A sugar tax would save lives and the Budget

By Leith van Onselen

New Australian research co-written by the Obesity Policy Coalition and the University of Queensland’s School of Public Health has found that a 20% tax on sugary soft drinks could raise $400 million a year, reduce annual health expenditures by up to $29 million, and save more than 1,600 lives over 25 years if it was implemented in Australia. From The Canberra Times:

In the first 25 years of a sugary drinks tax there could be 16,000 fewer cases of type 2 diabetes, 4400 fewer cases of heart disease and more than 1000 fewer cases of stroke, according to the study.

“This sort of study … provides the evidence base needed to support policy decisions by government, like taxing sugary drinks,” said Obesity Policy Coalition executive manager Jane Martin, who co-wrote the study.

“It’s quite hard to have a policy that is likely to reduce body mass index, because it is quite hard for people to lose weight. This is a policy proposal that would support people to consume less sugary drinks, leading to reduced BMIs, reduced incidences of disease and then reduced deaths.”

According to the study, a tax in Australia could lead to a 12.6 per cent reduction in consumption of sugary drinks, the largest contributors of added sugars in Australians’ diets…

“Money raised by a tax can be used in many ways, like subsidising health food for the poor, or fitness education programs. We find politicians are sceptical about this tax because beverage industry say they will affect the poor, but we find that is not the case.”

Bring it on, I say.

As noted previously, Australia has one of the highest sugar consumption rates, along with the USA, Brazil, Argentina and Mexico. These countries each clock in at more than double the world’s average sugar consumption:

ScreenHunter_12218 Mar. 23 09.05

Australia is also one of the most obese nations on earth:

ScreenHunter_12220 Mar. 23 09.09

There are several channels in which sugar drives obesity.

First, sugar is a simple carbohydrate made up of two molecules, glucose and fructose. This bond is split-up in the stomach before being absorbed. Research shows that glucose primarily drives fat storage under the skin, whereas fructose deposits visceral fat around organs, such as the liver.

Excess sugar intake can also accelerate the development of Type 2 diabetes. When extra liver fat is made, that ends up obstructing the workings of the liver, and you can end up with ‘insulin resistance’, which is a precursor to Type 2 diabetes. Basically, the liver doesn’t work effectively, so the pancreas has to excrete extra insulin in order to shift blood glucose into your cells. This insulin also tells your body not to burn fat for energy, thus making your body store fat.

Second, sugar manipulates the hormones insulin and leptin, thus turning-off the receptors that make us feel full. It is particularly dangerous when dissolved in things like soft drinks, since it is instantly and easily absorbed.

While placing a tax on sugary drinks is no panacea, given the prevalence of sugar and processed foods throughout the Australian diet, it is a bloody good start and represents ‘low hanging fruit’ from a public health perspective.

It’s a no-brainer.

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Unconventional Economist
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    • Whilst that article reflects the truth that science is not immune from fashions and institutional power, it significantly understates the evidence that corporate lobbying and corruption have had in getting us to here.

      The science was suppressed not just by egos but by corporate lobby groups that didn’t want the information out, scientists were paid off and information flow was cut off.

      • Concur aj.

        When important civil institutions are captured by incentives which ultimately bastardize their traditional roles, too the public, everyone eventually suffers…

  1. Easier said than done.
    For children, cut out fizzy drinks and carbohydrates, and…
    For adults, cut out alcohol and carbohydrates.
    Bingo! 25 kilos will drop off the average overweight adult in about 12 months just by abstaining from wine and bread….

    • Janet, normally I don’t buy into these socialist pogroms – but… there is a real lack of choice in the market place. Everything has sugar. And yeah its tough, you pull up to a big petrol station with wall to wall drinks, and no sugar free. Kids scream they are thirsty – even the energy drinks are just sugar rushes. What is the program here??? Suger free has been around for yonks – look at the success of Coke Zero!!!

      Yet every supermarket has sugared drinks isle’s everywhere. I have even given up my iced coffee fix when I realised it has more sugar in it than full strength Coke.


