and micro enterprises. I also argue that if the institutions established to support ... [Inaudible.] ... development like the Small Enterprise Development Agency, Seda, do not come down to their ivory towers to concretely and practically support them the vision to create a truly nonracial, nonsexist and prosperous country will not be achieved.
Hon Chairperson, the members of the mayoral committees, MMCs, lack access to finance and credit. They lack access to physical infrastructure which impede their business growth and increases their cost to doing business. They have low levels of research and development which deny them to innovate and our labor laws as well are a significant regulatory obstacle to their own growth. Not only that, Chairperson, sectors of
our society especially the disabled, the youth and women are affected quite tremendously. Crime and gender-based violence respectively are also affecting these sectors of our communities.
These are invasive problems in my view which do not only increase their security spending but they also have rippling effects on their costs of running their own businesses and this must be attended to. To compound the above problems, there are certain weaknesses in the way government is organised and the capacity of key institutions to deliver these particular services it is a problem that needs attention for the small, medium and micro enterprises for still to thrive. These problem are also exacerbated by insufficiently decisive leadership in policy development and implementation and all of this impede the country’s growth, development and prosperity.
Hon Chairperson, given the above scenario that I have just painted, it is quite evident that red tape in government is a big impediment to the growth and development of small, medium and micro enterprises. It is a bottleneck, it is frustrating, it delays development, it is costly and it is hazardous and therefore it needs to be dealt with accordingly. Not only
that, I also argue that red tape provokes slower decision- making. It hinders innovation because of bottling things down. Major projects cannot be explored because of too much red tape. They cannot happen very quickly because too many parties are involved in decision-making. This is compounded by the fact that things are getting slow in terms of signing off.
This is because of procedure, regulations and it is because of red tape.
We cannot go on like that, hon Chairperson. In order to succeed and transform our country and set it on the path of growth development and prosperity, we need to reduce the amount of red tape that we see today. Thomas Sankara, the late President of Burkina Faso, asserted that we need courage and madness to get things done. Thomas Sankara said, and I quote: “We must dare to invent the future.” Besides, it took the mad man of yesterday for us to be able to envy his dream clarity today. I want to be one of those mad men. I have also stated that this afternoon to say, I want to be a mad man that tackles red tape because red tape hinders development.
However, Sankara continued and he said: You cannot carry out fundamental change without a certain amount of madness. As I have indicated, in this case it comes from nonconformity, the
courage to turn your back on the own formulas and the courage to invent the future. In my respective view this is how you deal with red tape within the system in order to accelerate growth and development. You cannot invest in the future with the amount of red tape you have today. Red tape is an albatross specially for the young people who want to innovate their future.
Hon Chairperson, as I conclude, I want to reiterate that it is important and it is possible to reduce red tape and simplify regulations in order to unlock small, medium and micro enterprises opportunities. As Members of Parliament we have a critical role to play in reducing red tape within government because we are traditionally entrusted with the responsibilities of making laws and of performing oversight functions on all actions and decisions of the executive. We need to strengthen our role in this regard. Overseeing executive actions can be a vital role that we play as Members of Parliament to help to enforce accountability, transparency and to promptly detect and prevent the abuse of power by the executive especially when it is caused by red tape.
In my respective view, if we play our oversight role meaningfully we can help Parliament, and this Parliament, to
hold government answerable for how taxpayers’ money is spent. We can make the operations of government quite effective and transparent. In that sense it can indelible contribute in increasing public trust in its government. I argue, as I conclude, that when the executive fails to meet any of the standard that I have highlighted about, we can do so especially when it comes to red tape we can reduce it. If our role as Parliament through our oversight function that we hold executive accountable ensure that all of these standards are met.
This can be achieved by creating mechanisms to ensure that we realise these particular objectives. It is as I conclude that it is critical to do all of these things to ensure that in honor of Collins “the animal” Chabane indeed our country move forward and be transformed to an extent that service delivery value chain is optimised in order to achieve higher levels of growth and development in our society. This topic is extremely important as we advance our course to ensure that those particular objectives are realised. In this I hope that this will help us to understand and move processes forward and do whatever it takes and whatever within our means to ensure that we deal with red tape and have achieved the developmental objectives of our society. Thank you very much, hon Chair.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Dodovu. The next speaker is hon Londt. You can put it down, yes.
Mr J J LONDT: Thank you, hon House ... [Interjections.] ...
The HOUSE CHAIRPERSON (Mr A J Nyambi): ... order! Order! Hon Mathevula, order! Order, hon members. Let us allow hon Londt to present his speech.
Mr J J LONDT: Hon House Chairperson, hon Dodovu, I see we have at least one Minister that has hon Minister that faint some interest further down the speakers list which is an improvement on some of the previous debates, hon members, and I see we have one of our former National Council of Provinces, NCOP, member who is an MEC coming after me. Hon Dodovu you said about four or five times as you conclude. So I think next time we should be given shorter time and you would make a little bit more sense because you know what, the red tape is not the number one hindrance of job creation in South Africa. The number one hindrance in job creation in South Africa is your party. You coming from the North West that is the most clear cut example of how failed democracies work when you elect the incompetent cadres into position of power.
However, let me get to some statistics, about a fortnight ago, Statistics SA’s Quarterly Labour Force Survey gave a clear and unambiguous endorsement of the DA policy towards job creation. Across the eight other provinces in South Africa, run by bloated bureaucracies under the ANC-led government, 1% of the new jobs were created in the 4th quarter of 2022.
Compare this to a single province where the DA governs, there is a clear understanding that elected public representatives should create an enabling environment for businesses to flourish and ensure that taxpayers money is directed back towards the greater good of the citizens. This then is reflected in the job numbers where a 167 000 new jobs opportunities were created in this province in the last three months of 2022.
The Western Cape government established, within the Department of Economic Development a Red Tape Reduction Unit. I quote directly, “Linked to an enabling environment is the concept of ease of doing business”. The World Bank defines an ease of doing business, as the extent to which the regulatory environment is conducive to the starting and operation of a local firm. Entrepreneurs depend on a conducive environment that aids their success, but that is simply not the case in
South Africa, where we are ranked 40th out of 51 countries in the 2022 Global Entrepreneurship Monitor’s, National Entrepreneurship Context Index which assesses entrepreneurship conditions.
The success of the DA-led governments is in spite of the multitude of obstacles that is directly attributed to the ANC- led national government such as ongoing high-stage load shedding we are facing. It is the dysfunctional SA Police Service that allows criminality to flourish in this country, and inflexible labour legislation. In spite of all of that directly linked to the national ANC-led government, we still achieved that success in the Western Cape. This follows on directly from the pandemic that brought the entire world to a halt, not just South Africa. So, I wish this ANC-led government would stop blaming covid for your inadequacies and your failure to get the economy going. The entire world faced the same obstacles. You know what the difference is; the rest of the world and the Western Cape get competent people to lead and turn around and the change that is needed to overcome the obstacles.
In March 2021 the premier of the Western Cape approved the Economic Recovery Plan, with a key component being what this
debate is about today that of creating an enabling environment for businesses to thrive, operate, retain revenue and create jobs via the Red Tape Reduction Unit.
The helpline that was also established to support businesses is a success because, instead of trying to work in isolation, there is a collaborative approach aimed towards removing the bottlenecks in the business environment. The task team working on this are pulled from both the province and here the metro that helps to identify and address the problems faced.
See my time is quite short I should have used the first and it is almost up. I used it on the hon Dodovu.
Since the inception of the helpline, over 9 000 cases received assistance with a positive resolution rate of well over 80%.
You the ANC, created this mess because you have put your self- interest ahead of the best of South Africa. Contrast that with the province and municipalities it is assessed – apologies House Chairperson - with the Red Tape Reduction Unit that has conducted impact assessments, the interventions has generated savings and benefits of amounting to just over R1 billion, between 2015 and 2019.
Now imagine for one moment, we can get colleagues from across the floor to work together with competent people from the private sector, not to get a bribe or a tender, but to make this country work and realise that if we all work together this country can reach its full potential. We are facing an uncertain future in this country. A situation that was entirely created by the governing party nationally over the last few terms. We do however, have the potential to turn it around.
I am however afraid that the cancer of corruption is unfortunately part of the ANC DNA, but also part of the DNA of your red offspring. So, the only way to ensure that there is a sustainable future in this country is to get rid of the ANC nationally make sure that your red offspring does not get near any of the coffers and ensure that there is a competent government in charge of running this country. I thank you.
Ms T MOTARA (Gauteng): Thank you very much, hon Nyambi, to the Chief Whip of Council, hon Mohai, the Minister of Small Business, the Minister of Co-operative Governance and Traditional Affairs, members of executive council, MECs, from various provinces, permanent and special delegates to the NCOP, the SA Local Government Association, Salga,
representative, ladies and gentlemen. I greet you all from the Province of Gauteng, the province where it all starts.
The province which on its own contributes 34% to the national Gross Domestic Product, GDP, the province that holds almost all head offices of corporate South Africa, most of the country’s embassies, consulates and foreign missions, the province which is the economic heartbeat of our country.
Gauteng, the most populous province in the country, yet, the smallest in the land space. It competes with some of the best developed cities and states across the world.
We have placed South Africa on the map, and continue to attract more investors daily. Three out of every five new jobs created over the past year, were created in Gauteng. This demonstrates that we still are destination of choice for both businesses, entrepreneurs and job seekers alike. Of course, all of these elements do not come without their own challenges and immense pressures, pressure on the government’s ability to provide adequate and quality services to our citizens, pressure on our public and economic infrastructure, and pressure on the public purse to cushion the most vulnerable in our society.
Having said that, we are resilient, we are determined and we are committed to provide these services regardless of a pressure we are under. We are committed to be responsive, forward thinking and futuristic in our approach, using the skills in our disposal. We are also finding new and innovative ways of ensuring that we keep our number one spot in the country and the region, of being the greatest contributor to the GDP amongst other top spots we enjoy.
Without be lingering the negative effects of red tape, let me highlight some of the responses we have received from business and citizens alike. Some of the criticisms includes the following: It takes too long for the government to make a decision, no one responds to emails and phone calls and that the government is indecisive. What have we done as the province? As an example, what used to take us as a province about two years to conclude an Environmental Impact
Assessment, EIA, now takes us 30 days. We do and continue to house some of the most innovative and effective methods and mechanisms to reduce red tape.
One of those is the Invest SA, of course, which is an initiative of the Department of Trade, Industry and Competition. It is housed in Gauteng, where we house all the
national departments, the provincial departments and some municipalities, to be able to effectively respond to business regulations and applications. This is the One-Stop Shop, and it is the mechanism that we use to be able to attract the investors, the businesses, grow our business and investment span, and blueprint across the province.
