Business losing patience with sloppy, costly legislation

Source: The Times, 03/02/2016

The folly of parliament passing poorly drafted legislation has cost
thousands of jobs, seen state entities lose billions and caused both a
run on pensions and a huge decline in international visitors.


Now the state wants to dilute even further vital regulation impact
assessments with a new assessment that places ''national security and
social cohesion'' above the economy and jobs.


South African business leaders in Johannesburg yesterday criticised
the government over a lack of transparency of controversial bills that
had huge economic impacts.


At the SA Chamber of Commerce and Industry, the Black Business
Council, Small Business Project and Tourism Business Council
criticised the government over its apathy in ensuring that
internationally recognised Regulatory Impact Assessments were done on
proposed legislation, bills and passed laws.


RIAs are designed to improve regulatory efficiency, looking at, among
others, the effect of proposed legislation on economic growth, job
creation and equality. They are conducted by economic companies
contracted by industry and government.


The criticism comes after the World Bank's Economic Update report,
released yesterday, spelt more bad news for the country, forecasting
GDP growth of 0.8% for 2016, down from 1.3% in 2015 and the lowest
growth rate since 2009.


It follows similar projections by the IMF of 0.7% GDP growth.


With a raft of controversial bills, including the Promotion and
Protection of Investment Bill, Expropriation Bill and Private Security
Industry Regulation Bill about to be passed, critics are calling for a
thorough examination of their potential impact.


The RIAs are, says Chris Darroll, Small Business Project CEO, being
phased out in favour of socio-economic impact assessments.


The new assessments follow the government's announcement that a
committee, headed by former president Kgalema Motlanthe, would review
previously passed laws.


Darroll said RIAs help underpin the government's capacity to
effectively implement laws.


"Very little is known about these new assessments and how they will be
implemented."


Darroll said implementing regulatory oversight half-heartedly, or
testing laws retrospectively, was never going to be as powerful as
"ensuring that every piece of potentially contentious legislation is
scrutinised through the lens of a thorough, quality, rigorous and
internationally recognised RIA.


"By firmly institutionalising proper oversight over policy-making
processes we can restore investor confidence."


Proper evidence, she said, was key to unpacking the need for and
developing policy.


"Evidence ensures we are not adding unnecessary bureaucracy for both
the private and public sectors. It ensures laws are enforceable, don't
disrupt service delivery or increase the burden of red tape,
especially for small business."


Zuma's economic adviser, Bheki Mfeka, failed to respond to e-mailed
questions on the socioeconomic impact assessments.


Laws that drew condemnation from the briefing were the government's
Immigration Act and Visa Regulations, which required children
travelling to and from the country to have unabridged birth
certificates with visa applicants having to apply in person at a South
African embassy for biometric processing. The new Tax Laws Amendment
Act, signed into law last month by Zuma, also came under fire. It will
require compulsory annuitisation of two-thirds of provident fund
savings on retirement.


Mavuso Msimang, Tourism Business Council chairman, said the visa
regulations issue would have cost the South African economy
R2.6-billion last year and 5800 jobs, with airline data showing a 40%
decline in children travelling to South Africa and ticket sales down
20%. "Only after extensive engagements, widespread pressure from
stakeholders and media attention was a commission established to
investigate the regulations' impact.


"This investigation saw the rescinding of the biometric requirements
and limiting the need for unabridged birth certificates to South
African citizens.


"All of this took time, money and energy which could have been better
invested in growing our tourism sector and creating jobs.


"Had a proper RIA been conducted ahead of the regulations development,
these unintended consequences would have been avoided."
On the tax amendment legislation, Black Business Council CEO Mohale
Ralebitso said while the amendments were drafted with good intent,
government, by signing the Act into law, could have unintentionally
created negative consequences.