Western Cape Government Launches Comprehensive Plan to Cut Red Tape

Extract of Speech by Western Cape Economic Development Minsiter, Alan Winde

A major factor affecting the competitiveness of businesses is the regulatory environment in which they operate. In South Africa and the Western Cape, ineffective, time-consuming regulations, rules and administrative procedures characterise the interaction between government and the private sector.

This has impeded opportunities for economic growth and job creation.

If red tape is not addressed, it will remain an insidious threat to Western Cape businesses. By placing unnecessary blockages in the way, it inhibits large enterprises, as well as those smaller enterprises that are so important to our economy. It also deters foreign investment. While much of the most business-constraining red tape originates at national level, provincial and city governments have a considerable role to play.

If we are to succeed in growing business and attracting investment, we must eliminate red tape and roll out the red carpet.

In line with the Western Cape Government's first strategic objective, we have set out to eradicate red tape and create an enabling environment so that local businesses may grow and employ more people, and so that we may become an attractive destination for foreign companies to invest in. It must be emphasised that some regulations are prescribed by legislation, and that it is not our intention to break any rules or remove regulations that are beneficial.

Today, I am pleased to announce the launch of our comprehensive plan to eradicate red tape.

Our approach is two-fold:

1. Statutory: Including the eradication or reduction of legislation, regulations, permits, licences and standards (and the costs thereof) that present an unnecessary hindrance to business.
2. Systemic: Including making bureaucratic procedures and reporting more efficient, with a special focus on reducing the time it takes to complete mandatory processes.

At the heart of all our initiatives is a dedicated Red Tape Unit housed within the Department of Economic Development and Tourism. It has been tasked to:

Establish through Research and Consultation What Regulations Most Constrain the Private Sector

An inter-governmental working group has been appointed to identify and tackle key regulatory bottlenecks at both provincial and municipal level.

As part of this initiative, we will complete Regulatory Impact Assessments on procurement and supply chain management functions that constrain business. As they are completed, we will receive options for policy changes that ease red tape.

The Red Tape Unit has also begun to track 17 small and medium companies in various stages of starting up. These businesses are providing invaluable insight into the red tape challenges that they are faced with.

Improve the Efficiency and Customer Service of Bureaucratic Processes within the Western Cape Government and City of Cape Town

To achieve this, we have established a set of dedicated channels to receive and address business complaints and enquiries.

To ensure that our services reach all corners of the province, we have established a Red Tape Call Centre, which began operating last week. It is linked to a network of officials who have been tasked to receive enquiries and, wherever possible, eliminate obstacles swiftly and decisively. Members of the task team include:

• The Department of the Premier.
• The Department of Economic Development and Tourism.
• The Department of Transport and Public Works.
• The Department of Environmental Affairs and Development Planning.
• The Department of Agriculture.
• Provincial Treasury.
• The City of Cape Town.
• The South African Local Government Association (SALGA).
• Business Western Cape and the Cape Chamber of Commerce.

The call centre is operational during business hours at the following share-call number: 0861 888 126. The contact centre may also be contacted via e-mail at redtape@pgwc.gov.za.

In addition, through our partnership with Business Western Cape, we have employed a full-time person at the Chamber of Commerce to troubleshoot red tape directly at this source. To bring enquiries to our attention through this channel, businesses can e-mail redtape@capechamber.co.za, deposit their query into the Red Tape Drop Box located on the second floor of the Cape Chamber of Commerce, 19 Louis Gradner Street, mail us at PO Box 204, Cape Town, 8000, or fax 086 626 6461.

Provide Advice on Red Tape Matters at RED Door and Partner Organisations around the Province

The RED Door and its partner organisations in the province (SEDA, West Coast Business Development Centre, The Business Place) will act as one-stop shops for accepting, directing and troubleshooting red tape. Local businesses in the start-up phase will be given hands-on assistance at these outlets with regard to registering and legalising their businesses.

In addition, the tender component of our website has been upgraded in order to improve access to provincial (and local government) tender opportunities and assist with accessing support services when tendering. Visit www.westerncape.gov.za/tenders for more information.

Participate in public events at which red tape and business advice will be offered

In addition to twice-yearly Supplier Open Days, in August the Department of Economic Development and Tourism, in partnership with Business Western Cape, will visit central points in the province to assist small and medium enterprises to resolve red tape matters. The Red Tape Unit, Wesgro and the Companies and Intellectual Development Commission (formerly CIPRO) will be on hand to offer advice.

We will also:
Research and adopt, where possible, regulatory best practice as supported by the World Bank and the International Finance Corporation, amongst others; and

Advocate for regulatory best practice in the national and local spheres of government, including making certain processes available online.

In 2004, red tape is estimated to have cost South Africans R79 billion. In its 2011 report, the World Bank ranked South Africa 75th of out 183 countries when it comes to the ease of starting a business - down two places on last year.

In line with the Western Cape Government's key objective of growing the economy and creating jobs, I am committed to doing whatever is within my power, and within the rule of law, to reduce red tape swiftly and efficiently so as to create an enabling environment for business.

Key Facts about Red Tape:

• The consideration of the regulatory environment is the single most important element of an economic growth strategy and remains high on the economic agenda of most of the OECD countries.
• developing countries can improve their annual growth rates by creating a more enabling environment (World Bank, 2004).
• South Africa is currently ranked 75th of out 183 countries when it comes to the ease of starting a business (World Bank, Doing Business 2011).
• Red Tape cost South Africans R79 billion in 2004 (SBP - Counting the Cost of Red Tape, 2004).

This being equivalent to: 6.5% of GDP (2004)
16.5% of the total wage bill in 2003
28% of SARS revenue in 2002-3