Should Australia levy a sugar tax? [Updated]

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By Leith van Onselen

Following the UK Government’s decision to implement a tax on sugary soft drinks, celebrity chef, Jamie Oliver, has called on Australians to “pull your finger out” and do the same.

Oliver’s call has been backed by the Obesity Policy Coalition (OPC) CEO, Jane Martin:

“Yes. We have high consumption, we have a problem with obesity and a tax on sugary drinks is something that should be implemented,” she said…

“People are concerned about sugar. Eighty-five per cent of people surveyed support a tax on sugary drinks if the money is used to support programs for childhood obesity,” Ms Martin said.

“I think with our public, it shows that they understand that price is a way of influencing behaviour.”

But as expected, the beverage industry has hit out at the idea:

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“If the Government was to introduce a tax here, which we hope they’ll err on the side of reason, it would be a slippery slope,” the council’s chief executive Geoff Parker said.

“The average Australian gets less than 2 per cent of their daily kilojoules from soft drinks, so simply to slap a tax on the 2 per cent whilst ignoring the 98 per cent — as well as the issue around the lack of physical activity — we think really is a bandaid solution for a far more complex problem.”

Personally I believe that a “sugar tax” on soft drinks is a great idea, although it is not without problems.

First, what about fruit juices, which are in many cases as high or higher in sugar than soft drinks (see below graphics)?

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ScreenHunter_9762 Oct. 15 13.58 ScreenHunter_9763 Oct. 15 13.59

Second, what about all of the so-called “healthy” low fat goods on the market that contain oodles of sugar, such as low fat yogurt?

Nevertheless, the growing incidence of “diabesity” (diabetes and obesity) is a growing issue in Australia, and a tax on sugary beverages is at least a start.

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On a side note, I believe the whole food rating system in Australia to be a farce. How, for example, can natural greek yogurt receive only a 1.5 start health rating when sugary low fat yogurt receives a high rating? Similarly, how can butter – which has only three ingredients (cream, water and salt) – receive only a 0.5 star rating, when margarine created through an industrial process containing dozens of weird ingredients receives a high rating?

If the government wants to stop diabesity, the answer is fairly simple: encourage people to cut-out refined carbohydrates (including sugar) and replace them with unprocessed natural foods that are high in fat (including saturated fats). This way of eating keeps blood sugars low, lowers the body’s insulin response, and prevents insulin resistance and diabetes (see below chart).

ScreenHunter_9793 Oct. 16 11.24
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I have been following a low-refined carbohydrate, high fat natural foods diet for the past year and have never felt better. My body weight and fat (which was already in the healthy range) has dropped considerably, my visceral fat (i.e. fat around my organs) has shrunk to negligible levels, and my blood pressure has dropped. I have also taken my fitness (boxing) to a new level, such that I am now planning on undertaking my first amateur fight late this year (at age 38).

In short, implementing a sugar tax is a good start, but the public health focus really needs to be on getting people off processed foods and to stop fearing fat derived from natural sources, including saturated fat.

***UPDATED***

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Below is the video from Catalyst that kicked my Low Carb, High Fat journey off:

And below are a list of great books that I have read on this topic:

THE BIG FAT SURPRISE: Why Butter, Meat & Cheese Belong in a Healthy Diet – By Nina Teicholz

Good Calories, Bad Calories – By Gary Taubes

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Why we get fat – By Gary Taubes

The Art & Science of Low Carbohydrate Living – By Jeff Volek and Stephen D Phinney

That Sugar Book (also a film) – By Damon Gameau

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And my favourite podcast on the topic: The Livin La Vida Low Carb Show with Jimmy Moore and guests.

[email protected]

About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.