Mini-Budget Presents Opportunities for Entrepreneurs

Mini-Budget Presents Opportunities for Entrepreneurs

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The SA Chamber of Commerce and Industry (Sacci) said it had hoped Finance Minister Pravin Gordhan would provide details on a number of issues – including on benefits for SMEs –when he presented his medium-term budget policy statement (MTBPS) to Parliament on 25 October.

Sacci expected Gordhan to provide details on, among others, how government planned to fund the R4 trillion infrastructure development spending and possible principles for private sector involvement, according to Sacci chief executive Neren Rau.

Better business environment for SMEs

On small and medium enterprise (SME) support, Rau said there had been repeated official commitments towards improving the business environment for SMEs, but no concrete details had been provided.

“Sacci expected the minister to provide information on improved measures to enforce the 30-day payment directive and other initiatives aimed at reducing the cost of doing business,” he said.

Committed to being more efficient

Much attention was devoted in the MTBPS to addressing the ways in which the state plans to eliminate waste, corruption and improve efficiency. “We assure our people that we will repair dysfunctional municipalities, we will try harder to connect book suppliers to schools, and we will work with business and labour to create decent living conditions in mining communities,” Gordhan pledged.

Government spending comes under the spotlight

“The main message is a commitment to the stabilisation of government spending that will lessen the overall tax burden on the country. The commitment to reducing the fiscal deficit and government debt indicates greater emphasis on fiscal sustainability that could have a positive influence on our credit ratings and foreign investor perceptions,” said Rau.

Gordhan detailed initiatives to rein in the widening deficit and improve the impact of spending by, among other things, investing the balance of resource allocation in new infrastructure.

Strikes impact on projected revenue

But confronted with weak tax revenues, protracted strikes and a slowing global and domestic economy, revenue is set to under-shoot government’s target by R5bn this financial year.
It was inevitable that South Africa’s economic growth outlook would weaken due to the recent production stoppages brought about by widespread industrial action and illegal strikes.

Improved procurement processes

The National Treasury has proposed reforms that will focus on developing a procurement system that prioritises value for money and that strengthens the fight against corruption.

Standard Bank economists said: “Overall we believe the MTBPS reassured South Africans and the rest of the world that government is in control of the budget.”

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