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SME's - left wing politics in the new South African government

Guest post by: Dr. Rob Smorfitt

Article Overview: What are the likely effects of a more-socialist government in South Africa, on SMEs

SME's - left wing politics in the new South African government

SMEs need employees just like any other business.

However, in a week's time South Africa will have a new government. It is always difficult to assess the final policies based upon election hype and rhetoric. At one point Zuma, the President-elect, suggested a loosening of the labour legislation in South Africa. This was met with enthusiam by business who find themselves hamstrung by current rigidities in the labour market.

However, he was soon forced to retract this statement by the labour compnent of the ANC, and the question lingers as to what will happen after the election. Previous elections saw the same pattern, with a pandering to the left during the election and then back to business after the election. This election is different however, and so we wait with bated breath.

Current labour legislation from the business perspective is very rigid and results in fewer jobs being created. Proof of the rigidities is the blossoming of labour brokers, and the suggestion is that they will see a clampdown after the elections.

If the government flows to the left, it could result in wholesale job losses, particularly at the un-skilled and semi-skilled levels. There will be a massive swing to automation.

However, the impact will be very heavy for the SME segment. SMEs have largely restricted their growth to avoid employment of staff, and a hardening of labour markets can only impact further on the SME efficiency levels. We live in hope.

Dr Rob Smorfitt

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Article Tags: entrepreneur, entrepreneurship, labor, labor rigidity, labour, labour rigidity, politics, SME, SMME, Smorfitt



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