Govt must lead small business thrust
THE GOVERNMENT needed to pay more attention to small and medium enterprises if it wanted to see South Africa undo its socioeconomic challenges, which included unemployment, poverty and inequality.
This was the view of two economics commentators and a political analyst who spoke to KZN Business Report on the sidelines of the Post-budget Breakfast at Mancosa, in Durban.
Response to Finance Minister Malusi Gigaba’s Budget speech has been largely lukewarm, with a lot of flak for the 1% VAT increase that will come into effect in April.
But Gigaba’s commitment to pay suppliers on time has been lauded after numerous complaints in recent years of small businesses not being paid their dues in time, in some instances, leading to liquidation.
Said Gigaba: “The payment of suppliers on time is regulated by the Public Finance Management Act and Municipal Finance Management
Act. Next week, the director-general of the Treasury will issue a directive to all government departments and public institutions, instructing them to pay suppliers on time, or be charged with financial misconduct.
“This must be monitored by accounting officers, and the Treasury will strengthen oversight mechanisms in this regard. We will work with colleagues in all spheres of government to improve performance of public entities on this critical issue”.
Durban economist Paul Jones of Lumec, an economic development research firm, said that was a step in the right direction as many small businesses failed or were liquidated because of late payments.
He said the government needed to support small businesses and lead a campaign that would call on the public to back local products and suppliers.
“There is continued undersupport of local businesses from the government’s side. There is no real national drive to say ‘let’s support local businesses, let’s buy local’.
“Government is not leading the way in showing people how it’s done. For instance, ethekwini (municipality) should be supporting the local textile industry, which is at a serious point of decline.
“That industry is still intact, but we have major conferences in Durban all the time and we are still printing T-shirts that are made in China. They should lead the way and say let’s procure locally,” said Jones.
Political commentator Jackie Shandu said the space for small business would continue to be ignored because the governing party was in bed with big business. He said Gigaba’s “uninspiring” Budget had nothing new apart from the
VAT increase and dismissed the commitment to paying suppliers on time as “lip service”.
TO PAGE 2