According to Standard Bank experts there are numerous advantages for entrepreneurs within the 2017 Budget.
Small and medium sized business owners will consider the 2017 national budget in the light of government’s declaration that ‘small business is big business’.
In particular, the sector will look for further commitment to SME’s in the national budget and progress in the key areas detailed in the Department of Small Business Development 2016/17 budget vote, says Standard Bank.
Glenn Pratt, Manager: Small Enterprises, Business Banking at Standard Bank Group, says that Minister Gordhan will continue pursuing fiscal discipline while simultaneously encouraging growth as the best route to economic transformation.
“It will be interesting to see how the impressive collaboration forged between economic stakeholders in response to the threat of rating downgrades translates into a new economic accord in which SME development is a pivotal part,” he added.
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Dealing with the adjustment to the tax thresholds for SME’s
“An obvious area of interest will be adjustments to the tax thresholds for SME’s and further tax simplification to encourage compliance and small business formalisation. But these could be matched with incentives for corporates to increase their procurement from SME’s and investment in supplier development for black and female owned enterprises in particular,” said Mr Pratt.
For its part, government has long seen its massive purchasing power as a vital enabler of SME development. The President re-iterated in this year’s SONA that the state’s R500 billion procurement spend and R900 infrastructure spend till 2019 must be leveraged to drive transformation, and that big contractors must subcontract at least 30% of their state business to black owned enterprises.
“Small business owners will be interested to see how these goals will be pursued differently from before. The bulk of government procurement occurs are local or site level so there may be new measures to strengthen procurement, supplier management and payment systems at those levels,” Mr Pratt added.
Turning to the Department of Small Business Development, Mr Pratt says that SME’s should look out for further development under the strategic themes set out by Minister Lindiwe Zulu in her 2016 budget vote.
In particular, there may be further investment in
- Financial support for small business via the Small Enterprise Finance Agency (SEFA),
- Entrepreneurial skills development via the Skills Education and Training Authorities (SETA’s) and the Small Enterprise Development Agency (SEDA),
- access to markets for small businesses, including Black Business Supplier Development, and
- reshaping and transforming the small business sector via the Co-operatives Development Scheme, National Informal Business Upliftment Strategy and Emerging Enterprise Development Programme.
The commitment to develop small enterprise remain strong
Macro-economic conditions will continue to be difficult but Mr Pratt is optimistic. “The commitment to developing the small enterprise sector in pursuit of inclusive growth is stronger than ever, and we’ve paid our school fees in a number of respects.
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"I’d look out for developments around the Chief Procurement Officer, revised public procurement legislation, and the four themes if Department for Small Business Development, namely, funding, market access, entrepreneurial skills and regulatory relief for SME’s.
The Minister may also want to highlight support for sectors with high potential for growth as well as transformation such as information & communications technology, tourism, energy, export-orientated manufacturing agribusiness and education & training.”