The Nelson Mandela Business Chamber (NMBBC) welcomes the 2012 Budget’s strong focus on an enabling environment for business growth, especially for small business, and factors supporting job creation, including the infrastructure development programme that is government’s key intervention on creating employment and supporting economic growth. The Minister made several references to lowering the costs of doing business and reducing red tape, and this will make a positive, practical contribution to a more enabling environment for business.
We agree that an ‘extraordinary national effort’ is required from all role-players working together to address unemployment & poverty. Positive evidence that this is being implemented is that some of the recommendations made in Nedlac were taken note of in the budget – we encourage that this continues, reflecting the spirit of the ‘working together’ referred to by the Minister.
Confirmation of the R845-billion in approved and budgeted expenditure will give effect to the infrastructure plans announced by the President in the State of the Nation address.
Tax relief for small businesses, as well as easing the tax administration burden on small businesses, holds the potential to boost the ease of doing business and reduce barriers to entry for new entrepreneurs. This is very welcome as small businesses are known to be the key engines of economic growth and job creation.
The Minister’s statement that government needs to strengthen its rules to ensure that creditors are paid within 30 days is good for business, and for SMEs in general whose cash flow is critical to keeping their businesses going. We would like to see that this is enforced, particularly at provincial and local government level.
While it is pleasing to see the increased investment in public goods such as health, education and human settlements, the ability to spend these funds effectively and ensure that the expenditure translates into more effective teaching and learning, and quality healthcare and public infrastructure for more people, especially the poorest of the poor, is still questionable. In this regard, the Minister’s warning that public officials will be held responsible for under- or mis-spending of public funds is welcome, and we would like to see it carried through in practice at all levels of government.
Similarly, the additional steps taken by National Treasury to combat fraud and corruption are a positive signal, which we would like to see strongly implemented.
Consolidating financing for small enterprises in the Industrial Development Corporation makes sense, and we welcome the focus on a range of initiatives to support competitiveness and leveraging state procurement to stimulate business.
Other points of focus which we highlight:
- Addressing youth unemployment so that the next generation can be become economically active.
- The Cities Support Programme – we are interested to see its mandate and how it can play a role in NMB, particularly in improving public transport; however we are concerned at the intention to devolve public transport services to municipalities, given that the Integrated Public Transport System has yet to be effectively implemented in Nelson Mandela Bay.
- Personal income tax relief to deal with impact of inflation is welcome.
- Funds generated by carbon tax and electricity levy we would like to see being directed specifically at developing and supporting energy efficiency and renewable energy programmes.
- The increases in the general fuel levy and RAF levy will contribute to increased costs in areas such as food and transport.
- With regard to funds allocated to job creation, these are all very worthy projects, however the concern is for the sustainability of these jobs once the particular projects are finished.
- We trust that the increased spending on public order and safety will translate into more effective crime-fighting and safer working and living environments.
- We remain concerned about the tax burden impact on individuals and business of the national health insurance, and await the planned discussion paper with interest.
Overall, we saw a balanced and disciplined Budget with a welcome focus on enabling economic growth, investment and job creation, and especially support for small businesses.
See also: 2012 Budget Speech
Alan Straton
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