ATC140716: Report of the Portfolio Committee on Small Business Development on its inception and establishment, dated 9 July 2014
Social Development
Report of the Portfolio Committee on Small
Business Development on its inception and establishment, dated 9 July 2014
The
Portfolio Committee on Small Business Development, having participated in the
consideration of the Annual Performance Plan and Budget of the Economic
Development Department and the Department of Trade and Industry for 2014/15 on
1 July 2014, reports as follows:
1. Introduction
The
Department of Small Business Development (DSBD
)is
a
new Department that has been announced and established by the President of the
Republic of South Africa after the formation of the new Administration,
following general national elections that were conducted on 7 May 2014. The
Department does not have a Budget Vote at the moment as its Programmes will migrate
from the Economic
DevelopmentDepartment
(EDD) and the
Department of Trade and
Industry(
DTI).Members of the
Committee are therefore likely to participate in the debates on the Budget
Votes of the Economic Development Department (Vote 28) and of Trade and
Industry (Vote 36).
2. Mandate of the Department
The
mandate of the Department of Small Business Development is to enhance support
to small business and cooperatives development, with emphasis on programmes
that will advance entrepreneurship amongst women, people with disabilities and
youth, to effectively contribute to job creation and economic growth. Support
mechanisms will include:
·
access to finance,
·
business skills development,
·
cooperatives skills
development,
·
market access,
·
competitiveness,
·
easing regulatory
environment,
·
advancing
localization,
·
leveraging on public
procurement,
·
enhancing coordination and
transversal agreements, and
·
facilitating
growth of SMMEs and cooperatives.
3. Legislation within which the Department will
operate
The
Department will draw authority from Small Business Development Act of 1980,
National Small Business Act of 1996 as amended in 2004, Companies Act of 2010, Cooperatives
Act of 2013, Industrial Development Cooperation Act of 1940, Broad Based Black Economic
Empowerment Act of 2003 as amended in 2013, National Empowerment Act of 1998,
Tax Incentive Act of 2013, Preferential Procurement Policy Framework Act of 2000,
National Youth Development Act of 2008, Women Cooperatives Development
Empowerment Strategy of 2012, Cooperatives Strategy of 2012,
Innovation and Technology Strategy and other
appropriate pieces of legislation which may have an impact on small
businessesand
cooperatives.
4. Primary and Secondary Mission of the
Department
The primary
mission of the Department is to enhance support of small and informal business
development as well as cooperatives through entrepreneurship, to foster
financial inclusion through creation of market access for small business and
cooperatives. The s
econdary mission of the Department is to advance localization leveraging
on public procurement while ensuring measurable accountability of State
institutions in support of small business.
5.
Small Business Development Business Streams
The
SBD business streams will be on:
·
research, policy
formulation, monitoring evaluation and intergovernmental relations;
·
innovation,
intellectual property and indigenous knowledge;
·
incubation
and technology programmes;
·
customised
interventions and programmes on enterprise development, cooperatives development
and national informal business upliftment support;
·
incentive programmes;
and
·
impactassessment
.
The
DSBD will also be playing a support function role within corporate services,
namely on administration, finance, information technology, human resources,
legal administration and in communication and marketing.
6.Key
milestones
of the Department
Key
milestones that were indicated are:
·
the configuration
of the Department;
·
the migration
of functions;
·
the
consolidation of policy measures;
·
the
development of transversal agreements; and
·
theestablishment
of the financial institutions.
(Timelines will be discussed in the workshop)
7.
Programmes
and Budget Allocation
It
was indicated that, although the Department has not yet been proclaimed,
programmes that will be transferred from the DTI are Broadening Participation
Division (BPD) and Incentives and Administration with a budget of R1billion for
2014/15 financial year. Programmes that will be transferred from the EDD
is
Small Enterprise Finance Agency (SEFA), so far without
any indication of the amount of budget allocation.
8. Challenges
The
Ministry raised challenges with regard to the non-proclamation of the
Department as it delays progress of meeting timelines, and dependency on the
departments which programmes for SBD should migrate from. It also creates a
challenge of processing the budget vote and transversal agreements.
9. Matters raised by the Members
of the Committee
While
deliberating on the Ministrys presentation, members of the Portfolio Committee
on Small Business Development raised the following matters with regard to the
presentation and the Department at large:
·
The name of the Department should
be looked into for it to include Cooperative because that will
placeemphasis
on cooperatives development and assistance;
·
A definition of sectors and
financial institutions should be clearly defined;
·
Policies should give emphasis to
programmes that are aimed at interventions, incubation, localisation, that are
able to be measured on job creation, that seek partnerships with the private
sector and that are enterprise friendly;
·
The Department should take full
functions of mentoring, capacity development and incubating
ofSMMEs
and cooperatives to ensure that they are not swallowed by big or foreign
businesses;
·
The Department should ensure that
black-owned cooperatives are strengthened and sustainable. By so doing, an
inclusive economy
wouldbe
enhanced;
·
The Department should consult
STATS SA to collect data on the number of existing SMMEs and cooperatives that
will assist in determining their impact. With transversal agreements, other
departments should not relinquish their functions of taking cooperatives into
consideration;
·
The Department should also
consider international best practices in the field of Small Business Development
and cooperatives.
10. Recommendations
Based
on matters raised by the Committee, and on the question that the Department has
not received a proclamation, it was recommended that:
·
a
strategic workshop of the Committee and the Department be conducted. This
strategic workshop will give members of the Committee an opportunity of
understanding the formation, mandate and programmes of the Department. Members
will also have an opportunity of expressing their views on the institutional
design.
·
atthe
workshop, the Ministry should come up with timeframes for milestones.
·
ofthe
R1billion budget for Broadening Participation Division, the Ministry should
clearly find out what percentage will be retained by the DTI and Industry for Broad-Based
Black Economic Empowerment.
11. Conclusion
After considering the presentation
of the Ministry, the Committee agreed that the matter of conducting a workshop
should be pursued and that members of the Committee will participate in the
Budget Votes of the Department of Trade and Industry and Department of Economic
Development.
Documents
No related documents