Director-general in the Department of Trade and Industry Lionel October. Picture: TREVOR SAMSON
Director-general in the Department of Trade and Industry Lionel October. Picture: TREVOR SAMSON

A study to evaluate business incentives offered by all government departments has recommended the establishment of an inter-governmental co-ordination committee.

According to a cabinet statement on Friday, the study assessed how the incentive system as a whole was working to support business and benefit society.

“The government uses a wide range of incentives to encourage firms to act or invest in specific activities or contribute to certain social or economic outcomes. The report identifies overlaps and complementaries in various business incentives. It recommends, among others, the establishment of an intergovernmental incentive co-ordination committee,” the cabinet statement said.

According to department of trade and industry director-general Lionel October, the study examined the complete range of government incentives offered by his department as well as departments such as agriculture, transport, land reform, small business, and co-operative governance. He said his department's incentives had been found to be very effective and well managed.

He said the evaluation found that there was a lack of co-ordination between the range of government incentives. "It was the first attempt to give some coherence to these incentives and arrive at a common methodology for them," October said. He did not anticipate that the study would result in any immediate short -term changes.

The next step would be to establish an overriding framework for the incentives and to streamline them.

An evaluation of the effectiveness of the government's integrated strategy to promote entrepreneurship and small enterprises was also conducted. The strategy, approved in 2005, focuses on job creation, equity and access to markets.

"The proposed improvement plan includes improvement, co-ordination and rationalisation across all spheres of government and strengthen institutional governance and oversight," the statement said. 

ensorl@businesslive.co.za