WCG Supports Businesses and Growth by Opposing Cumbersome Business Licensing Bill
The Western Cape Government (WCG) does not support the Draft Business Licensing Bill in its current form. By opposing this Bill, the WCG is protecting jobs and ensuring that businesses operate in an obstacle-free environment that encourages growth.
The legislation proposed by the National Department of Small Business Development is vague, confusing, and unworkable, and fails to establish a uniform national framework for business licensing. The Bill introduces an additional layer of regulation that will increase red tape, duplicate existing compliance processes, and delay business start-up times.
Western Cape Premier, Alan Winde, said, “Legislation like this does nothing to support small business growth and job creation. The latest QLFS showed that 77,000 jobs were created in the WC – this is because the WCG is driving programmes that directly support business growth. We don’t want this compromised by cumbersome national legislation. We oppose this Bill and ask that it be withdrawn and reconsidered.”
Key concerns raised by the WCG include:
- Undermining Job Creation and Growth for Jobs Strategy: Creating jobs is an apex priority for the Western Cape Government. The Bill, in its current form, will undermine the WCG’s Growth for Jobs Strategy, which focuses on reducing barriers to entry, improving ease of doing business, and stimulating economic growth through entrepreneurship and investment.
- Absence of Evidence-Based Policy: No socio-economic impact assessment (SEIA) has been provided, making it impossible to determine whether the Bill’s objectives are supported by evidence.
- Constitutional Issues: The Bill encroaches on municipal and provincial competencies, particularly in areas such as trading regulations and street trading, and contains provisions that are constitutionally impermissible.
- Impact on Municipal Capacity: The Bill imposes significant new responsibilities on municipalities without addressing existing capacity constraints, risking inefficiencies and inconsistent implementation.
- Contradiction of Red Tape Reduction Goals: Nearly all conditions for business licensing are already regulated under existing frameworks. Adding another licensing layer will entrench bureaucracy rather than streamline processes.
Licensing Delays and Economic Impact
Currently, some municipalities are already under pressure to meet legislated timeframes for processing business licences. This is largely due to capacity constraints and administrative inefficiencies. This proposed legislation will only overburden an already strained system by increasing start-up costs and postponing revenue generation, particularly for small businesses that rely on quick market entry to survive.
Minister of Agriculture, Economic Development and Tourism, Ivan Meyer, stated:
“This Bill is a step backward for small business development. Instead of reducing red tape and creating an enabling environment for entrepreneurs, it adds unnecessary bureaucracy that will stifle economic growth and job creation. We call on the National Department to withdraw this Bill and work with provinces and municipalities to develop a streamlined, evidence-based approach that truly supports business.”
The WCG recommends that the Draft Bill be withdrawn and substantially revised to address these issues, and that it be re-circulated for public comment before introduction in Parliament. Instead of creating parallel licensing processes, the focus should be on integrating and streamlining existing regulatory frameworks through a digital, risk-based compliance system that enhances efficiency and supports economic growth.
