Support package welcomed, fears remain for small firms

2011-10-26 00:00

BUSINESSES taking strain in the uncertain economic environment and amid fragile business confidence levels will hope the support and incentive programmes announced by Finance Minister Pravin Gordhan in his medium-term budget speech will deliver the necessary dividends as early as possible.

Gordhan announced a R25 billion spending plan to boost industrial development over a six-year period as a competitiveness package, as well as an R8 billion tax incentive programme for industrial development, technology and training.

A significant portion of the money will be spent on industrial development zones (IDZs), including the recently launched Richards Bay IDZ.

Gordhan is under no illusions about the fragility of the economy. He expects moderate economic growth this year.

Nedbank’s group economic unit described the mini-budget as a cautious statement amid a vulnerable global climate, “but with the right emphasis on investment, jobs and private sector participation in key sectors”.

Severus Smuts, head of the VAT team at Deloitte, pointed to Gordhan’s comments that the softer levels of VAT receipts could be a sign of the woes faced by small and medium businesses.

“This could be attributed to small and medium businesses facing margin pressure due to consumer price inflation that has increased over the past year,” Smuts said.

Durban Chamber of Commerce and Industry chief executive Andrew Layman echoed these sentiments.

Layman told The Witness that many businesses, particularly small enterprises, are struggling as orders dwindle in the face of renewed economic uncertainties.

“Things are very slow in fact,” Layman said, summing up the mood.

Pietermaritzburg Chamber of Business chief executive Melanie Veness told The Witness the chamber welcomes the competitiveness support package.

“We welcome the additional spend on infrastructure, which is critical [as] the current state of our infrastructure is a serious barrier to economic growth,” Veness said.


Join the conversation! encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

We reserve editorial discretion to decide what will be published.
Read our comments policy for guidelines on contributions. publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Inside News24

Traffic Alerts
There are new stories on the homepage. Click here to see them.


Create Profile

Creating your profile will enable you to submit photos and stories to get published on News24.

Please provide a username for your profile page:

This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire network.


Location Settings

News24 allows you to edit the display of certain components based on a location. If you wish to personalise the page based on your preferences, please select a location for each component and click "Submit" in order for the changes to take affect.

Facebook Sign-In

Hi News addict,

Join the News24 Community to be involved in breaking the news.

Log in with Facebook to comment and personalise news, weather and listings.