ATC210818: Report of the Portfolio Committee on Public Service and Administration on the Ease of Doing Business Bill [B6 -2021], Dated 18 August 2021

Public Service and Administration

REPORT OF THE PORTFOLIO COMMITTEE ON PUBLIC SERVICE AND ADMINISTRATION ON THE EASE OF DOING BUSINESS BILL [B6 -2021], DATED 18 AUGUST 2021

 

 

1.INTRODUCTION AND REFERRAL OF THE BILL

 

The Portfolio Committee on Public Service and Administration (“the Committee”) having considered the Ease of Doing Business Bill [B6-2021] (National Assembly – section 75), referred to it and classified by the Joint Tagging Mechanism (JTM) as a section 75 Bill, reports as follows:

 

The Ease of Doing Business Bill, a private member’s bill, was referred to the Committee on 26 February 2021 in terms of National Assembly Rule 286(4)(i) after all due deliberations, to consider a motion of desirability on the content and spirit of the Bill. (see ATC No 26-2021). The Bill had been introduced in the National Assembly, proposed as a section 75 and was published in the Government Gazette Number 43090 of 13 March 2020.

2.ATTENDANCE REGISTER

Members Present

ANC:

Mr James, TH

Ms Lesoma, RMM Ms Ntuli,  MM Ms Kibi, Ms MT

Ms Maluleke, Ms BJ Ms Malomane, Ms VP

 

DA

Mr Malatsi, S Mr McGluwa, J Dr Gondwe, M

 

EFF

Ms Komane, RN Ms Motsepe, CCS

 

IFP

Inkosi Cebekhulu, RN

 

 

3.OBJECTS OF THE BILL

 

The objects of the Act are to:

 

1. Create capacity in government to measure, control and reduce the socio-economic impact of regulatory measures;
2. Ensure the due consideration of multiple options by organs of state to achieve the objectives of government policy
3. Measure the impact of a regulatory measure, especially red tape contained in a regulatory measure, on business;
4. Measure and reduce red tape and the cost associated with red tape when conducting business in the Republic; and
5. Create a business friendly environment for business in the Republic

 

4.PRESENTATION BY THE INITIATOR OF BILL, MR HCC KRUGER (MP)

 

The Committee afforded Mr HCC Kruger an opportunity to introduce and present on the tabled Bill. He stated that the Bill seeks to get a political buy-in so that all Small, Medium and Micro Enterprises (SMMEs) overcome the binding and systematic constraints for businesspeople to operate in a business-friendly environment. SMMEs must experience conducive level playing fields and interact with government and its agencies with far less red tape in the system hindering their potential to thrive in stimulating economic growth and ultimately job creation. The Bill further seeks to create Regulatory Impact Assessment Unit (RIA) in the Presidency office responsible for the measuring and reducing red tape and the cost associated with red tape when conducting business in the Republic. The Bill will be applicable to all three spheres of government even though its section 75 Bill.

 

5.PRESENTATION BY THE OFFICE OF THE PRESIDENCY

 

The Socio-Economic Impact Assessment Unit in the Office of the Presidency was invited to clarify their roles and responsibilities in avoiding to promote duplication in government with what the Ease of Doing Business Bill seeks to achieve. The Socio-Economic Impact Assessment (SEIAS) Unit is responsible for assisting government departments to analyse broader socio-economic challenges, associated costs and risks and develop mitigation actions; ensure alignment with the NDP by taking into consideration on how policy proposals impact on and relate to the transformation and inclusive economic growth. The Unit further seeks to understand regulation that impacts negatively/positively on the society, including laws that favour big businesses and negatively impact SMMEs, the rich versus the poor, thus perpetuating exclusion.

The Office of the Presidency, through the Socio-Economic Impact Unit made the following remarks concerning the Bill:

Institutional Arrangements:

 

• The Bill establishes a RIA unit which is a duplication of the existing SEIAS unit.

