Read The Times Australia

Daily Bulletin

A sugary drinks tax could recoup some of the costs of obesity while preventing it

  • Written by: Stephen Duckett, Director, Health Program, Grattan Institute

Obesity is a major public health problem In Australia. More than one in four adults are now classified as obese, up from one in ten in the early 1980s. And about 7% of children are obese, up from less than 2% in the 1980s.

image Prevalence of obesity in Australia. Author provided

Obesity not only affects an individual’s health and wellbeing, it imposes enormous costs on the community, through higher taxes to fund extra government spending on health and welfare and from forgone tax revenue because obese people are more likely to be unemployed.

In our new Grattan Institute report, A sugary drinks tax: recovering the community costs of obesity, we estimate community or “third party” costs of obesity were about A$5.3 billion in 2014/15.

We propose the government put a tax on sugar-sweetened beverages to recoup some of the third-party costs of obesity and reduce obesity rates. Such a tax would ensure the producers and consumers of those drinks start paying closer to the full costs of this consumption – including costs that to date have been passed on to other taxpayers. There is the added benefit of raising revenue that could be spent on obesity-prevention programs.

The scope of our proposed tax is on non-alcoholic, water-based beverages with added sugar. This includes soft drinks, flavoured mineral waters, fruit drinks, energy drinks, flavoured waters and iced teas.

While a sugary drinks tax is not a “silver bullet” solution to the obesity epidemic (that requires numerous policies and behaviour changes at an individual and population-wide level), it would help.

Why focus on sugary drinks?

Sugar-sweetened beverages are high in sugar and most contain no valuable nutrients, unlike some other processed foods such as chocolate. Most Australians, especially younger people, consume too much sugar already.

People often drink excessive amounts of sugary drinks because the body does not send appropriate “full” signals from calories consumed in liquid form. Sugar-sweetened beverages can induce hunger, and soft drink consumption at a young age can create a life-long preference for sweet foods and drinks.

We estimate, based on US evidence, about 10% of Australia’s obesity problem is due to these sugar-filled drinks.

Many countries have implemented or announced the introduction of a sugar-sweetened beverages tax including the United Kingdom, France, South Africa and parts of the United States. The overseas experience is tax reduces consumption of sugary drinks, with people mainly switching to water or diet/low-sugar alternatives.

There is strong public support in Australia for a sugar-sweetened beverages tax if the funds raised are put towards obesity prevention programs, such as making healthier food cheaper. Public health authorities, including the World Health Organisation and the Australian Medical Association, as well as advocates such as the Obesity Policy Coalition, support the introduction of a sugar-sweetened beverages tax.

What the tax would look like

We advocate taxing the sugar contained within sugar-sweetened beverages, rather than levying a tax based on the price of these drinks, because: a sugar content tax encourages manufacturers to reduce the sugar content of their drinks, it encourages consumers to buy drinks with less sugar, each gram of sugar is taxed consistently, and it deters bulk buying.

The tax should be levied on manufacturers or importers of sugar-sweetened beverages, and overseas evidence suggests it will be passed on in full to consumers.

We estimate a tax of A$0.40 per 100 grams of sugar in sugary drinks, about A$0.80 for a two-litre bottle of soft drink, will raise about A$400-$500 million per year. This will reduce consumption of sugar-sweetened beverages by about 15%, or about 10 litres per person on average. Recent Australian modelling suggests a tax could reduce obesity prevalence by about 2%.

image Author provided/The Conversation, CC BY-ND Low-income earners consume more sugar-sweetened beverages than the rest of the population, so they will on average pay slightly more tax. But the tax burden per person is small – and consumers can also easily avoid the tax by switching to drinks such as water or artificially sweetened beverages. People on low incomes are generally more responsive to price rises and are therefore more likely to switch to non-taxed (and healthier) beverages, so the tax may be less regressive than predicted. Although a sugar-sweetened beverages tax may be regressive in monetary terms, the greatest health benefits will flow through to low-income people due to their greater reduction in consumption and higher current rates of obesity. The revenue could also be spent on obesity programs that benefit the disadvantaged, reducing the regressivity of the tax. While the beverage and sugar industries are strongly opposed to any tax on sugar, their concerns are overblown. Most of the artificially sweetened drinks and waters, which will not be subject to the tax, are owned by the major beverage companies. A sugar-sweetened beverages tax will reduce domestic demand for Australian sugar by around 50,000 tonnes, which is only about 1% of all the sugar produced in Australia. And while there may be some transition costs, this sugar could instead be sold overseas (as 80% of Australia’s sugar production already is). A tax on sugary drinks is a public health reform whose time has come.