      • Josh MoorreesMEMBER

        check out the label for just plain old milk. Nearly half the sugar per volume of coke. Then fruit which people have been drummed into to eat more of is just natures candy, some are absolutely chock full of sugar.

      • It’s true fruit is full of sugar. But you try eating 5 apples in a sitting – flat out eating one. But in a standard kids fruit juice there might be as much juice (i.e. apple sugar) as from 5-10 apples. So fruit is sugar plus fibre.

        It’s a fair point however, a lot of fruit (and vegetables) have become sugar in disguise so keeping a handle on this is important.

      • Tassie TomMEMBER

        Yes – I’ve been off the Farmers Union for the last 10 months. Had one every morning for the last 20 years before that. It’s the one thing I miss.

      • There’s a thing called water.

        Last I checked it has no sugar in it.

        Edit: I have two little ones. They drink water most of the time, as a treat they have unsweetened milk or fruit juice (and not the cheapo concentrate stuff). Rarely will they drink anything with added sugars or artificial sweeteners.

    • As parents we aim to keep our kids to the recommended 4 teaspoons of added sugar a day (occasional treats aside). This has basically wiped out all processed foods – juices and soft drinks aren’t even worth discussing they’re so bad. Start looking in every processed food and it’s a sugar disaster.

      There is almost nothing outside of the fruit section in coles and woolies that we can buy anymore – and who buys fruit from there? There is some serious inertia that will hold up reform here…

    • Today's Empire Tomorrow's Ashes

      cut out Animal protein and fat

      Try that for 6 months, whilst #CTFU

      Bye bye inflammatory markers, bye bye cholesterol etc

  2. “reduce annual health expenditures by up to $29 million”

    Is that all? Given the black hole in our health care system, this is just overtime pay at Westmead for a couple of weeks (exaggeration of course).

    • No that’s not all….true figure would be orders of magnitude greater than this amount should a tax be successfully implemented and the proceeds are fed directly into the health budget.

      If the government don’t act on this then they have no balls and no vision for the future of the nation’s people or finances.

  3. Sydney Uni seems to be absolutely failing to correct a paper that supports sugar but which has false basis:
    Sydney uni increasinly seems to have been captured by commercial interests or other non-scientific method types..
    Another example is holding back the names of some brands of pet food that research says is killing some adult pets where, by conincidence, a pet food company provides substantial sponsorship to the Vet faculty

    • Uni’s have become defacto IP and debt mills run like corporations… see Science Mart…

      Skippy…. privatize knowlage at its inception whilst narrowing the vision all with crapifying conditions for those seeking knowlage…

    • There does appear to be some fudging going on here. Mexico did well better with just a 10% tax that it started about 18 months ago.

      Research published in the British Medical Journal found that the introduction of a 10 per cent tax on sugar-sweetened drinks in Mexico resulted in a 12 per cent reduction in sales

      According to the blog above it appears that “research co-written by the Obesity Policy Coalition and the University of Queensland’s School of Public Health has found that a 20% tax on sugary soft drinks could”… “lead to a 12.6 per cent reduction in consumption of sugary drinks, the largest contributors of added sugars in Australians’ diets…”

      Is that a manipulation by the reseachers to make the pain appear more expensive or is it that Mexicans are not as price elastic as Australians…or is it something else?

  4. ..could raise $400 million a year, reduce annual health expenditures by up to $29 million, and save more than 1,600 lives over 25 years..

    So 64 lives saved a year at a cost to tax payers/sugar consumers of $6.25 million per person? I hate to reduce the cost of a life to a number (I’m not trying to be insensitive), but that sounds exorbitant. Especially given that individuals can just choose not to consume as much sugar and improve their health outcomes.

    • I’d prefer to see the costing more about taxing the full cost of the product. At the moment there is a profit that socialises the cost of the product – lets just tax the products so that the cost of obesity and related diseases are built into the product.

      A health campaign like tobacco would be good as well – of course so many governments are conflicted by all the subsidies they provide to the sugar industry. Same problem as the 70s when the issue was first properly addressed.

