Tuesday, 26 February 2019

DA motion on the economy - text of my speech and YouTube video

Yesterday evening I took part in the DA motion on the economy with my colleagues Geordin Hill-Lewis, Angle Khanyile and Mbulelo Bara. My focus was on small business and the experience of the Western Cape in reducing red tape.

You can read my speech below or watch it on YouTube.

House Chairperson

The quickest way to uncover a political party’s attitude to the role of small business in the economy and solving the jobs crisis is to do a word search of their manifesto.

In the DA’s manifesto, launched on Saturday, you will find 39 references to small business, not just in the section on small business but throughout the document. In the ANC’s manifesto, small business gets 13 mentions and in the EFF’s, only 3.

Does that tell us something about their priority for growing our economy and creating jobs?

What about red tape? Red tape strangles small business and inhibits growth and job creation. The DA’s manifesto mentions red tape 10 times. Neither the ANC’s nor the EFF’s manifestos mention it at all – no, not once.

So, small business minister Lindiwe Zulu’s promise of a red tape reduction strategy doesn’t get a mention in the ANC’s manifesto. Instead, lots of empty promises and no concrete proposals.

We know that entrepreneurs are the bedrock of a successful economy. Entrepreneurs take risks, invest their own capital, innovate and employ people.

It is a sad fact that South Africa has too few entrepreneurs and a dearth of formal small and medium enterprises. So, you’d expect the main political parties to be doing all they can to promote and develop entrepreneurs in our society.

Surprise surprise: the DA’s manifesto mentions entrepreneurs 20 times. The ANC’s, 3 times and the EFF’s just once.

Let this sink in for a minute.

Two of the three main parties contesting for power on May 8th hardly give a mention to the key ingredients of an enterprise economy.

But we should not be surprised. The ANC and EFF are both steeped in outdated socialist and Marxist-Leninist state-led ideologies. These have brought nothing but misery wherever they were practiced. Venezuela and Zimbabwe are their idea of economic nirvana.

By contrast, the DA’s record in government in the Western Cape and in DA-run towns and cities points to another scenario for our country. An open economy led by the private sector and supported by government.
The result? the Western Cape created up to 75% of all new jobs in South Africa in 2018.

The DA’s manifesto speaks of unleashing small business. South Africans have enormous potential to innovate and create jobs. They just need to be given a chance.

So, we will introduce an overtly pro-business policy approach with a start-up visa high on our agenda to encourage immigration of entrepreneurs.

We will ease the cost of doing business and promote flexibility by exempting businesses employing up to 250 people from certain BEE and labour regulations. We will follow the lead of the Western Cape which has achieved savings of R1 billion by targeting red tape in government.

We will improve cash flow for SMEs by introducing an amnesty on penalties for non-payment of taxes due to non-payment of invoices, and mandate a maximum 21 days payment time of invoices to government.

We will combine institutions providing financial and non-financial support into single entities and streamline our DFIs. These will leverage government funding of angel investment in start-ups and early-stage businesses.  

We will provide targeted support for micro-enterprises in the informal economy which contributes up to 10% of GDP but is largely ignored by the ANC. A code of good practice and a review of by-laws will ensure a fair business environment alongside foreign traders and large retail chains.

Perhaps most important of all, we will take steps to instil an entrepreneurial mind-set in youth-owned businesses and maximise incentives to start and run a business.

This will include expanding the Centres for Entrepreneurship in townships and rural areas where unemployment is highest.

Support for incubators will depend on their demonstrating measurable growth outcomes and impact rather than just ticking the Enterprise and Supplier development boxes.

Taken together, these measures will give small businesses and entrepreneurs the incentive and impetus to do what they do best: create wealth that generates the taxes needed to fund social expenditure for inclusive growth.

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