SACOB COMMENTS ON THE SMALL BUSINESS AMENDMENT BILL –
B20-2003


INTRODUCTION

SACOB thanks the Portfolio Committee on Trade and Industry for the opportunity to present its views on the Small Business Amendment Bill. Since SACOB represents some 35 000 businesses the majority of which are small, it has a direct interest in such business, it has an active Small Business Committee that considers a wide range of issues related to such undertakings.

COMMENTS ON THE BILL

Clause 1, Amendment of Section 1 of Act 102 of 1996

SACOB understands the motivation to repeal provisions relating to the National Small Business Council, but questions whether the reasons for its inability to operate effectively have been scrutinized in sufficient detail for such a decision to be taken. If the underlying reasons for its moribund state are not addressed, any new structure could suffer a similar demise. SACOB would therefore recommend that very serious consideration be given to rectifying the problems relating to the National Small Business Council rather than establishing a new structure to perform a similar function.

Chapter 2

Minister’s Power to Consult Small Business

SACOB is gravely concerned at the possible implications of this clause. SACOB believes that it is very subjective in nature. Organisations that have a legitimate claim to represent the interests of significant numbers of small business run the risk of not being recognized, with the result that their views are not considered.

A further concern of SACOB is the statements made by members of the Department of Trade and Industry that it is the intention that the Department will establish a forum for small business that will act as a "sounding board" for the Department. SACOB respectfully points out that any small business forum established by the Department, as the "voice of small business" will face a credibility problem, the key question being how a body established by government can operate independently of government.

SACOB therefore considers that it would be inappropriate to establish such a forum particularly as there are existing organizations that can fulfill that role. What is needed is not a new structure, but rather closer co-operation with existing structures within the private sector.
In this regard SACOB places the following on record. The general impression of the chamber is that it represents "big business". This perception is probably due to the way in which the media reports on the organization. The reality is that it represents approximately 35 000 companies through its membership base. This base comprises local chambers of commerce, industry and business, 30 uni-sectoral associations and 150 corporate members. Between 90 and 95% of the companies can be classified as small or medium enterprises. In addition we are in an advanced stage of discussions with the Services Seta to take an additional 43 associations into membership. These associations currently have no voice, and comprise in the main small and very small enterprises. Once these associations become members, SACOB will effectively represent 73 uni-sectoral associations, with membership fully representative of South African demography.

Furthermore, in addition to considering broad principles in its representations and advocacy functions SACOB pays specific attention to impacts on small enterprises. Recent examples of where SACOB has made representations on small business include, but are not limited to:

The promotion of Access to Information Act and the need to produce manuals for publishing in the government gazette
The additional administrative and financial burden on small business resulting from the new regulations on plastic bags
The difficulties that small businesses will experience as they try to comply with the recently released Black Economic Empowerment Strategy
The impact of the taxation regime and amendments to the tax structures as announced in the budget
The additional impost that the provisions of the Property Rates Bill and local government and other tariffs on small enterprises – for example, electricity and water tariffs, and telecommunications postal charges
The detrimental effect that the new liquor legislation will have on small enterprises in that industry
The additional burden that the development of employment equity plans will impose
The Skills Development levies, where SACOB has called for the process of applying for the grants to be simplified for small business.
A call for a special dispensation for small business with regard to centralized bargaining councils
Electronic Communications and Transactions Act
The banning of trucks on motorways in the Gauteng Province
The impact of the container surcharge imposed on importers and exporters by the shipping lines due to congestion in the ports





In drafting a voluntary charter for the IT industry, SACOB is taking specific cognisance of the needs of small businesses in that sector.

SACOB also regularly comments on the cost of doing business, especially small business, in South Africa. It expresses the views of small business at forums such as the Anti-corruption Forum, and assists in the dissemination of information to members, such as the Department of Arts, Culture, Science and Technology’s call for nominations for the entrepreneur of the year award.

Until the suspension of the President’s Export Awards, SACOB sponsored a small business trophy as one of the awards.

Yet, in spite of this, the general impression of SACOB is that it speaks for big business, and as such it would probably not be consulted on small business issues.

Clause 5 Amendment of Section 11 of Act 102 of 1996

Bearing in mind the comments made in respect of chapter 2, SACOB would not support an amendment that provides for the nomination of directors to the board.

Clause 6 Amendment of Section 19 of Act 102 of 1996

In the absence of support for a forum established by the Department, this amendment would fall away.

CONCLUSION

While SACOB does not support that main thrust of the amendments to the Small Business Act as proposed in the Bill, SACOB nevertheless recognizes that there is room for improved representation by small businesses on all issues that affect them. To this end SACOB is able and willing to assist in efforts to bring this about within the private sector.