Friday, 19 April 2019

Manifesto debate at the SBI SME Indaba

On Thursday 11th April I participated in a debate with the ANC and EFF on our election manifestos. It was part of the Small Business Institute SME Indaba held at the Bryanston Country Club.

My counterparts were ANC MP Ruth Bhengu, Chair of Parliament's Portfolio Committee on Small Business Development and a colleague of mine for the past 5 years on this committee; and Mandisa Mashego, Chair of the EFF in Gauteng. It was moderated by economist, commentator and SBI director, Lumkile Mondi.




Each of us were given 3 minutes to make our opening statements, and you can read mine below (I didn't have time to cover all my points). It became fairly obvious early on in the debate that the ANC and EFF were competing to present the most radical policies, including land expropriation without compensation, nationalisation of the Reserve Bank and the formation of state banks in all sectors of the economy. They did not seem to realise that the audience was mostly comprised of small business owners for whom these policies are anathema.

You can watch two video segments on the Indaba below.


I am getting so tired of people trotting out the same old mantra that small businesses are key to our economy and will create 90% of new jobs. Few concrete policies have been put forward to achieve this outcome. This is why the DA manifesto homes in on a 6-point plan of concrete actions. I am happy to report that this is mostly from my own pen, so to speak.


The DA, ANC and EFF manifestos provide starkly contrasting visions for South Africa’s economy.

DA – a rapid turnaround in confidence and investment based on secure property rights, the rule of law, eliminating corruption, the primacy of markets over state-led development, easing the cost of doing business, opening our economy to much-needed skills and investment, de-racialising society and energising entrepreneurs and small business; economic growth of 5 per cent within 3 years.

ANC – continuing decline in confidence and economic performance based on policy uncertainty, non-accountability for corruption and breaking the law, a fixation on the national democratic revolution and transformation, prioritising re-distribution over growth, and its alliance with Cosatu and the SACP preventing much needed structural reforms; economic growth stagnating at 1-2 per cent at best.

EFF – rapid and inevitable destruction of confidence based on nationalising key sectors and institutions, land expropriation without compensation, race-baiting, bullying of the media, blowing up our public finances, ignoring corruption in its leadership, proto-fascist and militaristic political posturing, and empty populist rhetoric. Economic growth plummeting to minus 10 per cent within 3 years. The Venezuela and Zimbabwe scenario.

Voters have a clear choice on May 8th.

Turning to policies on small business in the DA’s manifesto you will find 39 references to small business. In the ANC’s manifesto, small business gets 13 mentions and in the EFF’s, only 3.

Does that tell us something about their priority for growing our economy and creating jobs?

What about red tape? Red tape strangles small business and inhibits growth and job creation. The DA’s manifesto mentions red tape 10 times. Neither the ANC’s nor the EFF’s manifestos mention it at all – no, not once.

It is a sad fact that South Africa has too few entrepreneurs and a dearth of formal small and medium enterprises. So, you’d expect the main political parties to be doing all they can to promote and develop entrepreneurs in our society.

Surprise, surprise: the DA’s manifesto mentions entrepreneurs 20 times. The ANC’s, 3 times and the EFF’s just once.

So, two of the three main parties contesting for power on May 8th virtually ignore the key ingredients of an enterprise economy.

The DA’s manifesto outlines a 6-point plan for unleashing small businesses:

First, we will introduce an overtly pro-small business policy approach.

This would begin with a start-up visa and other incentives to encourage direct investment by foreign entrepreneurs. We will reinvigorate the CEO’s Initiative partnership with government to inject new energy and optimism into the business sector and eliminate the trust deficit.

Second, we will ease the cost of doing business by exempting small businesses from certain labour and BEE regulations.

We will implement our Red Tape Impact Assessment Bill and small businesses with under R30 million turnover per annum will be exempted from all labour and BEE legislation barring the Basic Conditions of Employment Act.

Section 32 of the Labour Relations Act will be amended to reflect membership of Sector Bargaining Councils based on company representation and not number of employees.

Third, we will find ways of improving cash flow by implementing a temporary amnesty on tax penalties for small businesses and ensuring government and big business pay suppliers within 21 days.

We will impose penalties and name and shame ministers, deputy ministers and directors general for noncompliance.

We will pass the DA’ Small Enterprises Ombud Service Bill to adjudicate in disputes concerning small business, and in particular, late payments.

Fourth, we will provide funding and related assistance for small businesses

We will institute a review of all Development Finance Institutions and create a single Business Growth Fund offering a combination of equity, grant and debt funding. The aim of this fund is to de-risk investments in partnership with private sector funders.

Fifth, we will provide targeted support for micro-entrepreneurs in the informal economy

Finally we will focus on instilling an entrepreneurial mindset and expanding support and incentives for youth-owned businesses and cooperatives

We will direct more resources to the Centres for Entrepreneurship, to encourage entrepreneurship as a career choice, especially for young people pursuing trade and technical vocations.

A cost-benefit exercise will be conducted on all state-funded business incubators including those supported by the Jobs Fund, while establishing best practice models to assist private-sector incubators.

It is noteworthy that many of these interventions are not within the remit of the Department of Small Business Development. We advocate the formation of the Ministry of Employment and Enterprise which will amalgamate Labour, DTI, Economic Development and Small Business Development. Policy must coalesce around one growth-oriented economic strategy developed in conjunction with Treasury.

Taken together, these measures will enable South Africa to turn the corner and begin creating the millions of jobs our country so desperately needs.

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