Small Business and Entrepreneurship

Small business holds the promise of creating jobs and entrepreneurs create the opportunities that employ more people. This promise will be a reality when significant contextual changes and policy shifts occur.

A Budget for a New Era of Engagement

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Signal vs. Noise in Fiscal Policy Telkom's microwave tower on Naval Hill. Photo: Graeme Williams Credit: Media Club South Africa (http://www.mediaclubsa.com)

Debates on the national budget have been called “noisy.”
Budget 2011 has been particularly noisy, as the sheer number of voices responding to the budget has increased, as has the complexity of the arguments being made.
This is a healthy development as it strengthens democracy, and ensures that government becomes accountable and society focuses not only on criticisms, but also alternatives.
The central challenge for government is not only to detect the signal through this noise, but to amplify the signal by taking on board as many players as possible. Government to date has not managed to do this with the furore around the youth subsidy, a case in point.

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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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What will happen to the R 9 billion job creation fund?

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2011 Budget Options

This article previews the budget looking at three options for spending the R 9 billion for job creation activities announced in the State of the Nation Address.
President Jacob Zuma left the details of the R 9 billion for job creation activities vague in his State of the Nation Address, simply saying:

We are pleased to announce the establishment of a jobs fund of 9 billion rand over the next three years to finance new job-creation initiatives.

The announcement on the details of this are eagerly anticipated when Minister Pravin  Gordhan delivers the 2011/12 Budget Speech. There are three major readings about what the details of the proposal will mean. The major options are:

  1. Application based fund
  2. Subsidy to support youth employment
  3. Support small business

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Taxes to support entrepreneurship

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Proposals on a major reform for small business taxes have been around for years. In this preview, we explore some of the options that potentially features in Budget 2011.

Proposal to utilise taxes to support small business and entrepreneurship are a strong possibility to feature in Budget 2011.Minister Pravin Gordhan, in his 2010 Budget Speech indicated that small business taxation would be an area of focus in government. Work in this area has been undertaken, and government might be ready to offer significant tax incentives to small business and start-ups.The logic is important to understand – more employers = more jobs.  The result is that economic participation and inclusion is supported.

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