Scrap the Licensing of Businesses Bill - Toby Chance

Toby Chance says legislation would be an administrative nightmare for local govt

Scrapping the Licensing of Businesses Bill must top Minister Zulu's New Year ‘to do list'

12 January 2015

The DA challenges Small Business Development Minister, Lindiwe Zulu, to meet with Minister of Trade and Industry, Rob Davies, to successfully ensure that the job-killing Licensing of Businesses Bill is scrapped and does not proceed to Parliament. 

In her address at the launch of the Cape Town hub of Anglo American and De Beers' Zimele Enterprise Development last week, Minister Zulu stated that her department was fully committed to reducing regulatory constraints facing small, micro and medium sized enterprises, particularly at local government level. 

While this verbal commitment is welcomed, it is abundantly clear that other ministries within the economics cluster do not share her sentiment. Many bills and policies in other economics cluster ministries in effect only hamper the growth and development of small businesses. 

One such bill is the Licensing of Businesses Bill, which is set to come before the Portfolio Committee on Trade and Industry early this year. This bill will require all businesses to register with their local municipality and receive a "license" to operate. Not only will this become an administrative nightmare for many defunct local authorities to carry out, but it serves to add more layers of bureaucratic red tape to entrepreneurs, which will increase business costs and kill thousands of jobs. 

The bill also allows municipalities to impose restrictions and conditions on businesses as they may deem necessary, with inspectors given sweeping powers to search premises and seize goods for whatever reason they see fit. This is a recipe for rampant bribery, corruption and abuse. It will come down particularly hard on the informal sector, which already suffers from constant harassment by over-zealous police and municipal officials.

With SMMEs expected to create 90% of the jobs required to meet the National Development Plan's objective of 11 million jobs by 2030, the success of small businesses should be of paramount importance to government. Government should relentlessly pursue cost-reduction measures for business, not add further layers of red tape and regulation which add to costs and the killing of jobs.

The DA-run Western Cape government has implemented a dedicated Red Tape reduction unit, which assists small businesses with their administrative and bureaucratic challenges by identifying processes that can be streamlined, and assists entrepreneurs to navigate the regulatory landscape. This unit has been highly successful, and the DA would implement it at national government level.

If Minister Zulu truly is the champion of job creation and sustainable small business development, she must ensure that this burdensome bill does not make its way to Parliament. Anything less would prove her words to be nothing more than indulgent rhetoric.

Statement issued by Toby Chance MP, DA Shadow Minister of Small Business Development, January 12 2015

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