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What business owners want from government

Cape Town - The 2013 third quarter Business Partners SME Index (BPLSI), has revealed that business owners are more confident that the economy will be conducive for business growth in the next 12 months.

The index measures attitudes and confidence levels amongst the small and medium enterprises (SME) industry in South Africa.

"Debatably, the call for the implementation of the 30 day payment policy in government could be taking shape, thus slowly turning the tide of negative perception in government’s favour,” said Nazeem Martin, MD of Business Partners.

When questioned on what form of assistance from government would benefit them most, 32% (up from 30% in the last quarter) of respondents indicated that direct funding would be most useful, while 22% (down from 25% in the last quarter) opted for government cutting red tape and 19% (up from 17% in the last quarter) indicated that government providing better tax breaks would assist most.

Average business confidence levels of 54% were recorded in the third quarter of 2013. It is a year-on-year increase of 5%, up from 49% during the same period in 2012.

This indicator is supported by the fact that SMEs consider economic conditions as less of a challenge this year, or alternatively, indicates that they have put measures in place to deal with these challenges.

Liquidations

According to Martin, the improved outlook for economic conditions may also be underscored by the significant reduction in business liquidations recorded in September by StatsSA.

“Unemployment also recently decreased to 24.7%, and reports showed that employment increased by 308 000 jobs. It is the largest gain recorded since the recession.”

The index revealed that SME owners surveyed displayed average confidence levels of 49% that the ease of access to business finance will improve in the next 12 months. This is a year-on-year increase of 6%.

Martin said that, while this is still slightly low, the increased confidence bears testament to the recently released World Economic Forum’s 2013/'14 Global Competitiveness Report.

Funding

The report ranked South Africa’s availability of financial services second out of 148 countries and the country’s affordability of financial services was ranked 13th.

“We have also recently witnessed more aggressive showcasing of funding available to SMEs by both banks and government,” he said.

Businesses still seem to be confident that their business will grow in the next 12 months, as average levels of 73% were once again recorded.

When asked about their confidence that current labour laws are conducive to the growth of South African businesses, SME owners displayed average confidence levels of 35%.

Martin said that despite confidence levels which remain low, this is a year-on-year increase of 5%.

“This jump in confidence could be a result of fewer violent strikes and less labour unrest over the past few quarters compared to 2012. These levels are, however still too low, and highlight that SMEs have strong opinions and concerns about the current labour regime,” said Martin.

Government's role

He said despite a 5% year-on-year increase of confidence levels around government doing enough to foster SME development, low levels of 31% were recorded in the third quarter.

The increased trade missions available to entrepreneurs, plus incentive schemes announced by the department of trade and industry (dti) might be spurring SME owners’ confidence, according to Martin.

These incentive schemes include the aquaculture development and enhancement incentive programme available in the form of grants of up to R40m to entities engaged in primary, secondary and ancillary aquaculture activities.

“Despite various challenges which SMEs and business owners face, it is encouraging to see general confidence levels rising," said Martin.

"SMEs are the engine of the South African economy and business owners need to be positive going forward, as negativity is unlikely to stimulate growth and prosperity.”

- Fin24
 

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