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  • Hal Swerissen

Why hasn't Australia got a sugar tax?

Obesity is a major concern for public health. It causes significant harm for individuals and the community. Food and drink with added sugar are an important cause of obesity. Sugar Sweetened Beverages (sugary drinks) contribute significantly to added sugar in the diet. There are good arguments for a sugar tax on sugary drinks. But a sugar tax has been strongly resisted by the food and beverages industry.


Obesity is a major problem


The most recent national health survey indicates that obesity is rising rapidly in Australia. About a third of adults are now obese and two thirds of the population is overweight or obese. The number of overweight and obese young people has increased by nearly 10 per cent in the last 3 years.


Obesity is linked with increased risk for a range of health problems, including diabetes, cardiovascular disease and cancer. Mortality is around 20 per cent higher for people who are obese. About 7 per cent of the total burden of disease in Australia or about 300,000 disability adjusted life years were lost due to obesity in 2011.

These lost years incur personal costs to individuals. Estimates of personal costs range from about $8 billion to $12 billion in 2015.


Obesity also results in costs to the community. These include health care costs, foregone tax and additional welfare costs. These costs have been estimated at around $5 billion in 2015.

Which brings us to harm reduction.


In order to reduce the harms associated with obesity we have to understand what is causing obesity. Obesity rates were relatively stable and around 10 per cent in the 1970s. They have gone up three fold since then. Our genomes haven’t changed much in that time.


Obesity rates in Japan remain around 5 per cent. Rates in the United States are now around 40 per cent. Clearly environmental differences and environmental change are the major cause of increased obesity over the past 40 years.


Added sugar is a major cause of obesity


Obviously, we gain weight when we consume more energy than we expend. On average the energy people consume each day has gone up by about 15 per cent since the 1970s in the United States. Energy expenditure has remained about the same. The difference is stored as fat.


One of the main reasons energy consumption has gone up is because we have increased added sugar in our diet by around 300 per cent over the past 40 years. The average Australian now consumes around 12 teaspoons of added sugar a day - about 10 per cent of total energy intake.


A logical starting point for harm reduction is therefore to reduce the level of added sugar in our diet. Sugary drinks contribute significantly to added sugar. Around 36 per cent of Australians consume at least one sugary drink per week. This has not changed much since 2011. Over 50 per cent for 18-34 year olds consume at least one sugary drink per week.


Sugary drinks have no nutritional value and they have close substitutes such as artificially sweetened drinks and water.

A sugar tax could reduce harm caused by sugary drinks


Grattan Institute has argued that sugary drinks contribute about 10 per cent of the obesity problem in Australia with the community bearing about $500 million in direct health and social costs that are paid for through the taxes.


The costs of sugary drinks to the community could be recovered. An excise levy of of 40 cents per 100 grams of sugar in sugary drinks would raise about $500 million and reduce consumption by about 15 per cent. This could reduce obesity by about two per cent.


Industry opposes sugar taxes


Not surprisingly, proposals for a sugar tax are strongly opposed by the food and beverage industry and sugar producers.They argue that sugary drinks are not the main cause of obesity, economic incentives will not work, a sugar tax is inequitable and governments should not interfere with individual choice (even when they lead to harm). These arguments don't bear scrutiny.


First, sugary drinks are not the only cause of obesity, but they are a major contributor. Systematic reviews of independent research have concluded that regular consumption of sugary drinks causes obesity.


Despite arguments to the contrary, sugar taxes lead to both a modest reduction in consumption of sugary drinks and they raise significant revenue to offset community costs associated with obesity. It is too soon to tell whether they reduce obesity. About 40 countries and a number of regions and cities have implemented sugar taxes. The World Health Organisation supports taxing sugary drinks.


It is true that people on lower incomes are more likely to consume sugary drinks and therefore pay more sugar tax. But they also have the greatest rates of obesity and are more likely to benefit from reducing sugar consumption. By switching to alternatives such artificially sweetened drinks or water they avoid paying sugar tax.


Critics of sugar taxes argue that that individual choice should not be constrained (even it is harmful to the individual) provided no one else is harmed. Nanny state governments should stay out of people's lives.


However, the nanny state argument doesn’t stack up. The community generally accepts that choice often needs to be constrained by government to protect us and others from harm.

We know it is difficult and costly to be fully informed about risk and harm. We therefore expect governments to regulate products and services to prevent risk, whether that be buying a car, taking a plane trip or having surgery, even if that limits our individual choices.


Industry tries to muddy the water


Unsurprisingly, the food and beverage industry has sought to muddy the research in advocating against intervention to promote its own interests. They do so through organised campaigns, lobbying, advertising and research. This includes social and broad band media, political campaigns, donations, the creation of front organisations.


Their aim is to win the argument with key stakeholders and the public to influence political decision making to protect their interests. These tactics are well known and have been widely used in relation to other public issues such as tobacco, asbestos, gambling and alcohol.


The Australian Beverages Council has been open about its recent major increase in lobbying efforts and its success in keeping the Coalition and the ALP from supporting a sugar tax.


Research is not enough


It took the best part of 40 years for public health advocates to get effective measures in place to reduce the harm caused by tobacco in Australia, despite the fact that the research on tobacco harms was clear by the 1960s.


There is now plenty of research demonstrating that added sugar is significant cause of obesity and that sugar taxes are a strategy for reducing added sugar consumption. But rigorous, independent research is not enough. Without sustained, organised public health advocacy, effective public policy to address obesity is unlikely.



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