The Red Tape Reduction Unit makes it easier for businesses to thrive in the Western Cape, by growing the economy and creating more jobs.
The amount of red tape and bureaucracy faced by businesses when dealing with government restricts economic development and growth. Creating an enabling environment for business is, therefore, fundamental to creating a competitive economy.
Research shows that red tape costs South Africans R79 billion per year. This is equivalent to 6,5% of GDP, or 16,5% of the total wage bill in 2003 (Small Business Project (SBP) 2005).
Red tape is defined as:
- Non-essential procedures, forms, licences, and regulations that add to the cost of dealing with government; or
- Anything obsolete, redundant, wasteful or confusing that diminishes the competitiveness of the province, which stands in the way of economic growth and job creation or wastes taxpayers’ time and money.
The Red Tape Reduction Unit was established by The Western Cape Department of Economic Development and Tourism (DEDAT) in 2011. Its main objective was to remove bureaucratic blockages to make it easier and more cost-effective to do business in the Western Cape. The Unit follows a two-pronged approach in tackling bottlenecks in the business environment:
- Reactive through its response to cases lodged to the unit; and
- Proactive, which seeks to identify legislation and processes that represent barriers to business or efficiency in government and designing interventions that cut across an entire industry sector or several processes.
The outcome of the interventions must impact on the cost of doing business in terms of reducing either time, costs or complexity. To date, the unit has dealt with almost 8 000 business and red tape related matters. It maintains a resolution rate in excess of its 85% target.
The WCG made Regulatory Impact Assessments (RIAs) standard practice for new policy and legislation. Cabinet has approved it as a mandatory requirement for all significant legislation and policies. It is the first and only province to elevate RIA to this level.
The Red Tape Reduction Unit has partnered with sister departments to improve business-facing processes. This benefits business process improvement (BPI) projects, such as the Department of Transport and Public Works (tourism signage and abnormal load permit applications) and Agriculture (export related processes, permit applications and auditing). Several BPI project possibilities with national departments are being explored as well.
The potential for making it easier, cheaper and faster to do business in the province is huge, considering the many approvals, licences and authorisations that businesses need to operate.
The Red Tape Reduction Unit’s intervention in the Franschhoek Wine Tram’s success story not only impacted their future of doing business and expanding but ensured economic growth and job creation for the entire Franschhoek Valley, including more than 20 wine farms. Brett Garner, Franschhoek Wine Tram’s General Manager, explains that the Red Tape Reduction Unit has assisted them twice over the past five years.
“When we started the Wine Tram in 2012, it was quite a novel idea to have a tram on a railway track. As we also have a hop-on-hop-off bus service to get our guests to and from the tram and the various wine estates, the Department of Transport characterised us as a charter service. As such we were under pressure to clear hurdles that we simply could not. For example, as a hop-on-hop-off service, we could not generate a passenger manifest or guest list, but we were required to do so.”
This placed the Wine Tram at odds with local officials. “The owners contacted the Red Tape Reduction Unit and they helped to get the Department of Transport on the same page as us and amend our accreditation. We were also able to have our inspections done on site,” explains Brett. The business quickly expanded and today the Franschhoek Wine Tram visits 22 wine estates and has ten road vehicles and three railway trams.
Brett believes that if the Red Tape Reduction Unit had not intervened, it would have had a negative impact on job creation and tourist numbers. The Franschhoek Wine Tram service has expanded from taking a maximum of 40 people per day when the service was first launched in 2012, to taking up to 540 people per day after the most recent expansion. “We now have 55 employees, with the vast majority coming from Franschhoek,” says Brett.
“The impact of the Franschhoek Wine Tram on job creation and local investment is magnified when you consider that each of the wine farms we visit has either made changes, built infrastructure or brought in additional human capital to ensure a better offering. Something we should not undervalue, and where the Red Tape Reduction Unit has greatly assisted us, is the international drawcard the wine tram has become”, explains Brett.