SA Canegrowers is deeply disappointed by Minister Enoch Godongwana’s announcement in his Budget speech today, that the Health Promotion Levy (HPL or sugar tax) will increase from 2.21 to 2.31 cents per gram of sugar despite no evidence being produced to date that the tax has successfully reduced obesity levels in the country.
This hike will not only threaten thousands more rural jobs in our sector but will also continue to hamstring the efforts to successfully implement the Sugarcane Value Chain Masterplan. We will therefore be writing to Minister Godongwana to request a meeting with him to discuss government’s reasons for increasing the HPL and the impact it will have on the industry.
Recent modelling commissioned by SA Canegrowers shows that maintaining the sugar tax at the current level would have cost the industry a further 15,984 seasonal and permanent jobs and would be a major contributing factor towards a decline of 46, 600 hectares of area under cane over the next ten years.
Massive job losses
The fact that government has increased the tax means that there will be even more job losses, than the 15 984 projection, and will result in a further reduction in the hectares under cane.
A recent socio-economic assessment commissioned by NEDLAC revealed that the sugar tax had already cost South Africa more than 16,000 jobs and R2,05 billion in 2019 alone.
It is inconceivable that government would move ahead with increasing the tax further when it is clear that poor rural communities will bear the brunt of this decision.
One million livelihoods
SA Canegrowers remains committed to the protection of the one million livelihoods that the sugar industry supports and to the success of the Masterplan.
We look forward to engaging with Minister Godongwana and using our membership in the Masterplan task teams to raise our concerns about the latest hike and to push for a holistic approach to health that takes into account all of the factors that contribute to obesity in South Africa.