Public Expenditure

Spend more and spend better is a stance that we support at Zapreneur. Government however needs to undertake major reforms before it’s budgets can be said to support economic transformation.

Treasury launches Jobs Fund

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The Jobs Fund - National Treasury funds, DBSA implements

Minister Pravin Gordhan has launched the Jobs Fund, first mooted in President Jacob Zuma’s State of the Nation Address. The fund  targets 150 000 jobs I three years and  has three unique characteristics:
 

  1. Co-finance projects with the potential of job creation, supporting both existing and new programmes.  The fund thus seeks to gear additional funding into the programme
  2. Grants instead of loans – Importantly, the funds provide grants for projects, signalling a shift in government to directly fund projects through grants and supporting venture capital. There will be no repayment or financial return sought, although funds that  are  not spent for the  purpose for which they were allocated,  or  are misappropriated, will be reclaimed by  the  National Treasury.
  3. Supporting existing and new programmes – The fund is designed to provide for a range of different partnerships, including for existing government programmes and new programmes.

Details on the application forms and criteria can be found at http://www.jobsfund.org.za/
The fund has a wide ambit, covering four areas:

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Safety for Women – The allocations are there, what about implementation?

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Going safely home. Johannesburg, : Women on their way home after a day's work, in Noord Street in the city centre. Photo: Chris Kirchhoff, MediaClubSouthAfrica.com

In his Budget speech, Minister of Finance Pravin Gordhan made specific reference to creating safer communities.  While we welcome the increases to the budget allocation, we await to see how the department of Police and Justice and Constitutional Development will spend it.
With the technological revolution, we are fast becoming “online communities” and we are also seeing more crimes perpetrated using advanced technology. As  online spaces are also becoming unsafe (a reflection of what is happening in our society), especially for young girls and women, we need our police and justice system to respond to the challenges. Perpetrators of gender based violence are increasingly using technology to lure, track, monitor and stalk women and girls.

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Enter the entrepreneur? Budget 2011 Proposals for Many Small Businesses not Just White Tigers

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Zapreneur declares it has an interest in this subject. Photo - Moe and Milsey's Construction Company

We like them. The small business that succeeds against the odds. Minister Gordhan even saluted a couple of success stories on the budget. In the build up to the budget, I choose to read The White Tiger by Indian author Aravind Adiga . The White Tiger provides a devastating description of the poverty traps, and that rare success stories translate to private gain without a wider social impact. The central premise of the book is that successful entrepreneurs are as rare as white tigers. In fact, in South Africa the data provided by the Global Entrepreneurship Monitor indicates that job creating, opportunity based businesses are a rarity in South Africa. The book though not set in South Africa provides a useful refrain from the rah-rah usually associated with entrepreneurship. What then does the budget propose for the small business entrepreneur?

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Youth Subsidy and building consensus

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KwaZulu-Natal Midlands: Ceramic painters Zama Nqubuku (foreground) and Wiseman Ndlovu at work in the Ardmore Ceramics studio. Photo: Hannelie Coetzee

Minister Pravin Gordhan reintroduction of the proposals around the youth subsidy is a brave political decision, given the overwhelming and justifiable criticism of the proposal. In tabling the new proposal Minister Gordhan has listened to the criticism and opted to tweak the proposal. The first proposal provided a wage subsidy or hiring voucher to lower cost of labour and compensate employers for the perceived risk of hiring inexperienced workers. In tweaking the proposal, government has shifted from this position, so that it is now to be administered as a tax credit. This is significant step as it potentially means that entry-level wages will remain the same.

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The tough life of budgeting for social grant holders

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The national discourse on social grants as set by President Jacob Zuma emphasises that South Africa is creating a “developmental” and not a “welfare” state. The definitional debates on these terms are grounded by the realities of households reliant on social grants. Minister Gordhan announced increases to the social grant, yet when projected inflation is taken into account the majority of grants actually experience a real decrease or a small real increase as shown in the table below.

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