    • “given that individuals can just choose not to consume as much sugar”

      Actually No…. not when its put into everything, along with deceptive labeling.

      Skippy… worst part is the lobbing by relevant industry’s over decades to stop full disclosure.

      • In my view it’s common knowledge that soft drinks (the subject matter of this particular sugar discussion) have very high sugar content and it’s not like people are consuming all this sugar with hidden side effects with unexpected health impacts later in life… people are getting fatter, they know it’s their diet and or fitness levels. If they want to look at the reasons their scales are being worked harder then the information is out there, readily available, even if the packaging labels aren’t transparent.

      • BB…

        See aj. comment and then look into some of the best psychologists working for the F&B industry.

        Skippy…. look if child psychology goes after kids as young as 4 to format their cognitive brand recognition…. wellie… must be the parents fault or the consumers… eh…

    • Check out the doc i put at the top BB – its a Canadian film but explores the role of the industry propaganda and the misleading labels.

      This really is right up there with tobacco for ruining lives and for the malfeasance of the peak industry groups in pretending their is no harm. People make choices, but under the weight of such misleading information those choices can hardly reflect freedom to choose.

    • FiftiesFibroShack

      The whole individuals and person choice thing is naïve in the extreme. It would work in a world where everyone is informed and makes rational decisions, but – outside the mind of libertarians – that world does not exist

  5. With about 70% of Australians either obese or overweight, introducing such a tax would save a hell of a lot more than $29M in annual health expenditures in the longer term… now is the time to introduce these measures!!!!

  6. Overweight people are so inherently unwell – there are a plethora of associated health issues that are exacerbated from being overweight that are often overlooked too…. diabetes, heart disease, cancer…

    If we can cut the fat then we cut so many other related health issues and associated expenditure…. it really is the root cause of a huge amount of public health budget expenditure in the western world…

    best part about a new tax like this is it falls largely on those who are most likely to be a burden on the health system now or in the future. thanks University of Queensland’s School of Public Health and the Obesity Policy Coalition !!!! legends

    • As long as you are not basing overweight on the bmi metric. BMI overweight people have identical health outcomes to people in normal category. I forget what it’s called but BMI plus waist measurement works extremely well for categorizing health outcomes.

      • Robert –

        you really are overcomplicating a simple issue

        you don’t need a calculator or a spread sheet to asses whether someone is overweight or obese… you just have to look at their ankles.

  7. Lets tax sport participation, because sport leads to injuries or worn out joints.
    Lets tax sitting at your desk, because it leads to spinal injuries and weight gain.
    Lets tax tax tax tax!

    I’m not a small-gov anti-taxer, but I am very cautious of any organisation that would personally benefit from passing judgement on others. It is only recently that the myths about butter being worse for you than margarine have begun to be busted. I’ve used margarine since I was a kid, and only used butter in cooking recipes that demanded it. Now I hear seed based oils may have health risks. Why don’t we just tax everything, because living is the first requirement for dying?

    • What about for a start , lets just make those that would seek to make profit build in all the negative externalities before they jump up and down waving about their wonderful profit. You’re paying the tax anyway – who do you think funds all that diabetes, tooth decay extraction, amputation etc. At least this starts to put the tax in the right spot – rather than just going to the poor taxpayer while the giant global sugary drink oligopoly whisks the profit offshore…

      • Who decides what the negative externalities are? If I eat a low sugar diet, but have a teaspoon in my coffee every now and then, am I part of the calculation?

        What about salt? High sodium diets are bad for you. Lets try and discourage humans from eating salt.

        Red meat has strong links to bowel cancer. We need to build those costs in and deduct them from Australia’s farmers. If they didn’t want to get taxed on their red meat, they should’ve been chicken farmers or fish farmers or something. I’m sure the interior of NT is a good place for aquaculture.

        Gluten is really bad for celiacs. We need to start charging wheat growers.

        Honey is another form of sugar, lets charge the apiarists.

        Fish can contain mercury or other compounds…lets tax fishermen just to be safe.

