Green Light for Red Tape Removal


 12 April 2017 - Eileen Snyders


We cannot just continue with business as usual.

We are in need of a supportive environment and a unifying voice that can bind the small business community together in the face of our collective challenge – surviving the existential threat of an unfavourable economy, the impacts of which are already being felt by small businesses struggling to survive.

Our survival will be dependent on our ability to stimulate change and strengthen a supportive environment , inclusive of united responses that work towards action that compels change.

To build a supportive environment, we need to create an entirely new paradigm for small business development and send a clear message that this can only be done based on inclusively and a shared understanding of the opportunities and risks faced by small business.

We must remove the silos which divide government and the small business sector.

DA Member of Parliament, Henro Kruger tabled the Red Tape Impact Assessment Bill in parliament after spending two and a half years researching the impact of red tape in the economy and how other countries successfully reduced and eliminated it.

Kruger said if the Bill is accepted and becomes an Act in South Africa, it will over two years reduce red tape by 25%.

The practices and procedure of completing paperwork, filing and certification requirements, obtaining licences and reporting to gain administrative approval or achieve statutory compliance is complex, time consuming and costly, obstructive red tape is delaying doing business.

Kruger stated that the Bill is indeed important for the small business sector, as a report from the Small Business Project published in 2004 highlighted, the total compliance costs in 2004 in South Africa amounted to R79 billion, the equivalent to 6.5% loss in GDP, as well as, revenue for SARS in the preceding financial year – 2002/03.

To address this, the Bill seeks to radically reform the regulatory environment with the aim of easing entry into the mainstream for small businesses, building an inclusive society, guaranteeing the right to trade, accelerating social and economic transformation for growth and job creation and linking outcomes to all three levels of government, assisting government to achieve its target for job creation and poverty reduction by 2030.

Importantly the Bill contains a one-in-one-out principle. Ministers must within two years of commencement of this Act review all primary legislation or secondary legislation which they administer, that can be repealed or replaced in order to reduce red tape and the cost of red tape. 

Between 1994 and 2014 more than 1 200 Acts were promulgated. Each Act is founded on a policy and has accompanying regulations where most areas of red tape can be found.

The Bill reflects a sense of urgency and suggests a collaborative approach in pursuing the purpose, to assess regulatory measures to reduce red tape and the costs thereof. As we look towards Ministers to increase, not diminish, opportunities for small business, the question is how much can be achieved in two years. 

The Red Tape Impact Assessment Bill provides a platform for debate and action and has a critical role to play in reducing the adverse impacts of over regulation and provides small business with a voice, as well as, affords the Department of Small Business Development and the Minister some executive power to support small businesses, nurturing a sense of cooperation across the board.

The small business case narrative that 80% crash and burn in the first 18 months due to their own dysfunction is valid. We need new and inclusive ways of thinking to build a supportive environment that reduces wasted resources in the learning curve and the struggle time entrepreneurs put in before achieving success. The Red Tape Impact Assessment Bill provides an opportunity to comment on ways in which government engage in support of small business development.

We start the conversation by asking these questions, which regulation has you tied up in red tape, costing your business time and money, which legislation will you give government the green light to repeal and replace.