Former president Kgalema Motlanthe has called on the government to exercise great flexibility when it comes to small businesses. He believes that by doing so, they will be able to make a positive impact on the country’s soaring unemployment and poverty levels. Motlanthe was speaking at a recent webinar hosted by Centre for Development and Enterprise’s director Ann Bernstein.
The topic was the future of South Africa, which included a focus on SMMEs. According to Motlanthe, the Labour Relations Act should be amended to create a breathing space for small entrepreneurs, who could not always be held to the same standards of their larger counterparts. “There should be flexibility (in this regard), and that could be done by amending the Labour Relations Act and allowing small employers the flexibility,” he said.
“We have to make sure that if someone needs a licence to operate a small enterprise, they should be able to get it within a month.” Motlanthe also warned against rushing to ensure that small businesses were tax compliant. “If you look at the taxi industry, for (a) year they were not paying taxes, and today it is a massive industry that is now so organised that SARS (SA Revenue Service) can bring them into the tax bracket,” he said.
Motlanthe said it was also time to establish micro-lending facilities in townships and poor communities so that entrepreneurs could have access to start-up capital. He was responding to a question on how to help smaller businesses, which do not have the same access to financing as big companies. “The way to go about it is to establish micro-financing and micro-lending offices closest to the unemployed, as well as those who see opportunities and possibilities (to create employment). You don’t have to ask for serious business plans either,” he said.
“There are welders who are based in townships that design and make beautiful gates, and they have no way of marketing them. They just place them outside their homes and passers-by can see them. “Someone like that needs start-up capital to get a bakkie and employ two other people, and it is that kind of thinking that would help us address the high levels of unemployment,” he said. Motlanthe also said that there should be opportunities to financially help people who could create employment in their communities.
“That way, you create local economies because resources circulate therein so that when recipients of social grants receive their grants, they can buy from the local economy,” he noted. “Unless we do that, other than the agricultural sector, I do not see how we can create labor-intensive sectors to create jobs.”
