Arriving in Parliament with a succulent plant, Finance Minister Tito Mboweni last week used it to emphasise that ‘it is time for us to sow a seed of renewal and growth… despite our best efforts, ravages and risks such as pests or rot could attack our green shoots, But we must persevere… prune and pluck away at the rot, until there is growth.’
Whilst there are varying views on this year’s budget speech, business in general is welcoming the seriousness with which both Finance Minister Tito Mboweni and President Cyril Ramaphosa have committed to turning our economy around. With the local economy struggling to grow at a rate faster than consumer inflation, the Eskom debacle and a general election around the corner, one can understand the apprehension of both individuals and businesses on South Africa’s future.
Quoted in Fin24, The Small Business Institute (SBI) called for an audit of government’s overall financial support from all departments with programmes assisting small business in South Africa to assess which are failing to achieve targets and better guide priority fiscal allocation for those that are succeeding. They are also calling for a review of tax implications for SMMEs – from tax compliance issues which burden SMMEs including simplifying the code in respect of their obligations. Raising finance and setting up specialist services to assist small businesses in managing their businesses, bolstering leadership and managerial skills is another area that will benefit all business sectors.
FASA members Business Partners have dissected the budget speech, trying to identify any silver linings that were identified that would help small businesses. Ben Bierman, MD of Business Partners cites government’s intention to bring the cost of data down as one of the key benefits in driving economic and SME growth as we head into the 4th Revolution. The knock-on effects for job creation in the SME sector as a result of increased national infrastructure spend is another plus as is the R19,8 billion allocated to industrial business incentives. Redressing and relaxing the visa restrictions that impacted our tourism industry over the past few years will go a long way to reviving tourism and boost businesses operating both directly and indirectly in that space.
The R19,8 billion allocated to industrial business incentives and the R600 million assigned to the clothing and textile competitiveness programme is a much needed boost and will be a driver of economic growth.
The allocation of R3,2 billion to operationalise the small business and innovation fund will go a long way to stimulate the country’s entrepreneurial eco-system and contribute to the creation of more innovative businesses.
Also noteworthy is the R481,6 million allocated to the Small Enterprise Development Agency’s incubation programme expected to bolster the creation of new businesses and survival rate of existing businesses.