SMEs look to Gordhan’s budget to cut red tape

iol news pic Gordhan media briefing Finance Minister Pravin Gordhan. Photo: Siyasanga Mbambani/GCIS

Cape Town – With all eyes focused on next week’s Budget speech to Parliament by Finance Minister Pravin Gordhan, South Africa’s entrepreneurs are hoping for relief in the form of an attack on red tape.

Ben Bierman, chief financial officer at Business Partners Limited, a specialist risk finance company for small and medium sized enterprises (SMEs), said low business confidence levels focused extra interest on next Wednesday’s speech.

Bierman attributed the bruised morale to the sudden removal of Finance Minister Nhlanhla Nene from his post in December, along with a year of load shedding, the worst drought in decades, the weakening rand and the global economic downturn.

Looking forward to next week, he said the question on many business owners’ minds was whether Gordhan would provide the appropriate direction for business, labour and government to unify behind a plan to ensure the much-needed relief.

Bierman believed that he could do so, “albeit within the confines of a very tight budget and severely depleted state resources”.

“Fortunately, one of the most important measures that government can take to boost small business and entrepreneurship – the cutting of bureaucratic red tape – does not entail significant government spending,” he said.

He added that if the recent state-of-the-nation address by President Jacob Zuma was anything to go by, government was aware that bureaucracy was stifling entrepreneurship.

“This is a perennial problem that must be addressed to make small business grow faster. Our plea to government is to look at slashing red tape, and to make sure that the remaining compliance rules that are truly necessary are implemented efficiently, effectively and with quick turnaround times.”

Bierman also suggested that a routine small business impact assessment process be instated to test new regulations for unintended consequences, much like an environmental impact assessment was mandatory for any big development.

Bierman added that he hoped the budget speech would set the tone for a collaborative year between labour, big business, and small business.

“While the budget speech discusses the finances of the country and government spending, it is an important platform from which to send signals that could soften the industrial relations battles in the coming year.

“Wage demands will have to be tempered by a realistic assessment to the extent of strain on the economy. Big business will have to stop using the bargaining council system to erect barriers to entry into their industries against small businesses who can’t afford the high minimum wages.”

Bierman concluded by saying that there was a strong argument to be made for setting aside some money for an emergency fund for deserving small businesses, which would otherwise fail in the difficult year ahead.

African News Agency


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