As confidence in the country continues to wane, we look to another market moving event when the South African Minister of Finance, Pravin Gordhan presents the budget speech to the nation and what business owners will be hoping to hear.
This will be the first budget speech Minister Pravin Gordhan will say since the infamous finance minister shuffle by President Jacob Zuma at the end of last year, firing Nhlanhla Nene and hiring David Van Rooyen sending the rand on a freefall, to then replace him with former finance minister, Gordhan.
“I think it’s a very difficult position to be in, I think there is so much expectation that what he is going to say is going to help us get out of the mess that the country’s economy is in right now,” said Nazeem Martin, Managing Director of Business Partners
Martin adds: “I think we are projecting very low growth for this current financial year and if there is low growth it means there is going to be low economic activity and if there is low economic activity, it’s going to impact on business in general but especially small businesses, so we have had a lot of instability, a lot of uncertainty and the state of the stock market.”
Martin reckons a lot of people are expecting Minister Gordhan “to wave a bit of a magic wand” and give the nation optimism in a time of a lot of volatility and lack of confidence.
“When there is a lack of confidence people tend not to invest, if they don’t invest the economy doesn’t grow, if the economy doesn’t grow we don’t create jobs, consumers don’t have money in their pockets or as much as they should have and therefore people spend less and SMEs feel the pain,” said Martin.
On the wish-list, Martin hopes that the speech is indicative that government and business leaders have been working together.
“And out of that has come a budget which indicates that government expenditure is going to be under control.”
He concedes that there may be increases in taxes none too burdensome and that if the expenditure exceeds the revenue from taxes then there is a plan to mitigate that.
“That would bring a bit of stability to the economy, it would give people confidence both locally and abroad and I think with that stability would come the confidence for people to then invest in our economy,” said Martin.
“If I’m an entrepreneur out there, I’d always want to get a bit of tax relief, I don’t think it is going to happen this time, if anything, taxes are going to go up.”
Another critical point Martin is listening out for is that the minster will say “government is committed to unleashing the power of entrepreneurship in order to help us grow this economy and create jobs” by loosening regulations and cutting the red tape.
“That they are going to do that by making it easy for people to set up and to grow their businesses – they are going to cut back on a lot of the regulations, many of which are unnecessary and inhibit people seeing entrepreneurship as a career choice,” said Nazeem Martin, Managing Director of Business Partners.