DTI Annual Report: More over-regulation, less job creation
Today the Minister of Trade and Industry, Rob Davies, presented to parliament the Department of Trade and Industry’s (DTI) Annual Report for the 2014/15 financial year.
The outcome of the Annual Report is straightforward - under Minister Davies the DTI has directed our economy into a helpless situation through over-regulation and underspending on key job creating programmes. A fundamental policy shift is needed in order to revive the South African economy.
As the apex ministry charged with fostering economic growth and job creation in South Africa, the question by which to assess the DTI's performance is this: Is it becoming easier to do business and create jobs in South Africa. The answer to this question is a resounding “no”.
What Minister Davies fails to grasp is that through endless over-regulation, led by his department, this government is strangling our economy within an inch of its life.
Nowhere is this better illustrated than in the nature of legislation developed by DTI in the last year. While the Companies Act Amendment Bill was removed from the agenda, an array of regulatory bills were developed, including the Licensing of Businesses Bill, Liquor Amendment Bill, Gambling Amendment Bill, and Copyright Amendment Bill.
These bills will see the DTI continue on its path to over-regulate the economic environment and overburden entrepreneurs and business owners, preventing them from growing and creating jobs.
The Annual Report also revealed that the department underspent on key incentive and innovation programmes within the manufacturing sector, and missed its job creation targets by hefty margins.
For example, the Manufacturing Competitiveness Enhancement Programme (MCEP) set a target of retaining 99 600 jobs from approved enterprises, yet achieved only a fraction - 37 897 jobs - thus missing this target by 61 703.
The DTI’s Enterprise Investment Programme (EIP), tasked with providing incentives to promote investment in the manufacturing sector, performed abysmally. While the programme exceeded its expenditure by R978 million in funding projects, it missed its job creation target by a country mile.
It set a target of 4500 new jobs, but only managed to create 1195 jobs. Astonishingly, this is down from last year’s achievement of 11 734 jobs. This only serves to highlight the fact that throwing money at the problem does not solve it. Rather fundamental reform is required.
The DTI’s spending patterns are also indefensible, as only 3.68% of its total budget was spent on its Trade and Investment South Africa programme, which is tasked with increasing SA’s export capacity and supporting direct investment flows through strategies for targeted markets. Shockingly, 45% of that amount was for “compensation of employees”.
Far more needs to be done to open up our economy in order for businesses to expand, innovation to flourish and jobs to be created.
Under the leadership of Minister Davies, the DTI has placed less and less emphasis on fostering innovation and enterprise in order to create jobs. Wholescale change is required as a matter of urgency and necessity.
Issued by Geordin Hill-Lewis, DA Shadow Minister for Trade and Industry, 8 September 2015
