Online Reporter
THE Second Republic is delivering on many economic aspects and this week Cabinet went into considerable detail over the sort of cuts and consolidation needed in the licences for the wholesale and retail sectors.
Besides looking at each required licence, and in a handful of cases it was found that the original reason no longer made sense or had been overtaken by events so the licence could simply be dumped, a lot of the required clean up is consolidating and amalgamating licences.
Very often we needed to go back to the original reasons and had to retain the need to protect the safety and health of customers in the wholesale and retail sectors, but without having to mobilise an army of inspectors operating under a swathe of different regulations, when it is perfectly obvious that a single inspector working under a single licence can make sure that a retailer is not harming their customers.
It is also fairly obvious that some licences put in place to limit use of scarcer raw materials or to limit competition by letting those already in business have an extra advantage by keeping out newcomers or making it expensive to enter the business, those now go.
We suspect that if you dig deep enough, there might even be remnants of colonial-era fees designed to maintain strange racial quotas, although these would have been sanitised over the decades, but the quotas still remaining.
Businesses are not getting the option to pick and choose which licences they want to keep and the Government is taking everyone at their word that they want the simplest possible functional licencing regime with fees set at the minimum levels that will pay for enforcement.
The huge range in some licence fees drew attention from the Cabinet.
While fees are needed so that taxpayers and ratepayers are not being charged with the cost of making sure some dishonest shopkeeper is selling rotten food or short weight, it is difficult to understand why some local authorities needed to charge 10 or even 100 times as much as others.
In any case, it is unfair on the honest shopkeepers to charge them vast sums when so much modern practice allows recovery through fines and penalties of the extra money and tests needed to deal with the dishonest and make sure that they conform to the basic health and safety standards.
We still need to enforce these standards but the dishonest should be the ones making most of the payments while licencing of the honest and law abiding who actually care about customer safety is largely so that they are on the lists and can be checked out.
Local authorities need to think about how they make their money, and again modern practice is that users of services pay, but only what is required, with money making schemes largely banned in favour of cost recovery.
We are seeing this switch over in new ways of supplying water, and we would assume that garbage collection is likely to go the same way.
The residue of services that have to come from a common fund are those approved by ratepayers when councils present their budgets and property taxes, and here everything has to be right out in the open making it perfectly clear who is paying what.
Some of the special licences must have had a reason when introduced, such as the US$703 licence for operating a bakery, but what it was has been lost in the depths of time.
That licence, incidentally, now goes although we assume bakeries will still fall under general health regulations and bakers who offer substandard or unsafe products will be paying significantly more in fines and penalties, as well as perhaps being padlocked shut, but without stopping honest and respectable people opening a business.
This baker’s licence is just an example of the vast range of special licences once in place when every business was a small shop and explains why even a modest general store, let alone a supermarket, needs a huge file of licences instead of just one.
We have moved beyond the 1920s. We probably still need to have some differences in some licences, since a little shop, a legalised tuckshop, does not need the sort of large general licence of a major supermarket, but differences can be on cash flow and income.
In any case, keeping licence fees low and affordable for all businesses will move competition to where it belongs, in the service offered.
It is not the Government’s job to decide what businesses should succeed or fail, and except for giving preference to citizens in a range of areas, the main function is that everyone has the same clear and obvious rules.
The huge range in fees for a liquor licence appear to have been driven by a desire some decades ago to control liquor sales more completely.
But the whole licencing system is designed to do that and what is important is that all holders of a say a bottle store licence do not sell for drinking on the pavement and those with bar licences have proper sanitary facilities and ways to ensure customers behave.
This is done by other ways than charging huge fees, and instead relies on enforcement of rules.
The clean up of the whole retail and wholesale licencing regime will not just benefit existing licence holders and make investment decisions more rational, It will also help regularise the sectors, converting those tuckshops and little shops into proper businesses able to pay a modest licence fee and coming under the explicit rules of their business sector.
Tuckshops have, with some validity, argue that the fees to regularise are very high. Once the new fee structures have been sorted out and gazetted, there will be no excuse, and if a new small business run by a citizen needs to spend a few dollars on the required single licence, be listed for the health inspector and generally follow the rules, then we can all win with a safer as well as a cheaper business environment.
Peter Tanyanyiwa