Keeping the Department in Check

Small Business Department breaks the law and deprives Small Business

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Protector for noncompliance with the SME Act.

The minister has not appointed the National Small Business Advisory Council (NSBAC) as required in the SME Act. Notwithstanding #SASMEF having raised the matter with the Minister and the department and reporting the matter to the Parliamentary Portfolio Committee on Small Business since 2015, The Minister and DG of the DSBD has remained non-compliant.

In February 2017, The DG made a report to the Portfolio Committee on the matter outlining a process that began in August 2015. The report concluded that by 15 May 2017, the National Small business Council, quote “commence with its activities in the new financial year”.  This dead line has passed.

Based on the SME act, SME has been deprived of the following

  1. Input on Strategies to address and identified market failures
  2. Consultation on the impact of current and new legislation on small business;
  3. Consultation on national standards pertaining to small business development
  4.  Input on measures to ensure the creation of physical business infrastructure through viable business sites
  5. Consultation the development of skills in all aspects of running a business;
  6. Inclusion on steps to be taken to create access for small business into value chains;
  7.  Consultation on constraints affecting the viability of the small business community;
  8. Input on methods to liaise with the small business community to identify their needs;

The Department of Small Business is about to submit Budgets and Strategies for 2018/2019 financial year without the advice of the NSBAC. This presents a threat to good governance.

The writers of the SME ACT are emphatic that the appointment of the NSBAC should be in line and compatible with the National Small Business Support Strategy (white paper) and the constitution.

Both documents take up the theme of building an inclusive consultative government that values SME as an equal role player in the economy. The NSBAC is seen as a vital tool for the transformation to an inclusive economy.

The non-appointment of the NSABC disempowers the SME community and subverts good governance and accountability in relation to R3 billion tax payers money intended to SME upliftment.

Both Constitution and the white paper take up the theme of building an inclusive consultative government that values SME as vital role player in the economy. Hence the NSBAC is seen as an important tool for the transformation to an inclusive economy, the creation of an enabling environment for SME and the bridging structural fault lines in the economy.

Recently it was announced that the #EU will contribute substantial amounts for the development of SME. Without a constitutionally compliant Small business Department, it is questionable how these funds will be used without the Small Business Advisory Council oversight to ensure that the funds benefit SME.