Of course, many of us do have some interaction with red tape, both as citizens as well as businesses. Furthermore, red tape can also be defined as nonessential procedures that forms licences and procedures that at the cost of dealing with government, not only for businesses but also for citizens. It takes away time from businesses, time from citizens, and time that we could best use in other responsibilities. Anything that is obsolete, redundant, wasteful or confusing, that diminishes the comparativeness of the province, that stands in the way of economic growth or job creation, or wastes taxpayers’ time and money.
House Chair, I am happy to hear that hon Londt misses me, but he fails to explain what has happened in Tshwane, the city that has been governed by the DA, and the failed DA coalition for more than a term. It has taken an exceptionally long period of time for the City of Tshwane to be able to approve
anything. They are our partner in one of our Special Economic Zones, SEZs, the Tshwane Automotive Special Economic Zone, TASEZ, where they committed to play an equal role as an equal partner in that Special Economic Zone.
That Special Economic Zone houses the Ford Production Fund for the bakkie which they export to the European market. Ford on its own contributes 1% to the national GDP. However, what did Tshwane do after it has been brought into the process of the Special Economic Zone, both as an equal player, equal partner and an equal beneficiary of the Special Economic Zone? They remained on their commitment to be able to provide us without services. What did the province do?
The province have had to step up and step in, to provide the much needed funding of the bulk service, which is a purpose and a process, as well the mandate that is not necessarily the province’s. Furthermore, had we not responded in a way that we did, we would have lost the investment of Ford motor vehicle company. We now have to seriously look into our relationship with the Municipality of Tshwane because, the DA-led municipality and its coalition partners, and I guess, the green party, is an offspring of the blue party, hon Londt, has failed to provide even the most basic services.
This has happened, not because there has not been adequate funding nor because there hasn’t been capable and qualified officials. It is simply because an animal such as the metro municipality, the head of government in our country, was just too complex and too difficult for you to be able to lead and lead it correctly. There are many types of red tapes which we are directly attempting to respond to. As the province, we are looking into emission procedure systems that are related to administrative management.
I have also demonstrated how we have been able to reduce what would have taken two years to approve to 30 days. You can count the 30 days if you like. We are further looking into the efficiencies and ineffectiveness in all both our entities and our provincial departments. Where there are legislative timeframes, we stick to those, but where timeframes are not legislative, we are looking at how we minimise those. An example of that is the payment of invoices within 30 days. We now have internal policies to pay invoices within 15 days.
Many of the entities under my stewardship in the province such as the Gambling Board and the Tourism Authority, now need that requirement of 15 days payment of 15 days of invoices. This initiative does not only support businesses, especially small
businesses and entrepreneurs, but it also ignites and it has been a method of reigniting the economy. This has been done post-Covid. So, I am not using Covid or even blaming anything on Covid, but even the things we were not able to do prior to Covid, we are now able to do, post-Covid.
We are looking at rules and regulations, and we are also looking at certain policies with unanticipated cost benefits, we are looking at overlap and duplication, and we are reducing those. We are also looking at insurmountable paperwork, we are looking at unnecessary and inflexible regulations like the processes, and we are looking at streamlining our systems across the departments and across agencies.
I would be amiss if I didn’t use this opportunity, Chairperson, to make a considerable plea to both Salga and the Minister of Co-operative Governance and Traditional Affairs, to really impress upon the municipalities that, processes, applications and approvals are taking an extremely unacceptable long period of time in our municipalities. They are not assisting us in attracting and keeping investors. We are doing all we can as the province, but the municipalities also need to come on board. In those municipalities where we lead as the ANC, are able to assist us.
However, where everybody uses the political football as an excuse not to do anything or to do everything, we are extremely frustrated. I think that the Minister of Co- operative Governance and Traditional Affairs will definitely be the one to assist us, and use the legislative tools at her disposal, to be able to bring the municipalities on board, whether it is the DA or their offspring, the green party.
We are hoping that the municipalities will work in a more efficient and effective way, the way they have been working when the ANC was leading them, especially in the metros. I thank you, Chair.
The CHIEF WHP OF THE NCOP: Real ... [Inaudible.] ... not self- praise that you have become in the DA.
The HOUSE CHAIRPESON (Mr A J Nyambi): Thank you, hon Chief whip, Ntate Mohai.
The MINISTER OF CO-OPERATIVE GOVERNANCE AND TRADITIONAL
AFFAIRS: Hon House Chair, let me greet the hon Minister Stella Ndabeni-Abrahams, the delegates here, members of the executive council, MECs, ladies and gentlemen, good afternoon. Let me take this opportunity first to thank the House for inviting me
and the department to engage on such an important topic on interprovincial red tape reduction. In the past decade local government has experienced a massive legislation regulating its functions. The question is whether the share volume style nature and scope of this updated reviewed legislative forum is facilitating or obstructing the achievement of local government mandate towards the development of the people but ultimately creating local economical developmental spaces. Are the laws not impeding ... [Inaudible.] ... key values of local government namely, that municipalities are best place to gauge community needs, but also to become sites of innovation and creativity through all this regulatory reforms, the administrative burden facing municipalities, therefore, unintendedly became excessive and incremental. While they might have been cogent rationale for each individual administrative requirement cumulatively they have prohibited and have a prohibitive impact on municipalities’ diversing the scarce resources from core service delivery mandates, but to compliance on issues of all the policies.
Currently, local government is moving on this cogent rationale by National Treasury. It was about circular number 84 and one does not minus the other, it becomes an additional requirement to be met by municipality. Whether it’s from ... [Inaudible.]
... level or a capacity development level, or an employment level, or a local government development agency area and also developmental areas of service delivery that creates the core mandate of municipalities. Well-performing municipalities, particularly big metros level eight, level seven and six do try to make an important contribution to the strong economy and job creation. Small and struggling municipalities remain at the level of even finding it difficult to attract the necessary skills and, therefore, divert all the funds that they need in closing that gaps.
Therefore, this contribute one, to poor business environment, but the quality to job losses, and this flies at the face of our Constitution with emphasises the responsibility of municipalities to be rather the ones which facilitate the growth and development of our local economies. Therefore, the national Department of Co-operative Governance and Traditional Affairs, Cogta, has a responsibility including provinces to ensure that municipalities play a major role in active steps to ensure a conducive business environment and at a local space, but also to expand the employment creation opportunities such as self-employment, entrepreneurship, trade and investment. Improving the performance, therefore, lies in the success factors where municipalities need to be able to
see beyond the boundaries of the ward or beyond the boundaries of their own municipal wards. Creation of regional economies were matters of business could also be promoted. For example, a municipality in the Limpopo called a Burgersfort, those who know the small town could also have a collaboration with Lydenburg, Thaba Chweu Local Municipality. They come from different provinces according to boundaries, but the value chain of business that tourists have created in the mining belt goes beyond the boundary of municipal demarcation.
Therefore, it needs them to be able to see and with that SA Local Government Association, Salga, is assisting in creating an economic band on behalf of Cogta for the two municipalities. Leadership must be prepared to move beyond what the rule and the book says, they must be as civil servant be committed as well to serving the public. We are at the coalface as you all know, but we also need to safeguard the favourable environment and create the service delivery that our people need. Therefore, our managers must understandably be focused on ensuring that municipalities abide by legislation, but they shouldn’t lack innovation contribution into ensuring that the rules, yes, are looked up, our financial audits are clean, but also we need to measure that with the development and delivery.
The MEC spoke about our approval processes, for example, of plans and business plans which take no less than eight months to approve in some municipalities, a house band and a business plan or a business complex plan to a period of about 24 to 36 months. This is outdated and inappropriate and it hinders development, and the MEC has seen that. What are we doing as ourselves as Cogta? I’m informed by the District Development Model is to ensure that one beside planning together, but we have also identified the key areas which are minimising or which are rather aimed to minimise the impact of red tapes in regulations, administrative, management processes and systems. One municipality had a challenge with a hawker system, instead of ensuring that the permits system is improved they remove hawkers, they take their food, and they destroy it to ensure that there’s cleanliness in town instead of innovatively employing people and also sweep the streets at night to ensure that there’s cleanliness, but there’s also an economic development. Therefore, you can streamline your procedure and the ... [Inaudible.] ... of the municipality by also ensuring that your service is oriented towards the administrative personnel and, therefore, reducing and key delivery issues.
Therefore, red tapes sometimes is created by our own rules and regulations which are not necessarily designed towards
development, but rather more specific and policy related instead of innovatively solving a problem. We are administratively create a rule of law which we are no longer then talk about the 30-day payment service which the MEC has elaborated into and it ensures that municipalities also deal with that. The guidelines which Cogta had done with regard to reducing the municipal red tape also in ensuring that we improve service delivery and support small businesses. I’m sure Minister Ndabeni will also talk about that, but time taken to identify official and communication channel by our businesses. We are currently on the table with the SA Social Security Agency, Sassa, and SA Revenue Service, Sars, to improve on registration of our indigent and reduce the registration process. The same old woman goes to register at Sassa for her own at the municipality where she or she resides she also register for an indigent. When we could be able to share such and then roll out free basic services faster to the very same one old person who qualifies into all of this government system. This will reduce billing, this will reduce queuing for electricity and water provision to our free basic services as guaranteed to our old generation. However, also then the indigent of municipalities will improve.
Therefore, the impact is also not only frustrating a customer or a business person or a resident, it needs to be able to ensure that it creates the numerous relatively ultimately excessive cost that are then reduced. The approval process and systems economically to ensure that we deal with the adoption of the regional strength in terms of planning, but also culminating into all what we would want our business locally to do. For example, our Municipal Infrastructure Support Agency, Misa, in short has developed infrastructure cost guidelines to streamline or and speed up all the procurement processes due with regard to water, housing and roads, particularly in the labour intensive sphere for our municipalities to be able to speed up.
We also have a programme now currently dealing with the support of our vendor system and a link of our vendor system to our Community Work Programme, CWP, programme to ensure that there are issues which could identify priority reforms for the year ahead. They include mechanisms to ensure that government departments also participate and streamline all their delivery towards all these programmes. Informal business support to ensure that the regulations in this country are also comply costly and made less difficult to comply with to ensure that they don’t prevent business companies into growing and
creating jobs, but rather assist them into accelerating and doing the same.
Hon House Chair, as I conclude, I won’t conclude many times, echoing a theme most of the Presidential addresses and budget speeches under administration President Ramaphosa committed to cutting red tape and business, and established a team where Misa has a seat into it and had gain acknowledge at local governments sphere that there are too many costly and complicated regulations that impact on the creation of businesses and job. Therefore, this team has identified in examples two that I have made on what makes the specific obstacles to investment and business growth. It will also ensure that the current initiatives or business processes are simplified supported by property registration at municipal level cross-border trades and also construction permits which needs to be reviewed and released faster. The detrimental goal of the dynamic private sector employing the skills and ... [Inaudible.] ... of all South Africans and business activities, which contribute significantly to investment into our business.