 

• The Bill encroaches on mandates of other departments- Small Business Development and Trade, Industry and Competition.
• Operation Vulindlela is already addressing structural economic reforms.

 

• The Bill does not consider separation of powers between Parliament and the Executive.

 

• The Bill does not consider a holistic approach to red tape reduction such as Provinces and Municipalities.

Functions The Bill:

• Takes away current responsibilities of impact assessments from Departments, the SEIAS reports are assessed and quality assured by the SEIAS unit in the Presidency.
• Has due consideration of spatial inequalities on businesses and other socio-economic factors.

 

• Ensures that evaluations have to be strategic, such as how has red tape reduction contributed to businesses in creating additional jobs and contributing to economic growth?

 

 

6.WRITTEN AND ORAL SUBMISSIONS ON THE BILL

 

The Big Voice of SmallBusiness

The Big Voice of Small Business supported the Bill with amendments. The organisation was of the view that Section 18 of the Bill resides in the Small Business Department and might create confusion in the application. SEIA’s approach is selective on its consultations, therefore the organisation prefers the Regulatory Impact Assessment. The organisation further proposes that the Ministry of Small Business and Development establish the National Small Business Council to advise the Minister on numerous issues impacting on the sector.

South African Small Medium Enterprises Association

The South African Small Medium Enterprises Association supports the Bill. The organisation highlighted that red tape is a major challenge confronting government at large. Government departments continue to work in silos.

SAKELIGA

The SAKELIGA supports the Bill. The organisation is advocating for the establishment of the Regulatory Impact Assessment Unit in the Office of the Presidency to monitor the formulation of legislation. The establishment of the Unit will strengthen the constitutionality of the business environment.

Free Market Foundation

The Free Market Foundation supports the Bill.

 

 

7.COMMITTEE DELIBERATIONS ON THE BILL

 

The Portfolio Committee has deliberated and decided on the desirability of the Bill:

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and Micro business in the country. Red tape is among challenges impeding on the development of SMMEs and economic growth of the country.

 

•  

4) citing same reasons. However, there was a different view concerning SEIAs that numerous Bills are processed without undergoing through its processes.

 

Establishing the new Regulatory Impact Assessment Unit goes against the spirit of reducing the wage bill in government. There are financial implications on implementation of the Bill which will add more pressure to ailing financial resources and whilst the current government priority is to fight against the Coronavirus and save lives through vaccination rollout and livelihoods through reliefsupport.

 

The rationale for directing the Ease of Doing Business Bill to the Portfolio Committee onPublicServiceandAdministrationwasquestionedsincetheBillinitsentiretyseeks to address red tape hindering the Small, Medium and Micro Enterprises, which is the responsibility of other government departments such as Department of Small Business andDevelopment,TradeandIndustryandNationalTreasury.However,therationaleis understood because the Ministry for Planning, Monitoring and Evaluation, which is responsible for conducting SEIAS in the Presidency, falls under the oversight of the Committee on Public Service andAdministration.

 

The Committee was wary of perceived bottlenecks the Bill might create, whichshould be avoided byParliament.

 

The Portfolio Committee on Public Service and Administration is mindful that the Portfolio Committee on Small Business and Development has objected to more or less similar content of the Bill on the Red Tape Assessment Bill in the Fifth Parliament. Therefore, as much as the Constitution affords Members of Parliament anopportunity

 

to draft Private Members Bill, Members should be encouraged to do this through consultations and in-depth research about whatever policy gaps Bills seek to address and further check within government system whether there are no existing systems before tabling the Bill.

 

8.MOTION OF DESIRABILITY ON THE BILL

 

Having extensively deliberated on the content of the Ease of Doing Business Bill, the Portfolio Committee is on the firm view that the Bill is a duplication with the function of the Socio- Economic Impact Assessments Unit in the Office of the Presidency. Furthermore, the Bill objects seek to address red tape experienced by small businesses, which could be addressed the relevant committee.

The Committee resolved that the Bill is undesirable. Report to be considered