Budget 2021: Anticipation for bigger small business support
FOLLOWING his fifth annual State of the Nation Address, President Cyril Ramaphosa faced the challenge of showing how government plans to help businesses and people navigate the coronavirus crisis in the short-term while providing a roadmap out of the pandemic and a clear destination for the future.
In this week’s Budget Speech, we hope to see concrete proposals from the Finance Minister about how government will bring the President’s plan to life.
The task that faces Finance Minister Tito Mboweni is not trivial. All eyes are upon him to show how we can build back a more vibrant, competitive economy, at a time when the fiscus is under enormous pressure. We hope Mboweni will seize the opportunity to clarify how government will create an enabling environment for entrepreneurs and businesses.
There can be no real prospect of economic rejuvenation without a reliable, affordable power supply to businesses and consumers. Equally, we cannot position South Africa as a winning nation in the digital economy without a coherent ICT (Information and Communications Technology) policy. For these reasons, we are hoping to hear more in the Budget Speech about how the government will overhaul the electricity supply market, drive affordable broadband for small businesses, and accelerate digital transformation in government.
Another item on my wish list is to hear more about government plans to use technology more effectively to reduce red tape for citizens and businesses, and to support businesses exploring opportunities in next-generation sectors like artificial intelligence. We think small companies are under-invested in digital and it could be exciting to see ideas about how to incentivise them to invest more heavily in the digital economy.
We were reassured to hear the President highlight the small and medium business sector as an engine of growth for the future. The President is to be applauded for committing to creating a more conducive environment for the private sector to be able to create jobs. The steps he has taken to improve ease of doing business signal that commitment.
Yet driving growth of the private sector, especially small businesses, is not just about top-down interventions. Small businesses are agile and resilient. They are used to fending for themselves and if their potential is truly unleashed, they can take South Africa’s growth to a whole new level. We need to create a culture and a framework that encourages people to establish their own businesses.
To that end, we’d like to see the government incentivise entrepreneurs to invest. Removing blockages such as the unstable power supply and relatively high connectivity costs is just the beginning. We believe this could, for example, be an opportune time to explore a simpler tax and compliance regime for smaller businesses. As we look ahead to the Budget Speech, we hope to see measures to support small businesses and consumers rather than steep tax hikes.
Viresh Harduth is the vice-president, Small Business, Sage Africa & Middle East
*The views expressed here are not necessarily those of IOL or of title sites