It is, therefore, recommended that if we are to initiate the reduction initiatives in our area and in our participation
with local business structures, we need to make sure that we are process aware and begin the journey of becoming more process mature organisation by adopting business process management approach which ensures that municipalities move up the ladder of service delivery excellence and they become more sophisticated at managing service delivery processes and also ensuring that the national and provincial government guide capacity support to municipalities includes training business process management and review all the national and provincial legislation, which negatively impact on small businesses and business environment. Thank you very much.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Minister. Hopefully, the Chairperson of the committee and your other colleagues will learn from you that when NCOP is in session is always a good thing to have those that are participating in the House. Thank you for that. The next speaker is hon Mvoko from the Eastern Cape, MEC for Finance, Economic Development, Environmental Affairs and Tourism. He’s on the virtual platform.
Mr M MVOKO (Eastern Cape): Chairperson, let me take this opportunity to appreciate that the time we have been given as the Eastern Cape to take part in today’s debate. It is a
necessary and needed debate to increase acceleration and impact of our service delivery programmes to our people.
The sequence of forms and procedures can really be time- consuming, costly and complicated for our customers, and this sometime leads to our services to benefitting the people they are intended for. I must emphasise though that not all regulation is Red Tape. Regulation is necessary and useful when it enables enterprise formation, growth and job creation.
The red-tape reduction is one of the strategic interventions that strive to realise administrative efficiencies. By-laws are essential in providing a regulatory environment that is attractive and boosts the confidence of businesses or investors in a spatial area of municipal jurisdiction.
The second intervention relates to a twofold regulatory review. One aspect of this is to promote the adoption of a regulatory framework that provides for the mutual coexistence of corporate, formal, and informal enterprises in the market.
Packaging of information on processes to follow, available demarcated or secured business zones for business location, special conditions and incentives attached to these is
essential to guiding investors to aspects befitting their areas of interest.
We should be aware that President Cyril Ramaphosa has established a Red Tape Reduction team that will work in reducing excessively complex rules, regulations, procedures, and processes that inhibited economic growth and job creation in key areas of the economy, and work with relevant role players across government, the private sector and community- based organizations.
The two departments, the Department of Trade, Industry, and Competition and the Department of Small Business Development are critical in the process as well as the participation of other key stakeholders. Role-players across government, the private sector, and community-based organisations are critical in addressing the red tape issue. To align with that, DEDEAT, working with municipalities, would play a critical role in realisation of the work of this team at a provincial level.
The Red Tape Reduction Team has identified a list of almost
100 potential red tape issues, which were reduced to three areas of high importance: These prioritised areas were:
Tourism travel permits; the mining and prospecting rights licensing system; and work permits and visa administration.
Other Red Tape issues impacting negatively to economic development, financial inclusion, job creation, to mention but few, include: Informal trading permits and licenses; cumbersome administrative requirements that create a perception of low confidence and sometimes frustration in accessing finance; and access to services -remote locations and locations of government service institutions.
In our engagement with business chambers and associations, they would raise to us challenges that constrain their members, which they say are unnecessary. These include: No proper database for SMMEs and informal businesses within respective municipal jurisdiction resulting in minimal to zero interaction between businesses and local government; medium of communication for informal traders/rural-based/township-based enterprises is a challenge; poor stakeholder engagement on by- laws that impact businesses, resulting in lack of awareness and sometimes noncompliance with municipal by-laws; language and cultural barriers; long and unacceptable turn-around time (e.g. zoning applications, approval of plans, etc.); and the process of issuing licenses is lengthy.
As the province, there are changes and areas for improvement that we are proposing, whilst awaiting formalisation of Red Reduction Guidelines and power to the Red Tape Reduction Task Team. These include that: Town planning must be responsive to community and business needs; private sector should be central in informing economic spatial transformation; broadband connectivity is key in the provision of systems and initiatives that seek to address red-tape issue; connectivity can also play an important role in addressing the issue of accessibility to services and information; awareness campaigns and public participation are very important; customer care should be embedded in the efforts of addressing red tape issues; poor customer care can hinder efforts to minimise the impact of red tape; clear and documented processes which include checklist, timeframes in enabling business related requirements; and understand and improve interdepartmental coordination to minimise and resolve interdepartmental or institutional blockages.
Lastly, hon Chair, it is our belief that red tape has negative impact on investment attraction. Eastern Cape Government, in partnership with the DTIC, has established a provincial InvestSA One-Stop Shop. The one-stop shop is critical in investment facilitation, provision of investment information,
fast tacking processes, and resolving bottlenecks and challenges faced by businesses in the province.
This facility is an attempt to reduce red tape for potential investors as well as supporting existing investor (post investment support). Key services at the One Stop shop include: Serving as an accessible entry point for investors in need of regulatory compliance with laws and/or regulations across all spheres of government; fast tracking regulator decision processes (registration, licensing, permitting, land allocation or property registration) by increasing transparency, clarifying regulations and improving the quality and timeframe of service; advice on various incentives (tax, land, training, special economic zones, etc.); participate in the regulatory reform/roadmap process of South Africa; and advise on preapproval services (market data, costs, incentives, project approval, etc.). The medium term plan is to have satellite one-stop shop services at other regions beyond the two metros.
Hon Chairperson, let me conclude by committing that we will strive to come up with practical innovative tools and resources to reduce red tape issues and challenges encountered by businesses. Effective and efficient business environment
is a key enabler for accelerated economic growth, job creation and poverty reduction. This has become more necessary than ever before as these businesses are struggling with energy crisis, impact of climate change with severe drought, floods, limited road network and or transport logistics. Thank you very much.
Ms M DLAMINI: Chairperson, the state has a responsibility at both provincial and municipal level, in particular of creating a conducive environment for small businesses to operate in.
The state also carries the responsibility of creating an enabling environment for businesses to grow. This can only be achieved through deliberate interventions made by the state to build capacity and removing unnecessary red tape. As the state ought to be developmental in its outlook with anti-corruption measures firmly in place so as to ensure economic growth and development. On state capacity, I would like to refer the House to the Economic Freedom Fighter’s clear and decisive non-negotiable cardinal pillar number three, which outlines the importance of building a state and government capacity which will lead to the abolishment of tenders.
Currently, the ruling party has weakened the state’s capacity to provide basic services to drive economic growth and
development so much so that all functions that a state should be performing are currently being performed by private sector and other corporations that often collude to suck from the state the little resources which it does not have. As a result, there currently exists a failure for municipalities to deliver even the most basic of services, which not only causes immense hardship for the residence of municipalities, but also detrimental effect on social and economic development.
Municipalities are the face of service delivery, the place where our people most often come into contact with our government. Therefore, the quality of municipal service delivery has a great impact on most people’s quality of life. It also has a big impact on businesses across South Africa, especially small businesses that are the most vulnerable to poor municipal service delivery and the load shedding crisis that we are currently facing. Yet, the quality of services provided to our people leaves little to be desired, owing to the contract and tender system adopted by the government which leaves private individuals, empowered and communities disempowered. Red tapes surrounding businesses also make it difficult for small businesses to succeed and grow, as it is characterised by a range of factors such as outdated or inappropriate policies, rules and regulations, insufficient
processes and systems, poor management and staff skills shortages.
The Department of Small Businesses also has failed at playing any meaningful role for small businesses, as small businesses have been left stranded without any governmental intervention as government money continues to be given to white-owned companies. Such failures can be attributed to the reliance on tenders which limits the capacity of the state to directly industrialise the country. In municipalities, service delivery provision has only been through competitive bidding a procurement method within government born out of the idea the behind competitive tendering suppliers are forced to give the taxpayer better value for their money.
Chairperson, this process has been the biggest reasons why municipalities underperform and has turned out to be the biggest scheme created. So, others can get rich by manipulating procurement processes. It has been a scheme which has only enriched few government officials, politicians and tenderpreneurs and it has generally stunt the creation of wealth and severely limited the government’s ability to deal effectively with poverty and deprivation. It has had the biggest impact on infrastructure projects, and there currently
exists no substantial evidence to suggest that companies given responsibility to forester change through service delivery on behalf of municipalities, has worked, not anywhere in the country including the Eastern Cape. You might have great speeches, but your track record speaks less to be desired of. There also exist no meaningful monitoring or investigative systems to ensure that the supplier is credible and without ties to politicians or officials, and this has a negative impact and unnecessarily delays service delivery to the people.
The EFF, therefore, rejects any notion that even in the slightest suggestion that there is a need to expand how the current value chain system works should be given room for corruption and maladministration. And, although reducing unnecessary constraints on small businesses should be a key focus area for the government, it is corruption which remains a key obstacle to political and economic development.
Municipalities must have the capacity to perform the most basic functions internally. They must be equipped with the right human capital with necessary skills to handle the needs of the community. Municipalities must be capacitated with the correct technologies to keep up with the pace of the community
and must do this with proper public consultation so that community members know where to go when accountability needs to be reported on. An enabling environment for businesses can only be achieved through the development and implementation of policy regulations by municipalities. An enabling environment for businesses can only be achieved through ushering in of new leadership that is committed to growing the economy and improving service delivery and rooting out corruption. We, therefore, call on all South Africans to meet us on the picket lines on the 20th of March to demand economic and the resignation of Mr Ramaphosa. Thank you.
Ms N E NKOSI: Thank you, hon House Chair. The South African government has developed policies, laws and regulations that encourages open markets, innovation and a more competitive economy. However, some of the local business environments can discourage investors, both domestic and foreign, and stands in the way of innovation, growth and the potential creation of jobs. This is exacerbated by the unfavourable regulatory environment, high costs and risks of doing business in these localities.
While each of the three spheres of government have an overall responsibility to improve the regulatory environment for small
enterprises, municipalities in particular, have a leading role to play, in ensuring that the specific local business environments in their jurisdiction maximise on opportunities for shared economic growth and development. In the state of the nation address of last year, 2022, His Excellency, President Ramaphosa, remarked:
There are too many regulations in this country that are unduly complicated, costly and difficult to comply with. This prevents companies from growing and creating jobs. We are therefore working to improve the business environment for companies of all sizes through a dedicated capacity in the Presidency to reduce red tape. If we are to make progress in cutting unnecessary bureaucratic delays for businesses, we need dedicated capacity with the means to make changes.
In the same address, he announced the appointment of a red tape team that will identify priority reforms for the year ahead, including mechanisms to ensure that government departments pay suppliers within the required 30 days. The team will also work with other departments and agencies to unblock specific investment and business growth obstacles. It will support current initiatives to simplify processes
relating to property registration, cross-border trade and construction permits.
The municipalities are at the coal face of service delivery, where citizens, most often, come into contact with the government. The quality of municipal service delivery greatly impacts on most people’s quality of life, and it also has a big impact on businesses across South Africa. But it is small business that is most vulnerable to poor municipal service delivery and red tape because, small businesses have less staff, administrative and financial resources to spend on dealing with red tape.
The municipal managers are understandably focused on ensuring their municipalities abide by all relevant legislation. Much of their attention and energy is focused on improving municipal financial audit results, not reducing red tape.
