Tag: Martin van Staden

Read our exclusive cover story titled A hegemon crumbles! - will the ANC survive after decades of parasitic policies? by Martin van Staden, Deputy Head of Policy Research, South African Institute of Race Relations, plus a host of other topical management articles written by professionals, consultants and academics in the April/May 2023 edition.

No new business can prosper without access to start-up capital, and the regulatory environment must not stand in the way of this process. In other words, South Africa’s economic future is not served by do-gooder statutory restrictions on financing. As such, significant amendments should be made to the National Credit Act, as well as the Banks Act, to ease pressure on small businesses that seek to finance their growth. 

It is particularly costly for small businesses in South Africa to access justice. Without access to justice, these businesses cannot resolve important disputes or see their rights or interests vindicated in a legally recognised fashion. There are certain things Parliament can do to make the courts accessible to small enterprises.

Education has been repeatedly identified as one of the most important ingredients to ending the majority of South Africans’ cycles of poverty. Yet it is the government’s stranglehold over education – which it maintains precisely in the name of “social justice” – that ensures general education retains a poor quality and only contributes to the cycle. South Africa should be a world leader in the liberalisation of education.

While health laws and regulations are always made with the best of intentions, the costs that they represent to the economy – particularly in trying times like today – are unacceptably high. This is especially true for small businesses that must comply with a host of First World standards. It is time to reassess.

South Africa’s labour-law regime is difficult, if not impossible, for small businesses to comply with. It imposes a relatively higher cost on them than on large firms. This leads to fewer people employed in small businesses, and often leads to small businesses not being formalised and therefore certainly not complying with the law.

Despite their ostensibly noble intentions, licensing laws protect incumbent firms by preventing new, small businesses from entering the industry and competing. This is in addition to creating new avenues for corruption, and criminalising ordinary economic activities. South Africa’s licensing regime must be significantly scaled back.

Historical land dispossession has handicapped South Africa’s economic development, particularly of small businesses and small-scale agriculture. This, combined with continued restrictions on subdivision, lack of secure title, and threats to constitutional property rights, impede rapid land reform and economic growth.

South Africa’s tax laws were designed for a high-income society – a result of a long history of the country accommodating a small, wealthy economy, and a large, poor one. But for a country with tens of millions being either unemployed or receiving very little income, being one of the world’s highest-taxed states does not make sense, particularly when small business growth is so crucially important to our economic future.

The South African Constitution envisages public participation in the formulation and adoption of public policy. Government claims to consult the public through the participation process, but recent events have confirmed that it effectively ignores public input and regards it with contempt.