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Business

Mixed messages face small business sector

BY DENNISE WILLIAMS
Observer writer

Wednesday, August 29, 2018

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President of the Small Business Assocation of Jamaica (SBAJ), Hugh Johnson is asking for clarity on the Government's position as it relates to the development of the small business sector.

Making reference to several government “utterances”, Johnson called on the powers that be to have a clear line of communication to guide small operators on how to engage with the Government in an effort to first stabilise business operations and then grow.

“There is a major constraint to productivity where there is a lack of cohesive policy for the micro, small and medium enterprises (MSME) sector. Each ministry is in its own fiefdom. For example, we are not pleased with the level of the result of consultations with the Ministry of Finance. I am reading the signs as it relates to public utterances.”

Johnson made reference to talk about the reform of the public sector as one instance where “utterances” do not reflect the reality the small business sector faces. “When small operator is the human resource manager, the marketing manager, the accountant, the procurement officer – the head cook and bottle-washer of his business – it is a significant cost to spend hours at the tax office [and] this relates to the low productivity in the economy. Serious Government intervention is needed to correct these ills.”

Another example of “utterances” that the SBAJ must contend with is the changes to the banking policy as it relates to cash transactions.

“I am criminalised by my Parliament if I am not using the financial institution for doing transactions over $1 million. Why can't the Government implement policies to prevent the bank from extorting us with high banking fees?”

Johnson was referring to the requirement to use the Automated Clearing House created by the Bank of Jamaica to facilitate the electronic processing of debit and credit payments. Banks transfer monies using the Real Time Gross Settlement system and charge fees ranging between $80 to $3,181.54, plus general consumption tax, per transaction.

Johnson did applaud the Government on three intitatives.

First, “we support the move by the Prime Minister Andrew Holness to team up the Ministry of Agriculture with Commerce. We need more teaming up of that source at the ministerial level to drive efficiency and productivity”.

Next, Johnson applauded the efforts of the HEART Trust/NTA to introduce trainees to the world of entrepreneurship.

“The Ministry of Education has engaged the SBAJ to look at the school curricula for HEART. We are pleased that the ministry sees that there is a misfit between training up to tertiary level and what is need in the industry. We have two noted univeristies in Jamaica and graduates from one are gobbled up by factories, manufacturers and the other isn't. Why? We leave that to the Ministry of Education.”

Finally, Johnson noted that “As it relates to inflation, the current rate is commendable. We don't believe we can handle further inflationary shocks. We encourage the technocrats to listen to the people on the ground.”

Johnson was very clear, “We are here to represent the views of the members. They are unable to take the pressure any longer; they are crying out to the Government. We reference the FINSAC era how it destroyed entrepreneurship in Jamaica, especially with those who had engaged the bank. Now you don't have to have a loan with the bank to suffer.

“Small business owners are suffering at the gas pump, suffering when you go to buy your raw material, suffering when you attempt to plan your business. It is inesacpable. The net is much wider and we are asking for mercy.”

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