Furthermore, municipal managers need to realise that, it is possible to improve both audit ratings and reduce red tape by focusing on business process management and using supportive software tools which reduce the burden of compliance and improve customer service using existing staff resources.
The municipal managers need to provide the leadership commitment to reduce red tapes. Hon Chair, lengthy time frames for decision and service impacts on the economy because, they determine the period in which expenditure can be incurred, thus resulting in less productivity in the economy. It will be critical that government responds to this problem through developing various automation process in areas of less risk.
This will increase the economic activity, loss of trust in the municipality, lost business investments, reduced municipal revenue and rates base. Basic services are fundamental in creating an enhanced environment for economic development. The problem of the provision n of basic services such as electricity, water and sanitation and lack of inclusive spatial planning impact the mobility of the poor form conditions of poverty.
Poor economic growth, job creation, limited poverty reduction, lower municipal revenue and poor services impact the sustainability of local economic development. Unnecessary and high costs, cash flow impacts, job losses, business closures, impact the cost of living because high costs due to processes ultimately increase the cost of goods and services, thus impacting the local economy.
Resident care policy needs to be developed, and set of administrative procedures, systems and responsibilities that identifies all procedures to be followed when submitting and responding to service delivery complaints for all departments, including steps for escalating complaints if they are not dealt with to the satisfaction of residents or businesses. A government of the people enables the people to govern through public participatory processes.
These processes are critical to enable the people who experience the reality of the economy, and administrative processes get the opportunity to suggest ways to improve processes. The people’s involvement in the governance affairs should characterise a developmental local government. Our democratic government is embedded in constitutional principles, equity and justice.
The ability of the state to continuously learn and adapt is a key component of continuous improvement and the review cycles of policy should enable such interventions. Resident care centres should be established in locations that are visible and accessible to residents and businesses throughout the municipal area, and be staffed by well trained personnel.
Resident service and complaints resolution performance should
be monitored daily through putting in place a continuous monitoring system, and being subject to regular performance audits.
An e-government is a key priority of the ANC-led government to build the technological capacity to leverage technology to improve the capability of technology to reduce various red tape which impacts the state and the citizens and broader political economy. Mechanisms for residents and businesses should be put in place, to provide customer feedback. A senior management post responsible for service improvement should be created and filled within the strategic or corporate services department or the municipal manager’s office, or ideally, a Chief Business Process Officer post should be created.
Having the right person with the necessary technical expertise, knowledge and skills is important, to transform the service delivery value chain. The ANC has developed various policy reforms, and it is currently undertaking a macro configuration of the state, to ensure that the state is fit for purpose in responding to the challenges which confront our society.
The District Developmental Model, DDM, as an intergovernmental model, will enhance the ability of government to impart skills and develop skills in the three spheres of government. It will also contribute to sharing best practices which can improve regulation and address various red tape in the system. Lastly, the ANC will continue to respond to the challenges that are experienced by our people, working with the people and advancing their interests.
Ms B N SITHOLE-MOLOI (KwaZulu-Natal): Hon House Chair, hon members, Ministers present, MECs, permanent and special guests of the NCOP, all guests present, ladies and gentlemen, I think, I should appreciate the time given to me to present myself before the NCOP. I humble myself and I appreciate the time that has been given to me. I also wish to appreciate the fact that the Chair says that we must come physically. We will try by all means to come physically. I pledge that.
We want to commend the NCOP for facilitating the crucial debate on red tape reduction and the role of local government in economic growth and development. This debate compels us to pay attention to how, through the effective implementation of the District Development Model, DDM, we can advance policies that support local economic development and reduce the
impediments to investment attraction and growth, which often emanates from challenges presented by the regulatory burden on SMMEs.
This debate acknowledges that SMMEs are the backbone of accelerated inclusive economic growth and job creation. The centrality of SMMEs in the South African economy is underlined by the National Development Plan, which envisaged the SMMEs to generate more than 90% of new jobs by 2030. There is no doubt that the prevailing economic situation in South Africa is far from reaching that target.
It is thus important that municipalities themselves, which are the coalface of service delivery, are recalculated to eliminate red tape and to become engines of economic growth.
Addressing the Salga Council of Mayors in September 2022, His Excellency the President, Comrade Cyril Ramaphosa, correctly asserted that, and I quote: “The failure of local government has a direct and material impact on economic growth and jobs.” The President considered that challenges at local government level undermine the country’s social and economic development agenda.
In this regard, the national Department of Cogta has also singled out a vibrant local economy, where money circulates in the local economy as a central pillar of what we can call an ideal municipality. History and experience have shown that all spheres of government need to work in co-operation and in a potent manner through the new approach of the DDM, with a singular focus to support business and SSME development in municipalities. This also calls for a social compact with business and the civil society, to achieve sustainable economic development.
In 2021, research indicated that Gauteng province constitutes 31% of SMMEs in the country and is followed by KwaZulu-Natal with 16,3%. The Global Entrepreneurship Monitor shows that South Africa’s overall average score of entrepreneurship condition improved from 3,63 in 2019 to 4,1 in 2022. That has moved the country from the bottom five in 2019, and we ranked 40th out 51 countries in 2022.
Regulatory burdens for SMME development in our country include the cost of tax compliances, which is set to increase the cost of doing business. We are also aware that the delays in rezoning processes often forces business to operate irregular and also out of business. We have also seen how lengthy delays
increase the cost of development, sometimes resulting in planned investment or development being cancelled.
All spheres of government need to enforce the 30-day payment policy for suppliers to prevent a number of SMMEs from closing down. We welcome all efforts since the dawn of democracy by government, aimed at reducing red tape. The Sixth Admiration established the office of the Red Tape Reduction programme in the Presidency. Another key development has been the publication of the National Integrated Small Enterprise Development, NISED, Masterplan by the Department of Small Business Development. One of the pillars of the NISED Masterplan is red tape reduction, which can be achieved through policy and regulatory reform.
Amongst many well-known red tape issues affecting small business development in South Africa, as prioritised, are tourism, travel permits; which is particularly significant for a tourist destination like KwaZulu-Natal; mining and prospecting right licence systems, work permit and visa administration.
There is no doubt that we need improved co-ordination and collaboration between the Department of Small Business
Development, DSBD, the Department of Trade, Industry and Competition and the office of the Red Tape Reduction programme.
As Cogta, we carry the responsibility to provide leadership in enforcing DDMs and bringing together all government departments and the agencies to eliminate red tape in order to support local economic development. We commend work previously done by the DSBD through the Red Rape Reduction programme, where it works with a number of municipalities to roll out merges, to reduce regulatory burdens for small businesses.
The province of KwaZulu-Natal, through the Department of Economic Development and the Department of Environmental Affairs has also adopted a one-stop shop to improve the ease of doing business, support business development and attract investment.
The is no doubt that small enterprises are particularly vulnerable to poor service delivery and complex regulatory compliance. Lengthy periods involved in addressing infrastructure maintenance and service delivery disruptions contribute to business closure.
As Cogta, we will continue to support municipalities to review their policies, by-laws, regulations, to support SMME development. We are working closely with the municipalities to ensure that they spend the MIG, because delays in infrastructure delivery negatively affect business development.
In the aftermath of the global financial crisis of 2017 to 2019, the KwaZulu-Natal, Cabinet lekgotla held in September 2022 resolved to establish district development agencies, DDAs, to provide effective business facilitation and to reduce the regulatory burden.
In South Africa, development agencies bridge the gap between the public and the private sector, in terms of industrial and employment development. It was not until we saw these agencies playing a role as a competitive municipal entity that it emulated local economies and increased regional economic growth.
In 2022, Cabinet lekgotla tasked the department to review the district development agencies, as a mechanism to support local economic development and growth in the SMMEs. The review has proposed the amalgamation of district local economic
development, LED, units within the DDAs and expanding the mandate of the DDAs. There are concrete proposals on institutional arrangements, including the appointment of the board of the DDAs.
We also wish to report that the CEO Forum, which sat on 7 November 2022 agreed that KwaZulu-Natal Cogta should support the DDAs, to play a stronger role in the DDM by the co- ordination of the Economic Sectors, Employment, Infrastructure Development, which is the ESEID cluster, and strengthen their role in the one ... [Inaudible.] ...
Standardising the financial model of the DDAs by municipalities and provincial government should be adopted. We must also forge strong partnership and socials compacts with the business sector to drive growth.
As I conclude, I wish to say that, as KwaZulu-Natal, we are in support of ensuring that there is clear regulation that is transformed, to take out the red tape, for the betterment and growth of local economic development in our country. Thank you.
Afrikaans:
Mr S F DU TOIT: Agb Voorsitter, wat is nodig om die ekonomie te laat groei, werkskepping te stimuleer en te verseker dat klein en mediumgrootte besighede nie net op die been kom en oorleef nie, maar ook floreer? Hierdie is vrae wat eintlik heel eenvoudig beantwoord kan word, as die regering sy bril van onderdrukking, selektiewe hulpverlening en verknogtheid aan onbillike, onregverdige wetgewing, regulasie en hulpverlening wil stukkend trap.
English:
The FF Plus welcomes the fact that progress is being made in reducing so-called red tape that hinders SMMEs from entering the economy with ease. One very important issue however is that black economic empowerment has not been addressed. Even National Treasury noted that the cost of compliance with red tape, like obtaining black economic empowerment, BEE, certifications is a great hindrance for small companies.
People who are not of colour are being discriminated against. How ironic that, after 29 years, government calls a debate with the topic, red tape reduction.
Afrikaans:
Huidige regulerende en beperkende wetgewing en regulasies kniehalter entrepreneurs in Suid-Afrika. Entrepreneurskap het
die afgelope paar jaar wipplank gery en het inteendeel afgeneem, ten spyte daarvan dat dit die kern van die ekonomie behoort te wees. Entrepreneurs en kleinsake-besighede is verantwoordelik om op gelyke basis met innoverende idees, nuutskeppings en produktiwiteit aan die mikro-ekonomie in provinsies deel te neem.
Die regering bied egter nie dieselfde ondersteuning aan alle Suid-Afrikaners nie. Kleur speel steeds ’n rol. Kleur bepaal ongelukkig of jy mag tender of nie, of jy mag verkoop of nie, of jy mag werk of nie.
English:
Support given to small and medium enterprises during the Covid-19 period is a clear example of government’s one-sided approach and discriminative attitude. Unrealistic and restrictive labour laws in South Africa have a suffocating effect on job creation, especially when it comes to employing young people, and are extremely burdensome to small
businesses. Even hon Dodovu alluded to the fact earlier and he is from the governing party.
How many small businesses were destroyed by government’s imposed Covid-19 restrictions? How many lives and livelihoods
were wrecked, as a result of the unrealistic lockdown? How many dreams and futures were shattered? Focusing on red tape reduction as a topic for debate is opportunistic and misleading in a pre-election year.
