TOBY CHANCE AND MLONDI MDLULI: There must be room to test new ideas in trade department

Business Leadership SA (BLSA) CEO Busi Mavuso has offered the new trade, industry & competition minister and his deputies a clear road map for reform in a department that is central to economic growth, while also echoing many of the DA’s positions (“What business wants from Parks Tau’s department,” July 31). 

These include reducing the cost of doing business and the compliance burden, boosting exports, greater interdepartmental co-operation, tackling exchange control regulations, fighting crime and addressing logistics blockages as well as skills shortages. 

We welcome these proposals. As MPs, in collaboration with business and other social partners, we must ensure that they come to fruition through effective oversight. While the DA now forms part of government, as DA parliamentarians we retain our responsibility to hold the government to account.  

As the department begins these reforms, much of the heavy lifting will occur in the corridors of parliament through committee work and robust debates. We must capitalise on this opportunity the electorate has presented to us. No longer should parliament be a rubber stamp for the executive.  

In the coming five years, here is some of what we hope to see from the department of trade, industry & competition: 

• Establishing better communication channels with all sectors of business; 
• Ensuring optimal performance of a large department;
• Evidence-based decision-making; and
• Boosting competitiveness through pragmatism and responsible experimentation 

Communication channels

The government has established structures giving big business direct lines of communication with policy formulation and implementation. The National Economic Development and Labour Council (Nedlac) is the principal negotiating forum between the government, business, unions and civil society, though its failure to conclude the social compact promised by President Cyril Ramaphosa has strained relations between the partners.

Nedlac, as well as BLSA and Business for SA, will play an important role in the national dialogue initiated as part of the government of national unity.

SA’s biggest companies, employing about 40% of the workforce, have an easy ride compared with the hundreds of thousands of SMMEs that employ another 40%, with the other stakeholders being state-owned enterprises and NGOs. All sectors of business must have a level playing field, which the department must seek to ensure.

That said, as MPs we also have the responsibility of listening to our constituents and bringing their concerns, ideas and experiences to parliament and government, where they should get a thorough airing. We must diligently scrutinise annual performance plans, strategies, budgets and audit reports of the department and its reporting entities. In our oversight we must highlight good performance, and where we uncover poor performance act swiftly via our parliamentary powers, as well as via institutions such as our courts, the auditor-general and the public protector. 

Optimal performance 

Trade, industry & competition is one of government’s largest departments, with several entities reporting to it. These include development finance institutions such as the Industrial Development Corporation and National Empowerment Fund; technical infrastructure institutions such as the SA Bureau of Standards; as well as regulators such as the Competition Commission, the National Lotteries Commission and the National Gambling Board.

While some of department’s entities work well, others — such as the lotteries commission and gambling board — have bad track records. The department must ensure that these entities and their staff are capable, corruption-free and committed. As MPs, our oversight responsibilities include ensuring that taxpayer/government resources are used optimally to provide quality standards for all in our economy, rather than at the whims of the government of the day or the vested interests of big players, including unions. 

Decision-making 

As MPs we are often approached by business owners seeking solutions to problems that sit at the government’s door. Addressing these requires apolitical, pragmatic, evidence-based policymaking — that is, drafting legislation and regulations that emanate from actual experiences from those operating at the front line. It requires the cabinet to re-examine the negative effects legislation from one department has on the stakeholders of another. 

Influential business lobby groups mostly represent some of our larger companies, while smaller companies (which together play a large role) have less of an influence. A case in point is the legislative arrangement in the Labour Relations Act, within the context of bargaining councils, which favours large businesses (employing large numbers of employees) in terms of decision-making regarding wages and other conditions of employment. In the steel sector, to mention one, this has enabled a small minority of businesses with large workforces to dictate the outcome of wage negotiations to the detriment of 95% of employers in the sector. 

As a result of steel import duties, and protecting SA’s only primary steel producer, the entire downstream steel sector bears the burden of uncompetitive raw material costs, which has further contributed to the deindustrialisation and consequently increased unemployment. 

Competitiveness 

There is a direct linkage between uncompetitiveness in this and other sectors and the alarming decline in manufacturing’s contribution to GDP from 23% to 13% in two decades. Reversing this requires the department, collaborating across government, to craft comprehensive programmes that boost our productivity and the competitiveness of our industries. Operation Vulindlela, in its successful track record thus far, provides the department with a good template. 

That said, while evidence-based decision-making is imperative, there must also be room to test new ideas. An idea the DA has proposed is for one or more of the 11 special economic zones (SEZs) to be declared regulation-free for a period, acting as test beds for a new approach to industrial policy. Removing restrictive broad-based BEE procurement, labour and bylaw requirements, while maintaining tax and other non-tariff incentives and protecting basic worker rights, would enable us to compare rates of investment, enterprise and job creation with the rest of the country. If the evidence shows positive outcomes, pragmatism suggests these new ideas should be applied more widely.  

As DA MPs in the trade, industry & competition portfolio we will endeavour to bring freshness, urgency and accountability into another key role-player in the economy.  

We look forward to balancing constructive dialogue with fellow MPs, big business, lobbyists, SMMEs and unions with our oversight of government in ensuring the prosperity of all South Africans. We must continue with the positive spirit in which the seventh parliament has begun its work, doing so in action by accelerating structural reforms, boosting business confidence and growing an inclusive economy.  

• The authors are DA spokespersons on trade, industry & competition