New Businesses Licensing Bill is a Job Killer
The Democratic Alliance is concerned that the Businesses Licensing Bill, recently gazetted by Trade and Industry Minister Rob Davies, will have a harmful effect on job creation in the small business sector. The main provisions of the Bill are contrary to the policy proposals made in the National Development Plan. It will make it more difficult to start and grow a business in South Africa, and should therefore be opposed.
I will write to the Chairperson of the Portfolio Committee on Trade and Industry, Joanmariae Fubbs, to ask that Minister Davies be called before the Committee for an urgent briefing on his rationale for introducing this wrongheaded draft Bill.
The National Development Plan repeatedly and correctly emphasises the need for the government to create an environment in which it is easier, simpler and cheaper to do business in South Africa. It calls for a quick and easy process for starting a new business and transferring property, the cutting of unnecessary red tape, and the streamlining of administrative processes.
South Africa is ranked 53rd out of 185 economies in terms of the ease of starting a business (World Bank, Doing Business 2013), which is ten positions lower than our ranking in 2012. Mauritius ranked 14th and Rwanda ranked 8th. That we are ranked so low and that we are slipping further, should be a cause of serious concern.
In this context, the Licensing of Businesses Bill clearly runs counter to everything the NDP calls for. This Bill requires every business in South Africa, no matter how big or small, to apply for a license to operate from the local municipality in which they are situated. The local municipality must keep a comprehensive database of information on every business that it licenses. Every police officer, traffic officer and a host of other officers will be empowered to be license inspectors, with far reaching powers of search, seizure, and issuing of fines. The penalty for operating a business without a valid license could be up to 10 years in prison.
The Bill does not, so far as I can tell, help to solve any particular problem. The Minister must answer some key questions:
- What necessitates the introduction of this Bill?
- What specific problem does this Bill aim to address, and in what way?
- How does this Bill reconcile with the aims of the National Development Plan?
All that this Bill will do is make it even more difficult to start and run a business in South Africa. It will be another small factor acting to dissuade entrepreneurs from turning their good ideas into start-up businesses, and ultimately that means fewer jobs. We need a Department of Trade and Industry that supports business to invest, grow, and hire more staff; not one that continuously erects new obstacles for business to climb.
Statement issued by Geordin Hill-Lewis MP, DA Shadow Deputy Minister of Trade and Industry, April 18 2013
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