Red Tape Reduction Roll-out the dti, CoGTA & SALGA

1. Red Tape Reduction Roll-outthe dti, CoGTA & SALGA

2. Contents • 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

3. THE 10 YEAR STRATEGIC APPROACH2004-2014 Strategic Pillars for the SMME Strategy Strategic Pillar 1: Strategic Pillar 2: Strategic Pillar 3: Creating demand for small enterprise products and services Reduce small enterprise regulatory constraints Increase Supply for financial and non-financial support services • Collaborative approaches; • Streamline resources from the public sector and crowd-in private sector resources • Public sector procurement strategy as a lever for increased demand • BEE codes of good practice as a lever increased demand Establish a regulatory impact assessment framework and monitoring mechanism

4. Foundation and current status on Red Tape Reduction • Comprehensive reviews conducted within government to assess the regulatory environment as per Cabinet directive since 2005 • Different departs mandated to conduct regulatory assessments impacting SMMEs - taxation, labour, tourism, ( the dti and dplg: focus on municipalities) • Training manual cutting red tape, Improving local business environment, pilot on improving the regulatory environment (2006 – current). Regulatory review reiterated by Cabinet in 2013. • 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 • 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) • Partnership between the dti, cogta and salga guidelines for reducing municipal RTR - 12 municipalities within the country based in 6 provinces.

5. Access to Business Opportunities by SMMEs Improved Regulatory Reform Goals Effective utilisation of the guidelines Progression New local municipalities buy-in Coordination of the Roll-out Process (clustering) Processes Methodology Tools Sessions Roll-out Encourage benchmarking and networking Initiate Roll-out in new Municipalities Support Provincial Red Tape Reduction Initiatives Stakeholder mobilisation and awareness creation Solicit Partnerships with the Private Sector Highlight success stories Assess Action Plans Variables (12 Piloted) Provide Support & Address Challenges Baseline Time

6. Objectives of the national roll-out Enhance best practice and lessons learned on Municipal Red Tape Reduction 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) Sustain capacity and implementation of Local Red Tape Reduction Processes Encourage Public Private Partnership initiatives that prioritise SMME development 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

7. Objectives of the national roll-out Improve the Local Business Environment via Red Tape Reduction 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 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 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

8. Symptoms Red Tape

9. 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

10. 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

11. Rationale for Red Tape Reduction at local government level • Red Tape evident within three spheres of government and some private sector space: increases with growth and complexity/specialization • It is the responsibility of each sphere of govt. however municipalities lead in specific jurisdictions improving LBE maximize economic opportunities • SMMEs interface constantly with local government for the provision of services • 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 • Long-term: Provision of SMME services at local govt. level

12. Variables/indicators for Red Tape Reduction Assessment • Lengthy and inefficient supply chain management processes, (which affects the 30-day payment system to SMMEs); • 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; • 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; • Poor communication by the local municipalities of relevant business information to businesses; • Lack of knowledge and difficulty in accessing of small business funding available and the need for support in utilising funding effectively; • Limited awareness of municipal tender information and too few qualified local service providers access tenders; • Lack of approved municipal investment and marketing plan; • Land not being accessible for development;

13. Variables/indicators for Red Tape Reduction Assessment cont… • 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

14. Approaching Red Tape Reduction from different perspectives • Degree of regulation: unhealthy competition, health hazards and environmental destruction • Regulation that hamper the effective development of SMMEs, inappropriate or unduly restrictive regulatory conditions constrain inception, operation and growth • Addressing Red Tape to reduce costs related to compliance (time and money) non-compliance (fines, harassment) and barriers created by procurement procedures • Addressing Red Tape to improve the use of services and service delivery • Multi-disciplinary and no “One size fits all”. Local context, interaction within three spheres and Local PPPs.

15. Red Tape Reduction Programme Cycle Sustainability & Positive Economic Outputs Understanding Local Context 4. Evaluation Phase Establishing mandate Public-Private Partnerships Celebrate Success 1. Scoping Phase Preparing People Measures to sustain the Process 3. Institutionalisation Phase Setting up Processes Consultation and Implementation Action Research & Mobilisation Focus Workshops, additional Research Red Tape issue analysis and selection of Champions 2. Assessment & Implementation Phase

17. Benefits of Red Tape Reduction for Municipalities E.g. Steve Tshwete • Building plans are approved within app. 10 days (from 3 months) – if all information is correct and not paralleled by rezoning • Rezoning time down to 45 days (from 6 month) – if no objections – due to downward delegation of decision making power • Information to the public was improved to provide clarity on procedures, avoiding incorrect applications and managing expectations • Staff employment to avoid backlogs

18. RTR linkages between National, Provincial and Local Government

19. Locality, sectors, different levels of growth Metro Pro. agencies Prov. depts. SMME DEVELOPMT. District LED Nat. agencies Local Nat. depts. DTI & CoGTA Fin. & non-fin regulations Private sector

21. RTR National, Provincial and Local Task Teams 1. National RTR Task Team 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 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

23. 20% stayed the same 71% More difficult 9% Easier SBP 2014: Legislation, market, performance of economy

24. Thank you!!!