Afrikaans:
U het die ekonomie die afgelope 29 jaar onderdruk, ingeperk en geplunder. Om nou witvoetjie te soek by die kiesers is te min, te laat.
Pogings om regulasies te verslap dat besighede die sektor makliker kan betree is goed. Die vraag is wat gedoen word aan amptenare wat nie die nodige trots en werksetiek aan die dag lê om kliënte en besighede met die nodige kundigheid te diens nie. Hulle is veronderstel is om te doen. ’n Groot hoeveeelheid van hulle is nie in staat nie.
Die staatsdiens staan ongelukkig daarvoor bekend dat die oorgrote meerderheid, nie noodwendig die mees bekwame en flukste persone is nie. Takt ontbreek in die meeste van die gevalle.
English:
The sense of entitlement is unfortunately a reality that the general public needs to face when engaging with most government structures. In short, even if red tape is reduced to the bare minimum, cadre deployment and quotas will keep on hindering service delivery for years to come.
Focusing on skills development and qualifying individuals, while they are in their positions, illustrates government’s failure to do appointments on the basis of qualification and skill. It is time to realise that South Africa must be put first, not political ideology.
In closing, the hon Mutara might not be informed or might be a stranger to the truth. I wish to educate her. The green party, as you call it, is no one’s offspring. We are a party with our own identity, and unlike the party you belong to, the ANC, we have values and serve the constituents with pride and honesty.
Afrikaans:
Laat Suid-Afrika toe om die ekonomie sonder politieke inmenging te laat groei. Suid-Afrika verdien beter!
Ms H S BOSHOFF: The one-eyed Caribbean parrot! Hon House Chair and all other protocol observed, in the South African context,
the words, “Red Tape”, are as dreaded as the word, “Corruption”. And why is this? Red tape is and has been the downfall of many an aspirant entrepreneur as they cannot on their small budget contend with the tiresome regulations. It is more of a disincentive than an incentive, particularly when employing fewer than 21 people, R1 in every R20 goes to red tape.
Unfortunately in this beautiful country of ours, we hear of the various commitments being made, by Ministers and even our President, on the cutting of red tape, but the implementation is lacking. It is lip service, year after year!
Hon Chair, if you have been wondering what Cyril Ramaphosa’s Red Tape Reduction task team has been doing since his announcement of this team during the 2022 State of the Nation Address, don’t wonder too much, as not much has transpired.
On 16 November 2022, the Red Tape Reduction Task Team met with Small Business Development for a brief on its progress. Sipho Nkosi, head of this task team, in no uncertain terms stated that the team has no permanent structure and needs administrative capacity. He furthermore stated that his team
currently did not have any powers and would see what could been done with these limited powers.
So, again, we see a team that is chowing away tax payers hard- earned money and nothing to show for it. At last year’s Investing in African Mining Indaba, the President again committed to cut the dreaded red tape. Hon Chair, has this happened? Most definitely no! This occurs as the mining sector is still faced with lengths of tape, and the only reference to red, is the red that they are seeing when applying for operating licences.
On 16 June 2022, the President, at his Youth Day address in Mthatha, again said and I quote, “The government is intensifying its investment drive and removing the red tape that holds back business growth and greater employment creation”.
Where are these business growths taking place that create greater employment? As stated earlier by my colleague, hon Londt, the only province that has seen a remarkable upward trend in growth is the Western Cape, which created 167 000 jobs out of the 169 000, as contained in the statistics of the fourth quarter of 2022. The question that begs to be
answered, hon members is: How is it possible for the Western Cape to create so many jobs? I will enlighten you: Red-tape reduction; and a conducive market for job creation.
It is a fact that the President and his government clearly need to fix the regulatory and administrative problems facing entrepreneurs, businesses, et cetera, as a matter of urgency. This government must stop appeasing the citizens through lip service and rather show them the results.
We see investors flooding out of South Africa as they have had enough of the draconian rules and regulations. Hon members and the broader public, over R100 billion in South African shares and bonds have been sold by international investors since the start of 2023.
Industries that are struggling with red tape are inter alia, tourism, with the issuing of travel permits, which to say the least, are cumbersome. The mining and prospecting rights are hindered by a lack of modern systems to administer the licences. Work permits and visa administration are a nightmare due to the inability of Home Affairs to process work permits quickly. This negatively impacts international firms’ ability to operate in South Africa and attract critical skills that
this country so desperately needs. SMMEs and the informal traders are the backbone of job creation, but alas, they also struggle with trading permits and licences.
We are furthermore aware that, Mr Nkosi, also indicated that letters were sent to the Premiers of each province to establish red-tape reduction units, to form part of the overall architecture to tackle red-tape reduction, RTR, more systemically. Unfortunately, we have not seen a report on how the provinces have addressed this, or whether the provinces have set up these units. Once again, the only province with these units, that I am aware of, is the Western Cape
In conclusion, hon House Chair, the President also said that if we are to make progress in cutting unnecessary bureaucratic delays for businesses, we need dedicated capacity with means to make changes. Unfortunately it would appear as if performance does not count for much in ANC circles as the public servants continue to enjoy the party’s patronage.
So please, Mr President and all involved, for the sake of this country and for the sake of economic growth: Would you ensure that the Red Tape Reduction Team is entrusted with the necessary tools and resources to bring about the necessary
reduction with these bureaucratic regulations? Thank you, House Chair.
Mr N M HADEBE: House Chairperson, hon members, last year the President announced that the government would be seeking to reduce red tape so that our country can be rid of the unnecessary bureaucracy that holds us back. One of the greatest threats stopping our country from attaining its priorities is the lack of co-ordination in government. With better co-ordination comes clarity and improved operational performance. Bureaucratic red tape stands in the way of this co-ordination. This affects not only different spheres of government but also the private sector, the informal sector, and citizens.
The service delivery value chain is particularly vulnerable to the impacts of poor coordination. Red tape results in ineffective and inefficient supply chain management processes and controls. This results in underexpenditure, which undermines service delivery and leads to irregular and wasteful expenditure and corruption. The issue of government departments failing to pay suppliers within 30 days must be addressed. Failure to do this has an extreme effect on small businesses as it impacts business cash flow, and
sustainability and results in unnecessary job losses and even liquidation and business closures.
The red tape problem is caused by having multiple supplier databases across government departments. By having insufficient staff capacity, with employees who do not have the appropriate skills and experience in supply chain management or knowledge of the tender process. This in turn leads to poorly designed tenders with inadequate specifications. The problem is deepened by political interference, a lack of departmental delivery plans and an excessive reliance on physical paperwork.
All of this results in poor-quality service delivery. Services then have to be reprovided at extra cost. To begin to reduce the impacts of red tape, staff with sufficient capacity must be put in place. Government must work with local universities and FET colleges to form partnerships to provide external assistance, to refine and improve tender specifications. It is also imperative that a unified supplier database is developed, audited and kept updated.
One of the greatest challenges South Africa is currently tasked with is effective and reliable basic service delivery
to all citizens. Red tape is an enormous barrier to this and all efforts for its reduction must be made. Thank you.
The MINISTER OF SMALL BUSINESS DEVELOPMENT: Good afternoon and thank hon Chairperson. Minister ... [Inaudible] ..., Deputy Minister Dipuo Peters, MECs, chairpersons and members of various select committees of the National Council of Provinces, director –generals present, ladies and gentlemen,
...
IsiXhosa:
... molweni [greetings]
English:
The first task of a revolutionary is to create or build before destroying. Anyone that focuses on destroying and not building is not a revolutionary. Our portfolio deals with development and financing of small, medium and micro-sized enterprises as well as co-operatives.
International experience proved that growth and jobs is most likely to come from small, medium and micro-sized enterprises, SMMEs. This is consistent with ...[Inaudible] ... in the National Development Plan, which suggests that some 85% of new
jobs and between 60% and 80% of new economic value as we move towards 2030, will come from small businesses. Hon members, to achieve this we need a paradigm shift in our approach to SMMEs and co-operatives and a massive step change in the scale of support we provide to the sector.
This is not just for government alone, but needs to activate the entire SMME support ecosystem. This is the focus of the National Integrated Small Enterprise Development Strategic Framework that we have developed. The National Integrated Small Enterprise Development, Nised plan calls for better co- ordination of financial and nonfinancial support for SMMEs and co-operatives. We are gearing up to play this role and forging partnerships with critical ecosystem cares. Our focus is on reducing barriers to entry, addressing market concentration, and co-creating markets for SMMEs and co-operatives in partnership with the private and higher education sector.
Here, we’ve entered into partnerships with a number of departments last ... [Inaudible] ...some organised bodies in our ecosystem.
We are scaling up business development support to small businesses through entrepreneurship training and mentoring, and through expanding our incubation programmes at Small
Enterprise Development Agency, Seda. We’re also working hard to increase financial support to small businesses and co- operatives through Small Business Finance Agency, Sefa and partnerships banks, including nonbank financial intermediaries. Both our microfinance and our credit guaranteed products are especially starting to show results. We could do more with increase in budget.
In all our work we’re especially focused on underserved SMMEs and co-operations in townships and rural areas, but also prioritise high growth start-ups and scale-ups that have the most potential to create jobs, the jobs that we must all support. All the support interventions we’re putting in place will be undermined, unless we have a more urgent and targeted strategy of red tape reduction. Hon members, red tape cuts across the whole of government and affects all enterprises regardless of size.
The compliance and administrative costs associated with certain regulations are growth constraining and create barriers to trade and investment. My colleagues from the provinces have clearly articulated this. All of this work needs to be coordinated, and there needs to be a point of escalation to the highest office in the land, where we as a
line department cannot resolve this issue. Therefore, the President appointed Mr Nkosi to lead the red tape reduction, to lead.
This includes initiatives like the National Doing Business Programme, driven in the Presidency and by the Department of Trade, Industry and Competition, DTIC. It focuses on improving the investment ... [Inaudible] ... within our country. Here the focus is on starting a business, paying taxes, registering property, construction permits and trading across borders.
This is critical if we are to take advantage of the opportunities of the African Continental Free Trade Area, one of the flagship programmes of Agenda 2063.
Government is also implementing the Sub-National Doing Business Programme through the National Treasury City Support Programme targeting metros and focusing on construction panels, registering property enforcing contracts and getting electricity. Hon members, our citizens are engines of growth and need to fire on all cylinders. Our own work as the department focuses on red tape for small, medium and micro- sized enterprises including co-operatives, and in regard to this I will focus on the five areas.
Firstly, we need to better understand the universe of regulations impacting negatively on SMMEs. This includes the Small Business Act of 1996, the Businesses Act of 1991, the Companies Act of 2008, labour registration including the Unemployment Insurance Fund, UIF, the Compensation Fund, Skills Levy, Broad-Based Black Economic Empowerment Act of 2003, the Public Procurement Act of 2007 and Preferential Procurement Framework amongst others. There are also provincial regulations around gambling, liquor, special planning and municipal ordinances, as well as numerous regulations that local government and my colleagues have spoken to. These include zoning, building regulations, informal trading bylaws, business licensing, and many others.
