‘SMMEs the key to housing market growth’

As the newest member of the BRICS emerging nations group, there are a lot of lessons SA can learn from thriving economies such as those of Brazil and China – and one of the most important is how to facilitate job creation through the growth of the SMME sector.
So says Berry Everitt, MD of the Chas Everitt International property group, who notes: “Job creation is obviously key to the robust recovery and growth of our housing market, as it will enable many more people to afford their own home for the first time. And the key to a really substantial increase in employment is a vibrant culture of entrepreneurism in which small, medium and micro-enterprises (SMMEs) can flourish.”
Reacting to the news this week that the number of people receiving social grants will be increased by 1m this year to a total of 15,3m – more than 10m of whom are children – he said such important efforts to alleviate poverty would not be sustainable unless SA could broaden its tax base.
“We are in a dangerous situation where we have more people getting grants than the estimated 12m people who are working – and only about 5m taxpayers. This is why the government is now placing such emphasis on job creation and skills development.”
However, Everitt says, for Finance Minister Pravin Gordhan’s plan to create 5m jobs over the next 10 years and reduce the unemployment rate to 15%, the economy would have to grow at 7% a year – “and that is just not going to happen without a very strong SMME sector.
“All over the world it is now recognised this sector creates more sustainable jobs than any other. In the US, for example, small businesses have created 64% of all net new jobs over the past 15 years, and currently employ more than half of all private sector employees.
“It is also clear that SMMEs have played a critical role in the rise of the BRIC (Brazil, Russia, India and China) economies over the past 10 years, as they did previously in the successful development of Taiwan and Korea.”
Consequently, he says, SA needs to focus intensively on encouraging the formation of new small businesses, as well as on supporting existing SMMEs so that they can grow and generate additional employment.
“I would suggest that we need to start teaching entrepreneurism in schools and encouraging school-leavers to start their own micro-businesses rather than having their hopes dashed by being unable to find a job. We also need to make the access to small business advice and funding easy and readily understandable; to get rid of all the bureaucratic obstacles in the way of registering and formalising a small business; and to give SMME owners real tax breaks, especially when the employ others.
“And perhaps instead of spending the R10bn in President Zuma’s job creation fund on employment incentives for big businesses - which will no doubt be dissipated through a dozen government departments and the Setas - the government should spend it on a very focused and specific campaign to help create one million or two million new businesses in the SMME sector over the next 10 years.  
“That would go a long way to meeting the target of 5m new jobs.”

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