Red Tape Reduction Roll-out
the dti, CoGTA & SALGA
Contents
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Foundation and current status of RTR within the country
National Roll-out of LRTR objectives overview
Symptoms of Red Tape
Rationale for Red Tape Reduction at local government
Variables/indicators for Red Tape Reduction assessment
Approaching Red Tape Reduction from different
perspectives
Red Tape Reduction Programme Cycle
Broad steps for developing Red Tape Reduction Plan
Positive attributes of Reducing Red Tape from one case
study
RTR linkages between National, Provincial and Local
Government
THE 10 YEAR STRATEGIC APPROACH
2004-2014
Strategic Pillars for the SMME Strategy
Strategic Pillar 1:
Increase Supply for
financial and
non-financial support
services
Collaborative approaches;
•Streamline resources from
the public sector and crowdin private sector resources
Strategic Pillar 2:
Creating demand for
small enterprise
products and services
Public sector procurement
strategy as a lever for
increased demand
• BEE codes of good practice
as a lever increased demand
Strategic Pillar 3:
Reduce small enterprise
regulatory constraints
Establish a regulatory impact
assessment framework and
monitoring mechanism
Foundation and current status on Red
Tape Reduction
1.
Comprehensive reviews conducted within government to assess the regulatory
environment as per Cabinet directive since 2005
2.
Different departs mandated to conduct regulatory assessments impacting
SMMEs - taxation, labour, tourism, ( the dti and dplg: focus on municipalities)
3.
Training manual cutting red tape, Improving local business environment, pilot on
improving the regulatory environment (2006 – current). Regulatory review
reiterated by Cabinet in 2013.
4.
The vision for 2030 regarding SMME development as outlined on NDP highlights
the need to have a simplified regulatory environment and better coordination of
SMME policies and programmes
5.
How do we effectively contribute towards this vision? creating a conducive
environment for SMMEs by ensuring continuous assessment of regulatory and
institutional environment within the different sectors (access business
opportunities)
6.
Partnership between the dti, cogta and salga guidelines for reducing municipal
RTR - 12 municipalities within the country based in 6 provinces.
Goals
Improved
Regulatory
Reform
Effective
utilisation of
the
guidelines
Access to
Business
Opportunities
by SMMEs
Progression
New local
municipalities
buy-in
Coordination
of the Rollout Process
(clustering)
Processes
Methodology
Tools Sessions
Roll-out
Stakeholder
mobilisation
and
awareness
creation
Baseline
Assess Action
Plans
Variables (12
Piloted)
Initiate Rollout in new
Municipalities
Support
Provincial Red
Tape
Reduction
Initiatives
Solicit
Partnerships
with the
Private
Sector
Provide
Support &
Address
Challenges
Time
Encourage
benchmarking
and
networking
Highlight
success
stories
Objectives of the national roll-out
1. Enhance best practice and lessons learned on Municipal
Red Tape Reduction
a.
b.
c.
d.
e.
f.
LED to define itself as an economic actor within the local economy (provincial and
local govt. policies, regulations and strategies)
Target specific sectors for investment and economic growth
Encourage local procurement
Availability of services and infrastructure for economic development
Simplify regulation and by-laws to stimulate economic development
Non-financial Regulations (Town Planning, Business Licensing, Informal trading) vs.
Financial Regulations (Property Rates, Supply Chain Management, Debt and Credit
Control)
2. Sustain capacity and implementation of Local Red Tape
Reduction Processes
3. Encourage Public Private Partnership initiatives that
prioritise SMME development
a.
b.
Relationships between business and supporting institutions can affect stimulation of
the local economy
The intensity of the dialogue quality, depth, sustainability
Impact of municipal regulations on SMMEs: 2006
Objectives of the national roll-out
4. Improve the Local Business Environment via Red Tape
Reduction
a.
b.
Many concerns within LBE result in constraints to growth of SMMEs (regulatory
systems, improving govt. services, effective management of informal sector)
Improvement of LBE to incorporate within the RTR Programme i.e. local business
climate/context, business retention and expansion
5. Initiate the institutionalisation of Red Tape Reduction
Practices at local government level
a. Long-term sustainability depends on guidelines adoption, RTR incorporated within
performance of institutions and eventual institutionalisation
b. Current programme initiated RTR at local govt. level (local municipalities) ultimate goal
conduct RTR within all spheres including enterprise development agencies utilising
multi-disciplinary approach
Symptoms Red Tape
Symptoms of Red tape cont.…
1. Why are we as government continuously reducing Red
Tape?
1.1 Besides reducing duplication, long queues, endless paperwork,
lengthy procedures
1.2 Red Tape hampers performance, causing inefficiencies and
ineffectiveness at organisational level ultimately leading to losses
within the economy
1.3 Reduce the cost of doing business and improve service delivery
2. Govt. developed policies, laws and regulations
2.1 Encourage open markets, innovation and competitive economy
2.2 Some local business environments discourage investors (domestic
& international)
2.3 Unfavorable regulatory environment: high costs and risks of
conducting business in certain areas
Benefits to Reducing Red Tape
•
Local Government:
– Improve access to and use of services
– Strengthen financial position and available resources for
service delivery: increase municipal revenue, reduce cost
of delivering services strengthen economy by retaining
and/or attracting new investments
– Improve governance procedures and address low or
declining levels of trust to support stronger partnerships
with private sector
•
SMMEs:
– Save time, compliance costs and ability to stay in business
and grow due to improved cash flow, efficiency,
competitiveness, and sustainability
Rationale for Red Tape Reduction at
local government level
1.
