This article was first published on BBrief on 8 November 2022
Petty “public-health” regulations stall small business growth
While health laws and regulations are always made with the best of intentions, the costs that they represent to the economy – particularly in trying times like today – are unacceptably high. This is especially true for small businesses that must comply with a host of First World standards. It is time to reassess.
This is according to the authors of Laws Affecting Small Business: Health, which is part of a series of research booklets published by the Free Market Foundation. The LASB booklets cover eight areas of government legislation and regulation that harm and hinder the establishment and growth of small enterprises in South Africa.
Regulations that ostensibly protect consumers from unsound food might in fact be doing more harm than good. Human beings, like other animals, have evolved to identify unsound food by smell, taste, and appearance, which stops us from consuming enough of it to do harm.
However, given the presence of well-intentioned regulations, the few instances of food poisoning that do happen are often the result of unsound food being preserved in a way that masks the risk that it poses. Thus, the requirement that food be refrigerated does not stop the growth of harmful bacteria but in fact prevents the food from rotting. This is but one example.
National regulations also specify exactly how large windows must be, and how many latrines, urinal stalls, and washbasins there must be at eatery premises. Regulations also require hand-washing facilities and compel those involved in handling food to wash their hands after using the toilet. While these might seem like benign regulations, such requirements are often prohibitive for small businesses, leading to widespread disobedience. And in the case of the handwashing requirement: it is completely unenforceable and therefore ineffective.
The absence of these laws and regulations will not leave consumers unprotected. On the contrary, the common law is always applicable and often offers more appropriate protection for public health. In fact, regulations often create a false sense of security among consumers who assume small businesses are complying with national standards, when in fact they cannot afford to. Simply because a regulation says the person handling your food must wash their hands does not mean that it was in fact done.
As such, the authors argue that guidance, education, and training should be the mandate of health inspectors, not enforcement or punishment. There must be a focus on general hygiene, rather than a mechanical implementation of often arbitrary standards specifying the size of windows.
Liquor regulations have also been harmful toward small business development. Provincial liquor laws prohibit stores from selling alcohol between certain times. And, of course, we all recall similar, even stricter regulations during the COVID-19 lockdown that were disastrous for the industry.
While these regulations may appease the temperance movement, they do not, in fact, curb excessive drinking, as binge-drinkers simply hoard alcohol before closing times.
Furthermore, in a uniquely South African quirk, grocery stores are allowed to sell wine but no other forms of liquor. Similarly, liquor stores are prohibited from selling anything other than liquor, cigarettes, and other drinks. The idea, clearly, is to “protect” consumers from being tempted into buying alcohol while shopping for other goods.
Those of us living in the real world, however, understand that alcohol abuse does not work like that. Alcohol abusers do not allow costly regulations like these to stop them from acquiring their fix.
Ineffective regulations like these are simply an added cost for small liquor stores, and an inconvenience to the public that do not in fact achieve their aims. They should be repealed.
Let us not forget about the prohibitions on smoking in “public places” under the Tobacco Products Control Act and the new bill intended to replace it.
A “public place” includes private property on which the owner is willing to allow people to smoke, including offices, malls, and shops. Employees and consumers have to be sent to designated smoking areas.
Writing as a teetotaler myself, few things are as annoying as the obnoxious smell of second-hand smoke. However, the government’s desire to “protect” the public does have costly implications that cost the economy productivity (employees being far away from their desks for “smoke breaks”), and cost consumers time.
The slippery slope of consumer lifestyle regulation is also acutely dangerous to freedom generally. We might not like people smoking near us, but the fact that we happily let them be regulated means we, in turn, are regulated in the future, for instance by being forced to consume less sugar or meat. Foresight is crucial when observing trends in public policy.
If the repeal of the laws and regulations mentioned above is not possible, argues the LASB authors, they must be substantially relaxed.
These are only a few of the observations and recommendations made in the LASB: Health. Others relate to regulations applicable to small hotels, abattoirs, and childcare facilities.
The LASB booklets represent one-third of the Free Market Foundation’s book, Radical Economic Transformation: The Legal Route to Economic Freedom, which proposes a comprehensive reform package that will get the South African economy prospering.
As consumers are feeling the pinch of price inflation in their pockets now more than ever, it is high-time that those regulations and policies that drive costs up for small businesses be reconsidered.