        In fact, lets tax every possible food source except maybe soy. We can all life off of tofu so as to avoid being a nation of overweight people with bowel cancer & high sodium.

        Also, I’m not sure that govt offers medical assistance with dental. Pretty sure I’ve never been asked for my medicare card for that. Even private health dont like covering dental.

      • They’re pretty easy to measure actually – in particular the childhood tooth decay is epic. And it shouldn’t be lost, that these sorts of arguments were also given to corporate tobacco sales as well.

        The point is you’re not banning it, you’re merely saying there is sufficient evidence here to show your product includes the following externalities therefore it will be taxed accordingly. Yes you could apply this to other products and arguably it should.

        Corporatising profits and socialising losses is a fundamental structural challenge with modern market economies. There is an incentive to mislead and to lie because those costs do not come back to the organisation that makes the profits.

        You realise before they developed sewer systems there was a group of people making exactly the same claims as you make now and didn’t want the ‘tax’.

    • Whilst I have little doubt that all the sugar’s making people fatter, I to am always a little cynical about this sort of “pronouncement”. Just from having been around long enough to see a few things go from healthy to unhealthy to healthy again.

    • You do pay to cover injuries from sport. Club insurance; covered ~80% of the cost of each of my surgeries (knee reconstructions, etc.) plus private health insurance.

      And someone does pay for sitting at a desk. Worker’s comp.

      As for doing nothing ’cause the concensus might change, what a cop out. Make the best ruling based on the best information. If information changes then change the ruling. The current weight of evidence seems pretty damning for sugar.

      We’ll die of old age waiting for perfect proof to be handed to us in a neat and tidy bundle, so I can only conclude that those who argue to do nothing in the face of compelling evidence are either vested interests (without ethics), irrational contrarians (who seem a bit pathalogical), or ignoramuses.

      And yes, everybody is entitled to an opinion. But not all opinions are equal.

  8. interestingly Brazil is high on the sugar chart but low on the obesity chart – the women there are hot.

    I think a better option would be to tax people who are fat as they are the real health risks. I don’t see why I should pay more for a coke just because others drink too much of the stuff. And like smoking taxes, a sugar tax would unfairly target those who are most dependant and generally least able to pay which is a bit unfair.

    Some justify the taxes as a way to recoup the additional health costs. I’m not so sure. we all die of something. does a smoker who dies in hospital of lung cancer at 60 cost anymore than a healthy person who dies at 90 after having been in and out of hospital for various ailments over the previous 20 years whilst getting a pension? From a health perspective perhaps there is justification, but certainly not from a tax recoup perspective.

  9. I for one applaud anything that reduces the amount of fatties around.

    Lets go for broke and just out law the sale of junk foods and or the supply of such foods to fatties entirely.

    They arent as well informed as ourselves you know (supposedly)

  10. The nanny state strikes back.

    Seriously, most of the western world is looking at legalising some banned drugs, and now we want to criminalise sugar ?

    Prohibition ended almost a century ago. We’re about an inch from banning tobacco completely and already criminal gangs and bikies are filling the space.

    Haven’t we learned anything ?

    • Don’t conflate ‘nanny state’ with taxing externalities.

      I don’t think there are many sensible people (other than vested interests) that are pro prohibition on anything. Personally i think people should be able to grow their own tobacco, weed etc if they want to, but that does not mean that i think business should be able to market it and sell it.

      The point is here that marketers, lobbyists etc cover over the damage to ensure the profit stays with the corporate (usually flying off to a tax haven) while the damage and social cost stays with the local tax-payer. These profits are often aligned with very misleading aggressive advertising that seeks to cover-over or hide or normalise the damage. Playing into the hands of these businesses is ‘nanny state’ stuff. Allowing people to make informed decisions and not be held liable for the egregious marketing of another is the opposite of this.

      • So people are vulnerable sheep and only an elite body of bureaucrats can guide their decisions ?

        No business has ever been able to force people to buy their products, but we can’t choose to refuse the blanket regulations of bureaucrats.