In this regard, we are undertaking a comprehensive study on regulatory impediments for SMMEs, of which I have been advised that it will be completed in the coming two weeks. This will give us the evidence base to prototype and develop an effective SMME red tape action plan, which will be driven by the department. We realise we cannot be everywhere. So we’ll focus on a few regulatory reforms, which have the quickest and deepest impact. One such priority we have already started working on is to integrate the registration and reporting requirements for SMMEs as part of a single point of access for
SA Revenue Service, Sars, the Companies and Intellectual Property Commission, CIPC and the Department of Employment and Labour.
The second one working with Mr Nkosi, we are working on establishing the red tape reduction capacity in all provinces. Here we build on the excellent work being done in KwaZulu- Natal and the Western Cape, where they clear processes and mechanisms for tracking complaints and resolutions. Gauteng has made great progress in accelerating approval processes for SMMEs, especially those in townships economies which have been historically underserved. Last year we undertook provincial roadshows and we have recently met with all provincial MECs responsible for economic development. We are now finalising memorandums of understanding, MOUs to look at how we can better collaborate to reduce the red tape, and ensure the best practice from lead provinces that can be shared across the country.
Hon Chair, the third area is to focus on local government. This is the most difficult area of work, given some of the challenges we experience in many of our municipalities, Tshwane a typical example. Here we are partnering with SA Local Government Association, Salga and Department of
Cooperative Governance and Traditional Affairs, Cogta, and looking at using the District Development Model, DDM one plans to prioritise the red tape reduction and administrative simplification work that needs to happen in local government. This includes accelerating building plan and zoning applications, simplifying the processes of SMME business registration, licenses and permits and ensuring municipal bylaws do not burden SMMEs and informal traders. We are piloting a dashboard so that we can better monitor the situation in municipalities and intervene when necessary.
The fourth area is the reviewal of legislations that will create synergy between different spheres of government in relation to business licensing. Currently, municipalities have their own systems and procedures, as well as core structures which have created barriers to doing business. The amended Business Act of 1991 will establish a common business licensing framework, license fee thresholds and will give regulation powers to the department to intervene in business licensing processes when necessary. The amendment will also provide for the establishment of intergovernmental structures on business regulation and business licensing. We are confident that the amendments will make way to Parliament in the second quarter of the new financial year.
Our final area of work concerns building capacity and capability of the department, that must lead and coordinate this work. We acknowledge that over the years we have not done enough and with the urgency required. We may have been slow to start, but we will be strong to finish what needs to be done. This is why through our new approved organogram we are filling in vacancies with capable individuals, whilst also strengthening accountability and performance management in this area of work. We are creating a one meant small business entity and we are building our digital platforms to improve access to our products and services. Our newly adopted partnership-based approach to our work and reaching out to all stakeholders, will help us ease the regulatory and administrative burden on small businesses.
Hon members, let me conclude by thanking the majority of unions that have signed the wage agreement and further appeal to all those that will or are embarking on protests, to do so responsibly and so they do not take us back to the July 2021 trauma, that saw our businesses being looted and destroyed to ashes. Businesses got severely affected whilst they were struggling to recover from COVID-19, and government had to redirect funds that were meant for other interventions to help provide relief to SMMEs that were adversely affected.
It is against this background that we do not encourage vandalism and destruction of properties. While we respect the right to protest, we must equally respect the rights of others to access services, which the small businesses are providing
Hon Chair, I as I’m about to leave the platform, let me call upon the hon members to be exemplary in terms of buying products directly from small businesses. It is the only way that they can thrive. We can do everything in terms of reducing the other measures, but if there’s no direct support wherein all hon members and the citizens of our country, put or invest their own monies, all of this will be rhetoric and will therefore fail. We owe it to the people that we serve to make sure that small businesses thrive, so that we can create the jobs that we’re talking about. Thank you so much hon Chair.
Ms D M BAARTMAN (Western Cape): Hon Chairperson ... [Interjections.]
The HOUSE CHAIRPERSON (Mr A J Nyambi): Order! Order! [Interjections.] order, members. Order, members. Let’s allow hon Baartman to the platform.
Ms D M BAARTMAN (Western Cape): Hon Chair, I am proud to be standing here on behalf of the Western Cape in our respective slot in the NCOP debate. Chairperson, the SA Reserve Bank estimate that the rolling blackouts of about six to 12 hours a day or stage three or six outages will trim about R204 million and R899 million respectively from the national economy daily in 2023.
PricewaterhouseCoopers has estimated that rolling blackouts eliminated 5% each points of SA GDP in 2022. Hope is expensive, Chairperson, and the Western Cape is determined to inspire hope for the people of our province and especially SMMEs with cutting unnecessary red tape also known as easy of doing business. The biggest red tape currently steering South Africa and the Western Cape in the face is the energy crisis. It was revealed in the latest quarterly labour force survey that 333 000 jobs were created in the Western Cape in the past year with 167 000 new jobs in the last quarter alone. Further, it was revealed in the last quarterly labour force survey, which showed the Western Cape is still has the lowest expanded unemployment rate in the country by 26,8%, which is 2,7% each points decrease in a margin of 12,6% points is better than Gauteng, the next best place in terms of unemployment.
Chairperson, I am going to focus on one of the four cross cutting enables within the economic development and Tourism Department given the emphasis of the province is currently giving towards and that is energy. And this requires a transversal provincial action plan.
The Premier’s Energy Council has been established to identify action solutions to the energy crisis. This include, directing and overseeing the implementation of the Western Cape government urgent action to relief both the immediate impacts of loadshedding and its medium to long term energy strategy.
The outcome of the energy council also informs the Premier’s Energy Digicon that were ensure that consistent consulted and the most up-to-date information on energy is effectively and regularly communicated to citizens, communities and businesses.
The Western Cape Minister of Finance recently announced R1,1 billion to be set aside over the 2023 Medium Term Expenditure Framework, MTEF, period to give effect to our
energy response in the province over the short medium and long term.
Chairperson, it should be noted that the Western Cape will be funding this R1,1 billion of its own money. This is the price of ... [Inaudible.] ...
Mr R BADENHORST: Point of order, please. Chair, point of order.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Who is calling point of order.
Mr R BADENHORST: It’s me, Chair.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Yes, hon Badenhorst.
Mr R BADENHORST: Thank you, Chair. My call for a point of order is under Rule 47.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Yes, continue.
Mr R BADENHORST: During a debate in council no delegate may converse allowed. As my colleague point out earlier there was a whining noise in the background, which sounded like somebody speech. There is another noise behind me at the moment, which interrupts me from concentrating on a very good speech made by
my colleague here. I am unable to concentrate on the excellent speech being made at the moment, Chair. Please, can you rule on that.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you, hon Badenhorst. Hon members, in terms of our Rule heckling is allowed but you can’t drown the speaker. Let’s allow the speaker to debate as were allowed and expected. Let us not drawn the speaker. Please, I am appealing. Sorry for that inconvenience, hon Baartman. Can you continue.
Ms D M BAARTMAN (Western Cape): Thank you Chair. As long as my time is protected.
The HOUSE CHAIRPERSON (Mr A J Nyambi): You are protected.
Ms D M BAARTMAN (Western Cape): Chair, R1,1 billion is separate to the R88 million we are making available through our Department of Local Government so that our municipalities can keep our water and sewage pumping. We will spend money on loadshedding impact reduction, R126 million, we will spend R25 million on the Green Economy ecosystem support,
R246 million on project preparations support, which should lead infrastructure, create generation and financial planning,
which should be R27 million, capacity to implement
R58 million, operational matters are R114 million, and ensuring the establishment of an energy reserve of R501 million.
Chair, there is no service delivery without energy. You cannot heat, you cannot charge, you cannot light. So, how are we going to provide power to our people. In terms of the loadshedding impact reduction we were focus on projects such as demands site management programme alternative energy support for SMMEs and emergency loadshedding impacts for approximately 100 000 people.
The green economy ecosystem support will focus on green economy, ecosystem support through the Department of Economic Development and Tourism. The project prepares support facility will focus on municipal put buying by helpful municipalities to procure from Independent Power Producers, IPPs, for project preparations facility, piloting renewable energy solutions in municipalities, specialist service providers exploring gas power and green hydrogen development.
In Saldanha Industrial Development Zone, IDZ, specifically regarding the green hydrogen development there is strong
market in developing green hydrogen hub in the particular area. This project already sees a memorandum of understanding, MoU, between the Northern Cape and Western Cape governments to collaborate and develop the West South African Development Community green hydrogen corridor.
Further major world bank study regarding the green banker field in Saldanha has been initiated by the National Climate Commission and the Industrial Development Zone, IDZ, has hosted the re-industrialisation of Saldanha Day as part of SA Green Hydrogen Summit, which was opened by the President and the Premier of the Western Cape collectively and Sasol and ArselorMettal SA has signed a joint development agreement to develop carbon capture technology to produce sustainable fuels and chemical as well as revitalising ArselorMettal to an operative steel plant in Saldanha Bay to produce an export green steel.
In terms of grid generation and financing planning, we will focus on grid and transmission infrastructure upgrade. We will focus on helping municipalities complete the Electricity Master Plan and for a Western Cape Integrated Development Plan. We will in our capacity to implement focus on co energy team internal resourcing additional capacity for water and
waste water loadshedding impacts an additional capacity for support and implementation. And our operational focus, it will include project for energy lighting and solar PV in particular for our Western Cape Education Department. These projects in its totality is R598 million with the additional R501 million set aside for our emergency energy reserve this brings to the total of R1,1 billion over the MTEF period particularly the municipal energy resilience programme which facilitate support and position municipalities for the implementation of energy infrastructure development for economic growth and energy affordability and aims to contribute towards the target of
500 megawatts of new generation capacity by 2025.
The municipal energy resilience finance already enables 13 foundational energy studies in eight municipalities. Further, the private sector enables component focus on facilitating energy investment for private sector business. Why do adoption are small scale embed generation roof top solar photovoltaic services and promotion of willing a municipal network.
Enabling infrastructure looked at the grid infrastructure upgrade requirements, including battery storage enabling systems looked at the pull buying facilities, funding and financing and demand and supply enablement for the strategic
development management component looked at the regulatory and legislative input as well as long term electricity planning and gas and green and hydrogen development.
The Department of Economic Development and Tourism also continued to drive the uptake of roof top solar PV in the province dividing 20 municipalities of sport and revise around its Special Service Group, SSG, willing and or utility scale energy matters.
And So, for 24 municipalities in the province allow private roof top PV connections to the grid with 19 of these allowing households and businesses to be compensated for feeding this back into the networks. Our previous work on the SSG and growing needs for alternative green loadshedding roof top PV system installations have increased substantially by
147 megawatts of registered roof top in the Western Cape in the first two quarters of 2022-23 financial year, which represent R2,4 billion worth of investment and around 368 jobs.
