Should Australia introduce a sugar tax to combat obesity?
To help recoup some of the costs of obesity to the community, Grattan Institute in its report, A sugary drinks tax: recovering the community costs of obesity, suggests that Australia should introduce a tax on sugary drinks. Excessive consumption of unhealthy foods, including sugar-sweetened beverages (SSBs), not only causes long-term problems for consumers, but also impose enormous costs on the broader community.
One in four Australian adults are now classified as obese and about 7 per cent of children are obese.
While obesity is mainly a consequence of individual choice to consume unhealthy processed food, the effect is borne by the entire community. On average, those who are obese are more likely to receive more healthcare services than those who are not. They also have lower rates of employment, receive more social services payments, and contribute less income tax than people in the normal weight range. This foregone tax and additional health and welfare expenses cost Australian taxpayers more than $5.3 billion a year.
The Grattan Institute report calls for an excise tax of 40 cents per 100 grams of sugar in nonalcoholic, water-based beverages that contain added sugar. This would increase the price of a two-litre bottle of soft drink by about 80 cents, raise about $500 million a year, and generate a fall of about 15 per cent in the consumption of sugar-sweetened beverages, as consumers switched to water and other drinks not subject to the new tax. The revenue could go to promoting healthier eating, preventing obesity, reducing the budget deficit or a variety of other purposes.
The report stresses that a new tax is not a “silver bullet” solution to Australia’s obesity epidemic, but the proposed tax would encourage healthier lifestyles. Grattan Institute Health Program Director Dr Stephen Duckett said that they target these drinks because most of them contain no nutritional benefit.
Dr Duckett said, “For now, Australia should introduce this tax because it offers twin benefits: it will reduce the number of people who become obese and it will ensure fewer taxpayer dollars have to be spent on the damage done by obesity.”
The Dietitians Association of Australia (DAA), which has been advising to reduce the amount of discretionary foods in the Australian diet for decades, supports any measure which effectively reduces consumption of SSBs. The DAA believes that if a sugar tax were to go ahead, this would need to be at a high rate, to make a difference in achieving behaviour change.
DAA considers that introducing a sugar tax is only a part of the solution as there are other important factors to consider. DAA calls for broader measure which include educating Australians on the benefits of nutritious foods and appropriate portion sizes, reformulating foods to make them healthier, combatting nutrition misinformation and improving access to Accredited Practising Dietitians.
The Australian Medical Association also supports sugar tax as a way to combat obesity. AMA President, Dr Michael Gannon, said that combating obesity demands a whole-of-society approach.
“The AMA strongly recommends that the national strategy include a sugar tax; stronger controls on junk food advertising, especially to children; improved nutritional literacy; healthy work environments; and more and better walking paths and cycling paths as part of smarter urban planning,” Dr Gannon said.
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