        Whether you smoke one pack of cigarettes a month, or buy 1 cigar a year, or drink 1 soft drink, they think you owe them more tax.

        The amount of tobacco excise collected outweighs the health costs to the public system, and I doubt a sugar tax will do much to reduce obesity seeing as sugar isn’t only found in fast food and there are other harmful substances and ingredients that won’t be taxed.

      • Jono…

        First problem is industry lobbyists having more leverage with elected public servants. Next is your wonky use of “force” when that’s not even the issue, when deception is. Lastly taxing stuff makes it a hot potato in the public debate and helps shine a light on topics.

        Skippy…. maybe if people don’t like the tax they might consider the worth of producing goods which have so many social costs w/ zero benefits….

      • “No business has ever been able to force people to buy their products, but we can’t choose to refuse the blanket regulations of bureaucrats.”

        There’s overwhelming evidence that fraud and lies (dressed up as marketing) and often massaged through by incentives for sellers, has encouraged people to make some really horrible decisions – both in tobacco, financial services and just about every other product that can do harm.

        This is not about taking away choice, it’s about giving back real choice. How many old smokers wish they had all the information when they were younger – but they didn’t Camel mild helped you be cool and stay cool…

  11. Considering the past 40 years of nutritional studies/science and the resulting policies/health recommendations – I do not trust this crap in any way shape or form. I have zero faith any kind of sugar tax will make a dent on the average Aussies waistline. I don’t care what this study claims – where is the detail of all the variables involved in this study anyway – I want to see all the assumptions they have made.

    And I am absolutely against further complicating Australia’s tax system – how many different taxes do we need? What is the administration cost of this tax going to look like? What stops the food industry from taking a small hit on margins to keep up the volume?

    Nope, far from convinced.

  12. Yep. There isn’t a problem in Australia that can’t be fixed with either a new tax or a fine. And there is always the cheer squad at MB to support every new nanny state proposal that comes along. I get the feeling the members at MB won’t be happy until we are all being taxed at 90%+ because lets face it- big brother knows best and will always use our resources more efficiently than we could ever hope to ourselves.

    • The problem with that argument is that you already pay a sugar tax – it’s just paid through the health system taxes and it’s quite high. While the businesses and corporates that profited from the damage don’t pay it. Even for a EMT proponent what you have is a system where there is no incentive for the market to provide alternatives because the externalities are subsidised by society.

      • And we are still going to be paying for those health costs after the tax too. All the revenue from the tax will vanish in administration costs and inefficiencies regardless. The tax wont deter anyone from 1$ 2L bottles of fizzy, it certainly wont arrest the obesity epidemic. The food industry is more agile and much smarter than our policy makers, they will retain their volumes of whatever is cheapest/most profitable for them to push onto the consumer one way or the other.


        Look at this thing! Near 500cals, 96g of Sugar. People spend 8$~ on that with the emotional connection that it is somehow healthy (its a green tea super smoothie – doesn’t it just sound so good for you?). What level of tax would be required to drive down sales of this thing? Will the tax even apply to this? That is two days of sugar for my current routine in a single drink.

        Attacking a single macro-nutrient with a tax is not going to achieve anything.

      • caeos…

        I disagree…. just the discussion about a sugar tax is opening up debate and informing people about the subject.

        Skippy…. before it was have a coke and a smile…

      • How many are not aware excess sugar is bad? If the goal of the tax is to cause discussion/debate, well I am not going to argue that it wont achieve that.. A new tax picking winners and losers down the isles of our supermarkets seems like a heck of a way to go about discussing health thou…

  13. Happy to have a massive tax on cane sugar if $5000/year is given to every poor voter.

    That would kill the claims that a sugar tax will hurt the poor.

  14. First stop is sugar tax on soft drinks for added sucrose, then what move onto other forms of sugar like Lactose and Fructose. Where does it end? tax on fresh fruit, milk.

    Why does the government need to get involved with nanny state taxes, everything should be eaten in moderation. Why should the whole be punished for the few that don’t have any self control?