BEE polarises SA - letter to Business Day

On Thursday Business Day published my letter headlined "BEE polarises SA" - read it below or on BDFM here.

Let me know what you think. The DA is submitting our response to the new BEE codes and we need your input.

Is it time BEE was phased out completely, or do we need new ways of redressing the inequities of the past that also incentivise the creation of new businesses and jobs? This is an important debate that will not go away.

"Last Friday, I was a panellist at the SiMODiSA Start Up SA conference in Cape Town where several hundred representatives of SA’s “entrepreneurial ecosystem” gathered. 

We listened to pitches from aspirant entrepreneurs. At least four were delivered by two people — one black and one white. Assuming they hold a 50-50 stake in their business, under the new Broad-Based Black Economic Empowerment (BEE) codes, they would get a Level 4 rating. If the black entrepreneur shed his white partner, however, he would get a Level 1 rating, leaving his former partner with a Level 5 rating at best.

It would be hard to imagine a more perverse and socially polarising piece of legislation. Everyone I spoke to, of whatever hue, strongly believed the BEE regime in SA had to change. The African National Congress simply does not get entrepreneurship."

Toby Chance, MP

Democratic Alliance shadow minister for small business development

Appearance on the Classic Business Panel: The Small Business Debate

Yesterday I was on the panel in the Small Business Debate on Classic FM hosted by Michael Avery. Co-panellists were Leon Louw, Executive Director of the Free Market Foundation, and Stiaan Klue, Member of the SMME Policy Colloquium Committee and CEO of the SA Institute of Tax Practitioners. 

We had a lively debate which focused on the performance of the Department of Small Development and the government's attitude to small business in general. Most of our comments were critical, thoughwe all expressed our belief that this was a vital area for South Africa to get right if we are to create the jobs the country needs.

You can listen to the podcast here - scroll down to Segment 9 at the bottom of the page and click on the link.

Press Statement on BEE Codes of Practice

Democratic Alliance joint press statement by
 

Geordin Hill Lewis MP
DA Shadow Minister of Trade and Industry, and
Toby Chance MP
DA Shadow Minister of Small Business Development

DA will make extensive submissions to amend BEE Codes of Practice

14 October 2014

Release: immediate

The Democratic Alliance notes the release of the draft BBBEE Codes of Good Practice by the Minister of Trade and Industry, Rob Davies, for public comment. 

The DA will submit extensive proposed amendments to the Codes, during the public comment period which ends on 14 November 2014.

The Codes, as they are currently drafted, will not achieve the stated objective of preventing fronting. They do not promote redress or decrease inequality, and they certainly do not help to grow the economy or create jobs. In fact, in many respects, they will achieve the opposite of what the ANC says they want to achieve. 

New B-BBEE codes will hurt small business

Today's Business Day carries an article about the revised Broad-Based Black Economic Empowerment Codes of Good Practice for Exempted and Qualifying Small Enterprises which quotes me extensively - read it here.

My point can be summed up thus: the DTI is obsessed with remodelling the racial composition of the cake, while the Department of Small Business Development is (or should be) interested in growing the size of the cake. These aims inevitably come into conflict.

As I point out, a 50/50 partnership in a new business between a black and a white person would give it a level 4 rating. This is crazy! Surely we should be encouraging start-up businesses whatever the colour of their founders.

Opinion piece in the Financial Mail - Leadership required for our entrepreneurial ecosystem to thrive

This article appears in this week's edition of the Financial Mail - read it here in the magazine or below.

 

The formation of the Small Business Development ministry has focused the minds of everyone concerned about South Africa’s weak economic growth and the role small and medium enterprises (SMEs) have in revving it up.  

A buzzword gaining traction in small business development circles is the “entrepreneurial ecosystem.” By this is meant the totality of activities, enablers, conditions, stakeholders and incentives that make up the environment in which entrepreneurialism can exist and thrive. By all accounts the ecosystem in South Africa is under-developed, fragmented and lacking leadership. 

Press statement: DA launches drive to show E-tolls impact on Gauteng businesses

DA launches drive to show E-tolls impact on Gauteng businesses

 

08 October 2014

Release: immediate

 

The DA today launches a drive to give business owners in Gauteng a voice against E-tolls.

 

Owners of small, medium and large enterprises in Gauteng are encouraged to send us breakdowns of their E-toll bills as part of phase one.

 

All information gathered in this drive will be compiled into a report on the impact of E-tolling on businesses in the province.

 

The DA will use this report to continue the fight against E-tolls on behalf of businesses, and all residents of Gauteng. 

Letter to Minister Jeff Radebe re the turf war hampering Small Business Development department

Below is the text of the letter I sent to Minister in the Presidency Jeff Radebe requesting him to intervene in the turf war between the Departments of Small Business Development, Trade & Industry and Economic Development.

The Honourable Jeff Radebe MP

Minister in the Presidency

Union Buildings
Private Bag X1000
Pretoria,
0001    

29^th September 2014

 

Dear Minister Radebe 

Problems facing the establishment of the Department of Small Business Development

On Thursday and Friday last week the Portfolio Committee on Small Business Development held a strategic workshop where the Ministry and Department presented their vision and plans and the committee members interrogated them. 

Of concern to me is that there appears to be a turf war developing between this department and the Departments of Trade & Industry and Economic Development over where certain functions should sit. The Acting Director General, Ms Pumla Ncapayi, reported to the Committee that the DED is intent on retaining control of the Small Enterprise Finance Agency, while the DTI is of the same view with regard to the Incubator Support Programme. 

I am sure you will agree with me that these two functions – finance and incubation for small businesses – sit squarely within the remit of Small Business Development. Now that the President has created this department it would be odd to say the least if it were not fully capacitated to do its job. 

There is multi-party agreement that small businesses will create the majority of the 11 million jobs we need by 2030, as outlined in the National Development Plan. Minister Zulu cannot be expected to play her part in facilitating this process of job creation if she is shackled from the start. 

I am therefore appealing to you to intervene and find a settlement between the three ministries so they can get on with the important work ahead without delay. The Portfolio Committee is unanimous on this matter and I am sure the Chairperson, the Honourable Ruth Bhengu MP, will be taking it up through appropriate ANC structures as well. 

I look forward to your response. 

Yours sincerely 

Toby Chance MP
Shadow Minister for Small Business Development

CC
The Honourable Lindiwe Zulu, MP
The Honourable Ruth Bhengu, MP