Business owners would do well to pay close attention to the budget speech as the outcome will have an impact on the operating environment for all businesses.
This is the advice of Heather Lowe, head of Enterprise Development at FNB Business.
This year in particular, Lowe says there are key areas that will be touched on by Finance Minister Nhlanhla Nene
when he gives he gives the budget speech later this month, that business owners need to focus on.
“Over the years, significant regulatory amendments have been made during the Budget Speech; therefore, every
small business owner should make time to familiarise with the contents of the National Budget.”
The two crucial SME focus areas are funding allocation for the Small Business Development, and updates on the National Development Plan (NDP).
The ministry which was established in May 2014 under the helm of minister Lindiwe Zulu, was not allocated funding in the medium-term budget in October and was relying on the Department of Trade and Industry.
According to Lowe, entrepreneurs should also listen closely to what the minister will say regarding the NDP as the plan hopes that 90% of jobs will be created by small and medium businesses by the year 2030.
“SMEs should be keen to hear whether National Treasury will influence the procurement of services in the public sector”
From procurement and tax to infrastructure, here are Lowes’ key areas that SMEs owners should pay attention to.
1. Funding for Ministry of Small Business Development
SMEs should be interested in understanding how the Ministry of Small Development will be funded or capitalised to meet the needs of the SME sector. More importantly, to see if there are any direct incentives for their businesses .
2. Tax Policy
The SA Government is currently on a drive to boost small businesses and one of the key focus areas is the country’s tax policy. Over the years, we have seen numerous reforms to minimise the tax burden on SMEs. Therefore, this should be a key area of interest for small businesses. It will be interesting to see whether processes such acquiring a tax certificate will be simplified in addition to other possible concessions.
3. National Development Plan (NDP) updates
The NDP is earmarked as the blue-print for South Africa’s economic development and SMEs are an integral part of the plan. NDP’s decisions and its roll-out could have a direct impact on SMEs across a number of industries. It is conceivable that concrete implementation steps could be made public.
4. Infrastructure Investment
The Government’s infrastructure programme has a direct and indirect impact on SMEs which depend on sub-contracting deals to stay in business. It will be important to get an idea of which infrastructure projects are on the Government’s list of priorities. This is especially important for SMEs in order to restructure business development plans.
Procurement remains a key factor in the sustainability of SMEs. Over the last 20 years, we have seen various policy and administrative shifts which are designed to encourage an inclusive procurement environment where SMEs are given access to the supply chain of major industries. SMEs should be keen to hear whether National Treasury will influence the procurement of services in the public sector.