As Minister Mboweni prepares to deliver his Budget Speech on Wednesday, 24 February 2021 in an economy with record unemployment, the South African Cane Growers Association (SA Canegrowers) call for an immediate decrease to the health promotion levy (HPL) or sugar tax to save the recovery of the local sugar industry and safeguard the one million livelihoods that depend on it.
The call for a decrease to the sugar tax is even more urgent in light of recent announcements that an additional R100 billion in revenue has accrued to the National Treasury. Our government therefore has room to maneouvre to help save the 65,000 direct jobs that the local sugar industry supports. Many of these jobs are on the farms of our 21,581 small-scale growers, in deep rural areas where economic opportunities are increasingly scarce.
SA Canegrowers has repeatedly called for a comprehensive review of the sugar tax to assess the impact that this debilitating tax has had on local industry. A survey conducted in the first year of the sugar tax found that the sugar industry had lost in excess of 9 000 jobs in the cane growing sector alone.
Under the Sugar Industry Masterplan, signed in November 2020, SA Canegrowers and industry stakeholders, including government, agreed that the socio-economic impact of the sugar tax would be reviewed. A socio-economic impact assessment has been commissioned but is not yet finalised.
The sugar industry is facing severe economic headwinds that threaten its survival including the sugar tax, cheap sugar imports and significant increases in costs of production. Without a thorough socio-economic impact report, and with the real threat of more job losses looming, the Minister should immediately decrease the sugar tax as part of government’s stated efforts to save jobs and grow our economy.
It is crucial that Minister Mboweni alleviates the mounting pressures on the sugar industry in order to power its continued recovery. This would represent concrete action on the part of government to support President Ramaphosa’s call during his State of the Nation Address for all South Africans to buy local and support the local sugar industry.
SA Canegrowers remains committed to working with all government and industry stakeholders to ensure a thriving industry for the benefit of all South Africans. With support from the Minister, we will continue to see the restoration of our local sugar industry and we will save the one million livelihoods that depend on it.
