Richo joins call for an Australian sugar tax

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By Leith van Onselen

Former federal ALP minister, Graham Richardson, has joined the chorus calling for Australia to implement a tax on sugar. From The Australian:

Probably no product in the world that has managed to penetrate more countries and cultures than Coca-Cola… Chocka block with sugar this addictive drink plays its part in the obesity plague… Aided and abetted by our predilection for sugary foods we are now seeing kids as young as 12 presenting with diabetes. There are now more overweight schoolchildren than ever…

The big sugar companies act much like the tobacco industry did 40 years ago…

It is worth remembering that diabetes leads to a host of other serious health problems. Diabetics are far more likely to suffer from heart trouble, poor eyesight and diminished blood flow to the feet. This adds enormously to our health budget and as this diabetes epidemic explodes those costs can only rise substantially. State and Federal governments must act on this crisis and they must act now…

While politicians can now expect to be bombarded with a welter of fake research, they must introduce a tax on sugar and they must not delay in implementing it. The aim would be to slowly decrease soft drink consumption. The teeth of our children will improve and that also reduces the health bill. Cigarette smoking has been hit hard by a combination of increased taxes and graphic information campaigns. The same must happen with sugar.

The arguments for limiting sugar in beverages are strong.

The Grattan Institute’s report entitled A sugary drinks tax Recovering the community costs of obesity showed that more than one in four Australian adults are classified as obese – up from one in ten in the early 1980s – whereas 7% of Australian children are now obese:

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In addition to personal costs, Grattan showed that obese people receive more healthcare than other people, with taxpayers funding most of the costs of those services at a cost of around $5.3 billion in 2014-15:

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Grattan also estimated that about 10% of Australia’s obesity problem is due to sugar sweetened beverages.

In a similar vein, Credit Suisse’s October 2013 report, entitled Sugar: Consumption at a crossroads, showed clearly that Australia has one of the highest sugar consumption rates in the world, clocking in at more than double the world’s average:

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

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And that there is a direct link between sugar consumption and soaring health costs, with over 86% of doctors from around the world agreeing that sugar is linked to the development of obesity, type II diabetes, and non-alcoholic fatty liver:

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Moreover, the costs of diabetes on our health systems is particularly high:

“Diabetes type II is now affecting close to 370 million people worldwide, with one in ten US adults affected by it. The costs to the global healthcare system are a staggering USD 470 billion according to the most recent estimates from the International Diabetes Federation, and represent over 10% of all healthcare costs. In the USA alone, the healthcare costs tied to diabetes type II are estimated at USD 140 billion, compared to USD 90 billion for tobacco-related healthcare costs. even more worrisome is that these numbers are growing at a rate of 4% a year, much faster than for obesity (1-2%). By 2020, the annual cost to the healthcare system globally will reach USD 700 billion and the people affected will be close to 500 million…”

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Regular readers will know that I support measures to limit sugar in beverages, although I recognise that they are by no means a panacea.

In my opinion, there also needs to be a complete overhaul of Australia’s dietary guidelines, including Australia’s Health Star Rating System, which too often ignores the prevalence of sugar while demonising natural saturated fats.

The key focus of Australia’s health authorities should be to simply encourage Australians to avoid packaged and processed foods in favour of natural whole foods.

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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.