Red Tape evident within three spheres of government and
some private sector space: increases with growth and
complexity/specialization
2.
It is the responsibility of each sphere of govt. however
municipalities lead in specific jurisdictions improving LBE
maximize economic opportunities
3.
SMMEs interface constantly with local government for the
provision of services
4.
Encourage investors (local & international) by limiting high
costs and risks of doing business local govt. and
exacerbate favorable regulatory environment encourage
innovation, growth & sustainability of SMMEs
5.
Long-term: Provision of SMME services at local govt. level
Variables/indicators for Red Tape Reduction
Assessment
1. Lengthy and inefficient supply chain management processes, (which affects the 30day payment system to SMMEs);
2. Poor enforcement of Municipal Informal Trading by-law results in trading outside
demarcated trading areas, unfair competition with existing businesses, food health
problems, contributes towards crime which negatively impacts on CBD businesses;
3. Infrastructure maintenance and bulk infrastructure backlog costs when new
developments are proposed and internal capacity and processes weak and inability
to spend the capital budget;
4. Poor communication by the local municipalities of relevant business information to
businesses;
5. Lack of knowledge and difficulty in accessing of small business funding available and
the need for support in utilising funding effectively;
6. Limited awareness of municipal tender information and too few qualified local
service providers access tenders;
7. Lack of approved municipal investment and marketing plan;
8. Land not being accessible for development;
Variables/indicators for Red Tape Reduction
Assessment cont…
9. Challenges with the Construction Industry Development Board rating system
requiring a level 7-8 accreditation where local providers can only reach level 3-4
10. Limited Intergovernmental relations in planning, EIAs and rezoning including old
provincial planning legislation
11. Delegation of powers – affects timeous authorisation of SMME payments
12. Marginalisation of LED in the municipal structure
13. Recruitment of inappropriate personnel – deployment in strategic positions
Approaching Red Tape Reduction from
different perspectives
1.
Degree of regulation: unhealthy competition, health
hazards and environmental destruction
2.
Regulation that hamper the effective development of
SMMEs, inappropriate or unduly restrictive regulatory
conditions constrain inception, operation and growth
3.
Addressing Red Tape to reduce costs related to
compliance (time and money) non-compliance (fines,
harassment) and barriers created by procurement
procedures
4.
Addressing Red Tape to improve the use of services and
service delivery
5.
Multi-disciplinary and no “One size fits all”. Local context,
interaction within three spheres and Local PPPs.
Red Tape Reduction Programme Cycle
Sustainability &
Positive Economic
Outputs
Understanding
Local Context
Establishing mandate
1. Scoping
Phase
4. Evaluation Phase
Public-Private
Partnerships
Preparing
People
Celebrate
Success
Measures to sustain
the Process
3. Institutionalisation
Phase
Setting up
Processes
Consultation and
Implementation
Action Research
& Mobilisation
Red Tape issue analysis
and selection of
Champions
Focus Workshops,
additional Research
2. Assessment &
Implementation Phase
Benefits of Red Tape Reduction for
Municipalities E.g. Steve Tshwete
1. Building plans are approved within app. 10 days (from
3 months) – if all information is correct and not
paralleled by rezoning
2. Rezoning time down to 45 days (from 6 month) – if no
objections – due to downward delegation of decision
making power
3. Information to the public was improved to provide
clarity on procedures, avoiding incorrect applications
and managing expectations
4. Staff employment to avoid backlogs
RTR Programme
RTR linkages between National, Provincial
and Local Government
National
Provincial
Local
Locality, sectors, different levels of growth
Metro
Prov. depts.
L
E
D
District
Local
Pro. agencies
SMME DEVELOPMT.
Nat. agencies
Nat. depts.
Fin. & non-fin
regulations
DTI & CoGTA
Private sector
RTR National, Provincial and Local Task Teams
1. National RTR Task Team
a.
b.
c.
d.
e.
f.
Representatives: the dti, CoGTA & SALGA
Create an enabling environment for SMMEs, concern regarding performance of some local
municipalities, recognition that low capacity municipalities face serious economic challenges,
ensure implementation of guidelines providing practical, hands-on support to municipalities
Best Practice: addressing regulatory & compliance processes by establishing mechanisms to
reduce barriers affecting SMMEs (i.e. national policy implications as identified at prov. & local
govt.)
Solicit participation of relevant national govt. departments
Support Public-Private Partnerships
Sustainability & initiate institutionalisation
2. Provincial & Local RTR Task Team
a.
b.
c.
d.
e.
f.
Representative: Economic Dev., CoGTA, SALGA, Municipalities, Enterprise Dev. Agencies
Red Tape Reduction Plan: SMME strategy, IDP, Programmes
Assessment of regulations affecting SMMEs within LBE/ provide context
Solicit involvement of private sector
Scope of work/sectors
Monitoring and evaluation
SBP Ways of avoiding/reducing regulatory compliance costs
Close business/do not start business
Pay bribes
Double registrations/use other bank accounts
Limit visibility
Limit wages and benefits
Avoid UIF
Avoid VAT registration
Avoid registration/informal
Take chances/ignore some regulations
Outsourcing
Mechanisation, Higher Efficiency
Using part time staff/foreigners
Tax avoidance/evasion
Limit size/keep below VAT level
Reducing employment
0%
10%
20%
30%
40%
50%
Percentage of resondents presenting options
20%
stayed
the same
71%
More difficult
9%
Easier
SBP 2014: Legislation, market, performance of
economy
Thank you!!!