Chairperson, hon Minister, Deputy Minister, colleagues and guests, allow me to focus on Programme 5: Consumer and Corporate Regulation Division. The regulatory regime for industry is important when we have an unemployment rate as high as ours in South Africa. Government owes its citizens good governance, which includes the creation and maintenance of a regulatory and policy environment that is conducive to sound business decision-making.
Part of this trajectory is a stable environment that is marked by regulatory certainty in which firms can flourish and provide jobs, and the goods and services the people expect of them. Is this what obtains in South Africa? Achieving this is the core mandate of the Department of Trade and Industry.
Firstly, it is worrisome that we are one of the most regulated countries in the world. A recent World Bank Doing Business report placed South Africa halfway down a list of 141 countries that were measured. Zimbabwe was last on this list. The report says that higher regulatory costs are associated with more poverty, larger informal sectors, higher unemployment, lower productivity, longer delays, more corruption, and so on.
Small firms are worst affected by red tape and taxation, which detracts from their ability to carry out their vitally important functions in the economy, such as job creation. In most countries, small firms are the job creators - the employers of young and old, unskilled and otherwise handicapped individuals. They teach skills to the unskilled on the job and provide experience that is essential to increased employment opportunities.
A rapidly growing economy that creates wealth and raises everyone's average income will always be lightly regulated. Excessive regulation is, without doubt, the reason why South Africa's small firms produce a relatively lower level of GDP than other countries. It is also one of the reasons why we have one of the highest rates of unemployment in the world.
The Economic Freedom of the World's annual report in 2010 rated South Africa, using 2008 data, at 6,65 for a ranking of 82nd in the world. This is South Africa's lowest rating in over 10 years, and suggests a downward trend from the peak in the 2002 data. The threat of a retreat from economic freedom in South Africa is not a call to panic, but a call to action.
The Department of Trade and Industry is at the epicentre of this regulatory framework. We are not convinced that the department is succeeding in achieving its mandate to develop and implement coherent, predictable and transparent regulatory solutions that facilitate easy access to redress and to efficient regulation for economic citizens.
Turning to the current state of regulation, our case in point is that the Companies and Intellectual Property Registration Office, Cipro, now called the Companies and Intellectual Property Commission, is in shambles. This has a negative impact on our economic growth and on how we nurture small businesses which are critical for economic growth and which, by extension, lower unemployment rates. One of the duties that is expected to be done is the transfer of properties which are registered within a company when it changes ownership. This simple action should take a day, but currently that is not the case.
Just recently it was reported that thousands of close corporations were being deregistered by Cipro for failing to submit their yearly returns and details. We are inundated with complaints from the public complaining about the poor service they get from Cipro.
Now government not only creates a cumbersome regulatory framework for businesses to operate, but also makes it impossible for businesses to adhere to these regulations through the sheer ineptitude of government institutions like Cipro. This comes swiftly after another scandalous case of impunity in which company hijackers could hack companies registered with Cipro owing to its defective IT system. Is the Department of Trade and Industry succeeding in achieving efficiency of institutions under it like Cipro? It does not look like it.
The National Lotteries Board, the NLB, is also failing to meet its mandate. A study entitled "Meeting Their Mandates? The research report on the National Lottery Distribution Trust Fund" found that the NLDTF has distributed less than 50% of the available funds in each of the past three financial years. This is as unacceptable as it is painful. Many HIV and Aids hospices, orphanages and youth development groups are not getting any form of assistance from the NLDTF at a time when it is much needed. But when the ANC Youth League, masquerading as the National Youth Development Agency, wants R40 million for a drinking spree with youths from backward countries, the red tape is cut, and money is made available. We must truly question the ability of the NLB to optimally channel the benefits to worthy beneficiaries.
We also need to take note that the National Youth Development Agency, NYDA, has failed to meet its mandate in respect of, one, disbursing funds to CSOs - civil society organisations - for poverty alleviation activities; and two, relations between state and civil society through consultation dialogue. The key reason is that the NYDA focused on the practice of grant making. The number of beneficiaries decreased from 104 in 2005-06, to 59 in 2009, but the total amount of money granted increased.
The DA consequently supports the Medium-Term Expenditure Framework objective of improving lottery governance and reviewing the Lotteries Act to ensure a better distribution of lottery funds for the betterment of our people. Thank you. [Time expired.] [Applause.]