The upcoming annual National Budget Speech is one of the most anticipated events in South Africa because of its significance in shaping the country’s economic agenda. Whilst major business industries continue to show relative interest in the Budget Speech, the same cannot be said about SMEs.
So how important is the National Budget Speech to SMEs?
According to Heather Lowe, Head of Enterprise Development at FNB Business, “The Budget Speech provides a good indication of what big and small business can expect from an economic and regulatory point of view. 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.”
Lowe says some of the key areas that SMEs should pay special attention to, include:
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.
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 .
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 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.
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.
“Overall, it is important to make sense of the Budget as it contributes significantly to shaping the operating environment for businesses in South Africa,” concluded Lowe.