Further, we have directly supported 186 businesses and organisations on water and energy matters with over 10 000 downloads of our market intelligent reported in 2022 covering
energy services, utility scaling, renewable energy water and electric vehicles.
Chairperson, well I would have loved to have touch on the other work of the Western Cape which we are doing like exports and investment skills and entrepreneurship as well to the impact on the energy crisis on our province. The people of the Western Cape require our province to take urgent action. It requires us to look at how we are spending every single cent of the people’s money as best as possible on the people of the Western Cape. And because of this, Chair, let us just be clear from the Western Cape, we will publish every single cent of our energy expenses the same way we published every single cent of our COVID expenses.
Chairperson, the Western Cape is doing everything possible it can to become the first loadshedding free province in South Africa. But we cannot do it alone. We need every person, every business, every NGO, every institution, every NPO to work with us to become loadshedding free and is only through working together to be able to provide power to the people. If you are a hairdresser, if you are a butcher or baker, you cannot keep your shop open and if you cannot keep the streets lights open up and you cannot keep your robots working, if informal
traders cannot work, if your payments system cannot work, if you are unable to study for exams, if your patients are dying on the surgery table, then as a country you have failed, Chairperson. I thank you.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Thank you. [Interjections.]. I will now ... Hon Smit?
Mr C F B SMIT: Hon House Chair, I think it’s quite important to note that if we had to vote now in the House the DA will win by far because the EFF and the ANC together one even match the numbers. So, that shows who actually prioritise this debate today and take this very serious.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Even ... No. Order, members. Even the people on the virtual platform can participate when it comes to voting. I will now invite Cllr Ngubane, representative of the SA Local Government Association, Salga, on the virtual platform.
Cllr P N NGUBANE (SALGA): Chairperson of the National Council of Provinces, Deputy Chairperson of the NCOP, Ministers and Deputy Ministers, MECs, House Chairpersons, special delegates, colleagues, may I take this opportunity to greet you all who
are there on the virtual platform. As an association of all municipalities in South Africa, we believe that the call by His Excellency the President, Cyril Ramaphosa, to increase investment drive, reduce red tape, improve ease of doing business and reduce the cost of doing business can only be achieved with the full participation of the local government.
All investments that land in a municipal space and as such, municipalities are conduits towards achieving the national investment target of R1,2 trillion. An increase in investment, reduction in red tape and improvement in ease of doing business will contribute to an increase in economic productivity, boost investor confidence, lower unemployment and improve the country’s competitiveness.
The role of local government is to create a conducive environment for businesses to set up, operate and expand. It is therefore critical that municipalities play their role by cutting red tape and facilitating both potential and existing businesses in their municipal spaces. Municipalities ought to be at the forefront in dealing with nonessential procedures, forms, licenses, and regulations that add to the cost of dealing with the government.
The SA Local Government Association, Salga, welcomes the selection of a Red Tape Reduction Champion to head the task team in the Office of the Presidency. Red tape has been identified as one of the culprits negatively affecting the ability of businesses to compete in a global marketplace as a result of unnecessary costs and or delays; delaying the establishment of new businesses; and the sustainability and growth of existing enterprises. The SA Local Government Association is committed to contributing to assisting municipalities in their effort to address red tape.
We are happy to inform the House that Salga is part of the Department of Small Business Development-led Interprovincial Task Team on Red Tape Reduction/Ease of Doing Business. The Task team comprises members from the National Treasury, World Bank, the Department of Co-operative Governance and Traditional Affairs, CoGTA, the Department of Trade, Industry and Competition, provincial departments, and Small Business Initiative to name a few, and convenes quarterly meetings. The SA Local Government Association concluded its Ease of Doing Business Push and Pull Factors Study in 2022 and the absence of red tape and efficient service delivery were highlighted as some of the pull factors as businesses decide on investment destinations.
Red tape can be addressed by reducing the number of steps, and procedures, that are followed during investment approval. It can also be achieved by reducing the time taken to finalise a process within the investment approval process. Administrative simplification in municipal processes will go a long way in addressing red tape in municipalities.
As we embrace the post-COVID-19 new normal and the digital era, we believe that red tape can also be managed through the automation or digitisation of processes. Municipalities are encouraged to eliminate duplication and waste in municipal processes to facilitate quicker investment approval.
The SA Local Government Association applauds the efforts being made by the Department of Home Affairs to introduce a world- class e-Visa system, visa waivers for certain countries, and Remote Working Visa initiatives. It is our belief that these initiatives will go a long way to eliminate red tape that has been frustrating our potential and existing investors and facilitate foreign direct investment. The automation of the business registration by the Companies and Intellectual Property Commission is also commended and we hope that the same initiatives will be replicated in other government departments and all three spheres of government.
Red tape reduction can be used as a strategy to attract investment and retain businesses. Awareness raising is needed for all municipal officials to ensure that all officials understand the benefits of red tape reduction and the economic benefits of increased investments. Municipalities can also fast-track investor application processes by placing the investment approval under the mayor’s office for quicker turnaround times.
In cases where there are high levels of red tape and bureaucracy, businesses are likely to relocate to other municipalities or provinces and in worse situations disinvest from the country. As a country, we are still recovering from the effects of the COVID-19 pandemic, and the global economic meltdown and it is proving to be very difficult to attract new investors.
It is against this reality that the most plausible strategy is for municipalities to ensure that businesses in their areas of jurisdiction are supported, and their municipal-related challenges adequately addressed. We cannot afford to frustrate our investors because the consequences will be dire for the economy at large. We cannot afford job losses and compromised municipal financial sustainability through persistent poverty
in municipalities because of the massive company exodus from our municipalities.
Mr J J LONDT: House Chair, on a point of order: I wonder if the member from Salga is willing to take a question?
The HOUSE CHAIRPERSON (Mr A J Nyambi): Councillor Ngubane, are willing to take a question?
Cllr P N NGUBANE (SALGA): Gladly, I can take it, sir.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Are you ready?
Cllr P N NGUBANE (SALGA): Yes, sir.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Okay, you can ask, hon Londt.
Mr J J LONDT: Thank you. As the representative for Salga here and we are speaking about red tape, the councillor, in his opinion, is it because of the red tape that the President did not declare the dollars in his couch?
AN HON MEMBER: That’s irrelevant!
Cllr P N NGUBANE (SALGA): Well I think that is not part of this discussion and deliberations, sir, it is something for another meeting at another time if some people feel it is important, but for now it is not so important as we are dealing with this subject.
The HOUSE CHAIRPERSON (Mr A J Nyambi): You can continue with your speech, Cllr Ngubane.
Cllr P N NGUBANE (SALGA): I believe that as the President of the country receives pledges for the achievement of the investment target of R1,2 million, municipalities can contribute towards the actualisation of increased investment through creating a conducive environment for business by cutting red tape. The SA Local Government Association encourages municipalities to employ competent officials who would hand-hold and support investors to manoeuvre through the government bureaucracy. That was supposed to be our submission for today. ... [Inaudible.] ... the hon colleague, I will invite him at another level but I think that was not relevant for today’s business. I thank you.
Mr T J BRAUTESETH: Hon Chairperson, Ministers, members, and fellow South Africans, the topic today is very wide. My Afrikaans-speaking colleague, hon Londt, said to me ...
Afrikaans:
... dis so wyd soos die Here se genade.
English:
Or it’s as wide as the Lord’s mercy. There have been various speakers today like the hon Boshoff who spoke about the red tape and its effect on business. Others have spoken ... and spoken ... and spoken. There have been lots of Ministerial promises today. However, I would like to comment on the complete and utter mess this government has made of intergovernmental relations.
Colleagues, there is more ingenuity, foresight and scenario planning in a spaza shop than in this government, but that is an insult to spaza shops so I apologise to them. the problem at the heart of this issue is that the ANC is policy-rich but unfortunately implementation poor. Over the last two decades they have constructed a web of regulations partly to satisfy Stalinist fantasies and partly to try in vain ... the comrades from eating. So they have ended up tangled in a web and
working in silos. Not co-ordinating, not co-operating and certainly not developing. Gone are the principles of professional ethics and the effective use of resources.
Hon Londt, told us today that the DA government in the Western Cape has proven that this can be done. The Red Tape Unit in the Western Cape, the one that works, has achieved notable results. As hon Londt pointed out, 167 000 jobs, R1 billion saved and real solutions in problem departments such as public works, transport, tourism and agriculture.
My colleague in KwaZulu-Natal, hon Meyer, who sits in the Co- operative Governance and Traditional Committee there offered me a bit of advice for today’s speech, he said, Hon Tim, make it simple. Just tell them to pay on time. Pay on time.
Well, it is interesting that the Western Cape is the only province in the country that pays all suppliers within 30 days. So they got that right. Again colleagues, the problem with the ANC is they are policy-rich but implementation poor. One would say implementation is poverty-stricken.
Hon Dodovu agreed with us, you can’t get things done. The bottom line colleagues are that talk is cheap but actions are
priceless. Talk is cheap but actions take hard work. From hon Baartman’s speech, it is quite clear that the DA takes intergovernmental relations seriously and backs them up with action ... action ... action.
Unfortunately, the ANC does not. There has been a lot of muttering today from my EFF brothers and sisters, okay, but I will say this to them, get into government somewhere and we will compare notes, okay.
The bottom line folks, and I will end with this, the voters of South Africa are noticing the difference between the ANC governments and the DA governments, and the voters will serve notice on the ANC in 2024.
IsiZulu:
Siyabangena!
Mr K M MMOEIEMANG: Hon House Chairperson, hon members of this House, Minister of Co-operative Governance and Traditional Affairs, Minister of Small Businesses, excellences and distinguished guests, indeed there is a need to address legislation and regulatory processes that represent barriers as a result of red tape and the need to build an enabling
environment for businesses, especially small, medium and micro-sized enterprises, SMMEs for faster growth and development. In order to locate this theme hon House Chair, it is important to indicate that small, medium and micro-sized enterprises play a critical role in many economies, especially in the developing nations.
South Africa also regards SMMEs as an important area of driving inclusive growth and job creation. We have seen this through the establishment of the Department of Small Businesses which is indeed a testimony to ANC’s prioritisation of the importance of small, medium and micro enterprises in the economy. The World Bank predicts that small, medium and micro enterprises businesses contribute greatly to job creation and in economic development globally. Globally, 90% of businesses are SMMEs, and they account more than 50% of employment worldwide with SMMEs contributing up to 40% of national income in emerging economies.
It is further argued that these numbers are higher when informal SMMEs are included. The World Bank further estimates that 600 million jobs will be needed by 2030 to place the growing global workforce that is estimated. Indeed, this puts SMME development on top of the agenda for many developing
countries worldwide. This is because SMMEs account for a great number of jobs however challenges such as access to funding to mention but one, hinder the success of these businesses.
