SMD

Annual Report 2023/2024

The Portfolio Committee has since the establishment of the Department called for the Amendment or repealing of the Businesses Act (1991). Unfortunately, this legislation was not assigned to the Department alongside the National Small Enterprise Act (1996) and the Co-operatives Act (2005) when the Department was established in 2014. This has invariably prevented the Department from initiating the amendment or repeal of the Businesses Act. The DSBD subsequently requested and successfully got the Businesses Act No. 71 of 1991 transferred from the dtic to the DSBD in 2020/21 financial year as per the Presidential Proclamation of 20 October 2020. The 2021/22 financial year has been used to initiate the initial review of the Act as well as the dtic 2013 Business Licensing Bill. In the 2022/23 the Department has included in its APP the indicator: “number of progress reports on the review of the Businesses Amendment Bill and proposed changes approved by EXCO” for 2022/23; and indicated that the Bill would be introduced to Parliament in the 2024/25 period.

Matters raised by the Portfolio Committee Department’s response

a) Pending OCSLA Certification, the Department will submit to the Business Licensing Bill to Cabinet for approval for Gazetting for public comments. The Department is not able to provide a specific date – as this is dependent on OCSLA certification. The Department projects that the Bill will only be introduced to Parliament in the 7th administration. b) It will finalise and submit the draft National Business Licensing Policy to Cabinet for approval by the end of the 2023/2024 period.

Given the progress made in reviewing the Businesses Act and developing the Amendment/Repeal Bill; the Department had revised its targets on 2023/2024 APP wherein the Bill would have been introduced to Parliament by the end of the 3rd quarter of 2023/2024. The Department has unfortunately not been able to meet this target given:

1. The Department did not secure certification of the Bill from the Office of the Chief State Law Advisor (OCSLA). The Department submitted to OCSLA in June 2023 and received a legal opinion that required extensive re-drafting or the Bill. The Department submitted again in September 2023 and still received another legal opinion. The Department has since secured legal drafting services to assist the Department in finalising the Bill and has submitted to OCSLA in January 2024 and hopes for OCSLA certification.

2. The requirement for a National Policy on Business Licensing to precede the submission of the Bill. The Department started work on the Bill first and then worked on the Policy alongside work on the Bill and had intended to submit both documents to Cabinet at the same time. Cabinet secretariat indicated to the Department that the Policy would need to be submitted first and approved before the Bill is tabled. The Department has thus presented the draft National Business Licensing Policy to Cabinet at the special cabinet meeting of 8 December 2023 and secured approval to gazette the policy for public comments. Given the above developments the Department projects that:

The amendment of the Business Act, however, remains a significant concern for the Committee due to its accountability in regulating township and rural enterprises. During the State of the Nation Address in February 2022, the President had this to say “we

are reviewing the Business Act – alongside a broader review of legislation that affects SMMEs – to reduce

the regulatory burden on informal businesses”. While in response to the last BRRR cycle recommendations the Department had committed that “the Bill would

be introduced to Parliament by the end of the second quarter of 2023/2024”. This did not materialise. The Committee takes notice of the commitment in the

2023/24 annual performance plan that the Businesses Amendment Bill will only be taken through Parliamentary processes during the seventh Parliament, 2024/25.

Part C • GOVERNANCE • Department of Small Business Development

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