By Cebelihle Mbuyisa.
While the National Small Enterprise Amendment Bill is likely to become law, it is doubtful that it will be signed off by the president in its current form. The Portfolio Committee on Small Business Development heard oral submissions from representatives of seven organisations on their concerns about the Bill and how it must be improved. Each speaker had misgivings about some of the proposed changes.
Part of what the Bill seeks to do is establish and register the Small Enterprise Development Finance Agency and dissolve the Small Enterprise Finance Agency, the Co-operative Banks Development Agency (CBDA), and the Small Enterprise Development Agency. It will also see the establishment of an ombud office for small businesses and allow the minister to declare certain practices as unfair trading in relation to small enterprises.
Tebogo Phadu, from the SA Cooperative Banking Association, bemoaned the proposed amendments on the grounds that they created “uncertainty over the future of CBDA because it has historically been particularly supportive of the [small business] sector.” He was concerned that the new agency would not be granted the same flexibility and independence as CBDA. According to the SMMEs and Co-operatives Funding Policy for South Africa, which quotes the Organisation for Economic Co-operation and Development, only 26% of business credit extended by banks is directed towards SMMEs, with the lion’s share of this going towards established medium-sized businesses.
Many small business owners turn to co-operatives to raise funds. Cosatu parliamentary coordinator Matthew Parks told the briefing that there were six specific clauses the federation was concerned about. Many of them had to do with workers’ interests. One example was Section 17, which focused on unfair trading practices. “The section outlines powers that the minister gives to the ombud to deal with prohibited practices. But some of these issues appear contentious. For instance, Section 17(2) outlines that small enterprises have the right to trade and transact freely, including the right to accountability from large enterprises,” Parks said.
Meanwhile, Arno Roodt from Employer SA, which represents small business interests across various industries, argued for the insertion of a “non-racialism clause.” He said non-racialism was “not only a moral imperative but also a key driver of prosperity.” While he alluded to South Africa’s history of racialised inequality, where black people collectively have less and white people more, he did so passingly and without mentioning his company’s position on the importance, or non-thereof, of redress. Roodt also warned that “perpetuating racialised policies is not the solution.”