Finance is most cited as a challenge in both emerging and developing countries. In our country, the tedious and complex red tape is often cited as among the challenges.
South African context of SMMEs, small micro and medium enterprises accounts for about 50% to 60 % of the total labour force and contribute around 34% towards the Gross Domestic Product. Furthermore, according to a study conducted by the Department of Trade and Industry in 2005, small, micro and medium enterprises comprise about 90% of formalised businesses in South Africa.
The Youth Enterprise Development Strategy, Yeds, 2013-2023 of the Department of Trade and Industry suggests that though the contribution of SMMEs is significant in the South African context, limited and poor participation of young people in the economy remains a challenge. This is not good, as having youth not participating in the economy affects the country in many negative ways. Red tape is one of the most cited challenges for SMMEs. In South Africa, there is a need to disable an enabling environment for SMME growth and job creation. [Need
to enable.] In this regard, government should act as an enabler of business growth and prosperity through a progressive legislative and regulatory process that helps SMME growth.
It is important to understand that red tape occurs when government administrators misapply rules, regulations and procedural functions such that the outcomes are different from the ones intended, or it can also be understood as an occurring mismatch between the regulatory intention and administrative processes to implement procedures and regulations. I guess that the Western Cape High Court has just borne testimony to this assertion.
It is important to understand that there has been many interventions that were outlined by the Minister of Small Business Development in terms of ensuring that interventions are put in place to address and allay the red tapes. This also serves as a perfect initiative in co-ordinating the efforts of government, private sector and government financing agencies in helping SMMEs thrive. It is important to appreciate the fact that in providing leadership by the Minister Small Business Development, in terms of consolidating the provincial baseline, just to assist leadership to ensure that the challenges that are associated with the lack of strategy and
the lack of guidelines are indeed mapped out in such way that there is a clear strategy in terms of dealing with that. The Agencies under the department have created programmes for youth, rural communities, people with disabilities though there is more that can be done.
Hon House Chair, is important to appreciate the fact that many agencies work in silos while they serve the same constituency which is SMMEs. Therefore, District Development Model is one platform to ensure an enabling environment for SMMEs through co-ordinating the efforts agencies, and interventions by different government spheres for maximum impact.
Also it is important hon Chair, to appreciate that another critical element is to ensure that big business becomes a partner to SMMEs to have an inclusive business ecosystem which is redistributive for various economic players. We heard from the Minister when he outlined who are the role players in the ecosystem. Big businesses should be playing a partnership role to SMMEs, and the government should use regulatory and incentive interventions to encourage big corporations to buy locally produced goods and services. This can be in the form of supporting SMMEs and co-operatives, a regulatory or incentive method should be made to encourage big businesses to
invest locally and not leave communities behind. This is where proactive Local Economic Development (LEDs) needs to play their proactive role.
We need to also put in place stringent competition laws which regulate sectors to address market concentration which creates a barrier, as part of the red tape for small businesses.
Barriers to entry for SMMEs including high exist rates of SMMEs, for example, 40% of SMMEs do not survive their first year, 60% their second year and 90% their first 10 years after inception.
We appreciate the fact that SMMEs represent 95% of firms but only 24% of tax paying as opposed to the 5% large firms with 70% value by tax-paying. If the principle that government is the biggest procurer of goods and services is to be accepted it means government is directing most of its resources to large firms instead of SMMEs.
SMMEs formal sector contribute 38% to employment. The skewed structure therefore constrain employment creation which intensifies household inequalities. Big firms continue to swallow smaller growing firms through mergers and
acquisitions. We must address market concentration to create inclusive growth and increase the market share for SMMEs.
We therefore appreciate leadership role by the Competition Commission to amend the Competition Act which is quite critical in terms of addressing concentration and participation. But competition law alone cannot achieve the transformation of economic structure. Government levers impact economic structure and can be focused to address entrenched concentration such as legislation and regulations; licensing and procurement; investment incentives and support services; and technology development policies.
If you can ask the leader or the manager of the company that was discriminated against in terms of the red tape and ask who is the biggest red tape? He will say that it is the Western Cape Department of Infrastructure. The ANC believes that the national strategy for micro-enterprise must be developed such that it includes the development of a Microfinance Act to help a strong national guide to enable SMMEs, this strategy will need to be data-driven to the country navigate this complex sector.
Mrs C LABUSCHAGNE: Hon House Chairperson, on a point of order: I rise on a point of order of the rule that says that the speaker should not mislead the House. Through you Chair, I would like to know where the speaker verified these facts that he is producing here.
The HOUSE CHAIRPERSON (Mr A J Nyambi): It is a point of debate. Let us allow the debate to continue, hon Labuschagne.
Mr K M MMOEIEMANG: Thank you Chair, the District Development Model should be employed to empower SMMEs such that big businesses and government become partners and enablers to SMME growth, with big businesses being partners and government being partners and enablers. The ANC believes that infrastructure rollout, maintenance of the infrastructure should be done effectively and with speed to create an environment for SMMEs to thrive. Providing reliable electricity supply, roads and other economic infrastructure, including digital infrastructure, is critical.
It is important, hon Chair, to appreciate the fact that South Africa is not an anarchy state. She is governed by the Constitution. The Constitution of the country captures the values as the rule of law, as rationality and also
transparency. It is always important to ensure that in taking your decisions as an administrative body, facts must be able to guide your ultimate decision. Where you are found to be on the other side in terms of linking the conclusion and the process of facts, the court as an arbiter will always intervene and it is going to set aside your decision. It is important, in conclusion, to appreciate the fact that the through this judgement which is a public document, a reflection has to be made on how do you ensure that black contractors are not on the receiving side of big companies. It is important that we must be seen to be adhering to our supply chain management processes so that SMMEs are indeed guided and protected.
The SMMEs space is very important in driving inclusive economic growth and job creation, in the spirit of not leaving anyone behind, we need the government to create impactful and creative legislative and regulatory measures to enable the success of the SMMEs, it is also important for big businesses to also act as a partner to SMMEs through deliberate support in the efforts to grow our economy and create employment.
Therefore, hon House Chairperson, an ANC-led government will always be on the side of the Fully Point. Fully Point pinned his point to get justice and ensure that supply chain
management processes of this country are not abused. Thank you, hon House Chairperson.
Mr T S C DODOVU: Thank you very much hon Chair once more. I firstly want to rise to acknowledge and appreciate all the contributions made in this important debate. What is quite clear and fundamental is that this debate is very important and critical in the light of our own country.
The debate sends a very cogent message and the message is that we must all work together and coordinate our efforts in an interdisciplinary way to ensure that we reduce red tape within government, we reduce bottle necks, we become effective and efficient in what we do so that all the developmental objectives that we have placed especially those encapsulated in the National Development Plan, NDP, are realised.
I think this is a bottom line and I think the message is clear that we must work as a team, we must work in unison for the realisation of those particular objectives. Hon Chair, on the other hand, I understand that we are on the verge of an election year and some parties especially the DA does not play the ball but plays the man.
They spend a lot of time placing themselves doing what I call a breast beating bravado about their so called successes where they govern whereas the contrary can show that the DA itself has got its own limitations and problems and there is crisis in some of the municipalities in the Western Cape where they govern.
For me, I understand that they will do whatever it takes to attack the ANC, throw the mud at the ANC and they will criticize. Criticism is okay if it is self-criticism, if it is constructive criticism, it is okay because in itself it is empowering. But if you do it because you want to pounder into populism, if you do it because you want to score cheap political points, it is something else and I think as I indicated in the past, we will not sit back helpless and surrender, we will not fold our arms when people perpetuate issues that are untrue and perpetuate things that are incorrect.
Hon Chair, I will just make a typical example. I was in Johannesburg yesterday, there were sewer spillages, the water is running down the streets, some of the buildings are closed and it is where the DA was governing in the last seven years or so.
The situation is not as rosy as the try to project that they are an icon of good morality and judgement, that they are an icon of good service delivery in terms of doing what they are doing and their record is as clean as they purport it to be.
Johannesburg is a crisis and as we see it now, a coalition government that they led has collapsed and we have a new government that is trying to clean up the mess that the DA has created.
The situation is worse in Tshwane where they tried to subvert the electoral process by ensuring that they forced their own members who do not even agree with them that they give them numbers in order for them to vote and succumb vent a democratic process as we understand a secret ballot.
It is precisely because there were problems of red tape where they governed. The reports of the Auditor-General had shown that this government that was led by the DA has its own fundamental problems. They cannot come here and play to the gallery and make themselves smart as if they know everything. I do not agree with that hon Chair.
All that I am saying is that the issue on the table about the red tape is an important question that confronts the country, whether it is provincial government, national government, local government ... [Interjections.]
The HOUSE CHAIRPERSON (Mr A J Nyambi): As you conclude hon Doduvu.
Mr T S C DODOVU: If we work together, if all the departments work together, if the players come together in a form of District Development Model ... [Inaudible] ... in terms of alleviating the problem that we are facing.
Hon Chair, all that I am saying is ... [Interjections] ...
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Bara, order. Let us allow him to conclude.
Mr T S C DODOVU: As a country we must grapple with those issues; we must attend to them to the best interest of our own people, we must do it because once we do it, it can go a long way in terms of addressing the fundamental problem that our country is facing especially crime, unemployment, poverty and
inequality where people live. Working together we can go a long way in terms of realising that.
As the ANC, we agree that there are problems but we are doing something to address those particular problems especially when these problem are for the historically disadvantaged and vulnerable people.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Hon Dodovu, the time is up.
Mr T S C DODOVU: As I conclude I would like to say, thank you very much hon Chair for the debate ... [Inaudible.] ... in this particular debate. I agree with you about everything.
Thank you very much.
Mr J J LONDT: Hon House Chair, I do think that when you and other Chairs are in the front, you have the opportunity and the choice to tell people to come to the House and not have these hybrid sittings anymore. It is now obviously three to four years down the line and some of the members still do not know how to use the equipment.
The HOUSE CHAIRPERSON (Mr A J Nyambi): Order members! Hon Londt, you are unfair because when I was commending the Minister of Co-operative Governance and Traditional Affairs, I indicated that hopefully others can learn from what she did.
That is why when I was calling Bartman, I said he is in the House and we appreciate especially because they are not even our members but they are in House when we are debating. That is what we appreciate and it is making it become a seamless exercise for the debate. It is something that will be attended to. Hon members, thank you. That concludes the debate.
I wish to thank the Minister of Co-operative Governance and Traditional Affairs, Minister of Small Business Development, MECs, Salga representatives, all permanent and special delegates for availing themselves for this important debate.
On behalf of the leadership, we are led by Mr Masondo, Deputy Chair, Ms Lucas and the Chief Whip, Mr Mohai. As the National Council of Provinces, we are saying happy birthday to hon Bardenhost, have many happier years ahead. Hon delegates, that concludes the business of the day. The House is adjourned.
Debate concluded.
The Council adjourned at 17:13
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