Authors: Stephen Duckett, Director, Health Program, Grattan Institute

Read more http://theconversation.com/a-sugary-drinks-tax-could-recoup-some-of-the-costs-of-obesity-while-preventing-it-69052

Business News

The Rise of Digital Marketplaces in the Australian Trade Sector

For decades, the Australian trade and construction sector operated almost entirely on word-of-mouth recommendations and local community networks. Small business owners typically relied on local newspa...

Daily Bulletin - avatar Daily Bulletin

How Immigration Lawyers Can Help

Introduction Visa decisions can shape employment, family life, study plans, travel, and future residence. A small omission can lead to delay, added expense, or refusal. Immigration lawyers assess l...

Daily Bulletin - avatar Daily Bulletin

How Industrial Drying Equipment Supports Efficient Processing

Many industrial processes require moisture to be removed from compressed air, products or process materials before they move to the next stage. Excess moisture can affect equipment performance, produc...

Daily Bulletin - avatar Daily Bulletin

Practical Ways a Whiteboard Can Improve Workplace Communication

Effective communication helps teams stay organised, share ideas and keep track of important information. While digital tools are now common in many workplaces, a whiteboard continues to provide a simp...

Daily Bulletin - avatar Daily Bulletin

Designing Eco-Friendly Custom Water Bottles for Your Next Event

The Evolution of Sustainable Event Merchandise Event planning has undergone a massive transformation over the last decade. Gone are the days when organizers could hand out cheap, single use plastic...

Daily Bulletin - avatar Daily Bulletin

Why Choosing a Professional Florist Melbourne Makes Flower Delivery Impactful

Flowers have a great power to speak when humans cannot express their feelings with right words. Flowers are the best gifts when you are celebrating a birthday or welcoming a newborn child into your fa...

Daily Bulletin - avatar Daily Bulletin

The Business Case for Choosing Australian Fabricators Over Imported Alternatives

For a long time, you might have defaulted to overseas suppliers when sourcing fabricated metal components for a project. The unit price was lower on paper, and the maths seemed straightforward. That...

Daily Bulletin - avatar Daily Bulletin

Australian organisations are relying on business continuity plans built for a far more predictable world

Tariff escalations, supply chain fragility, geopolitical events, and the ongoing threat of cyber disruption have reshaped the risk environment facing Australian organisations. The problem is that ma...

Daily Bulletin - avatar Daily Bulletin

How to Rent a Car for Uber in Melbourne: What Every New Driver Needs to Know

Starting out as an Uber driver in Melbourne is not as complicated as it sounds but getting the vehicle right is where most new drivers get stuck. Uber has strict requirements around vehicle age, condi...

Daily Bulletin - avatar Daily Bulletin

The Daily Magazine

Choosing an ELISA Format That Matches Your Target

A colorimetric ELISA ends with a plate that has developed color, and the instinct is to read more ...

Why Accurate Measurements Matter When Ordering Flatpack Cabinets

Ordering flatpack cabinets can make a renovation or storage project more manageable, but the proce...

How Long Does Interstate Freight Take in Australia?

If you have ever arranged for stock, equipment or materials to travel from one Australian state to a...

How AEC Firms Can Scale Faster Without Sacrificing Project Quality

Growth presents a fundamental dilemma for architecture, engineering, and construction firms: expan...

What Makes an Aesthetic Clinic Worth Going Back To?

Trying an aesthetic clinic for the first time can feel like a bit of a gamble. You can read review...

Elevate Your Morning Routine with Cafe-Style Coffee at Home with the Right Coffee Machine

There's something magical about that first sip of coffee in the morning. It’s more than just a bev...

Top Garment Steamers for Busy Professionals in Australia

The gap between garment steamers built for a quick touch-up and ones built to keep pace with a wor...

Correct Sleeping Posture to Minimize Back Strain

Most people don’t pay much attention to how they sleep until they start waking up with a stiff bac...

Why Product Longevity Matters for Sustainable Australian Buildings

Sustainability in building design is often associated with recycled materials, renewable resources a...