• Health experts claim a 20% tax on soft drinks could reduce health spending by up to $29 million. (AAP)Source: AAP
The federal government could reduce its health spending by up to $29 million, and save 1600 lives per year, if it implemented a 20 per cent tax on all sugar-sweetened drinks.
Yasmin Noone

14 Apr 2016 - 8:22 AM  UPDATED 14 Apr 2016 - 12:49 PM

If the Australian parliament introduced a 20 per cent tax on sugary drinks, it would reduce rising obesity, heart disease and diabetes rates, save thousands of lives, and generate an extra $400 million in government revenue a year, a health expert claims.

University of Queensland School of Public Health researcher, Dr Lennert Veerman, is calling on the federal government to follow the example of the UK parliament and adopt a tax on sweetened drinks to discourage consumers from buying sweetened beverages.

His platform is based on a study published in PloS ONE today, showing that a 20 per cent tax could reduce the nation’s annual health expenditure by up to $29 million.

Led by Dr Veerman, the research finds that a sugary drinks tax would result in 800 fewer new type 2 diabetes cases each year. After 25 years, around 1,600 fewer deaths would have occurred, and there’d be 4,400 fewer people living with heart disease.

A sugary drinks tax would result in 800 fewer new type 2 diabetes cases each year. 

“The evidence suggests that if sugary drinks are priced higher then people will consume less,” says Dr Veerman.

“If they consume less sugary drinks, then they gain less weight. And the rates of diabetes, stroke and a number of other illnesses come down.

“The country avoids incurring health care costs down the line. The tax also generates money, because you don’t have to treat people with all these diseases. And, at the same time, people get better health. There’s no better buy.”

A sugary drinks tax would be applied to non-alcoholic sugar-sweetened beverages, like carbonated soft drinks and flavoured mineral waters, but exclude fruit juices, fruit drinks, energy drinks, milk-based drinks and cordials.

The additional revenue raised as a result would be directed towards subsidising the cost of healthier foods or employing strategies to combat childhood obesity.

As is the case with most taxes on goods, low-income earners could bear the brunt of the additional cost. The tax would not take a person’s income or wealth into account but instead be charged as a flat rate calculated on the price or volume of the sugary drink.

“Some people will say that’s not fair. But the issue with that is that low income earners will also be the group who will get most of the benefits as they suffer more diseases and are more price-sensitive.”

A sugary drinks tax is not currently on the political agenda in Australia even though Dr Veerman believes it should considered as part of the Australian government’s tax reform process.

With one in four children and 67 per cent of adults now overweight or obese, we need decisive action by government to address the growing health burden.

“This type of tax hasn’t been imposed before [in Australia] because some companies want to sell these sugary drinks. And the food industry is a powerful player in politics so that is a challenge.

“They use their political influence to promote the narrative that responsibility for drinking [or not drinking] sugary drinks is up to you. And that message is not working…mostly because of the environment we live in.

“There is cheap, junk food everywhere around us and that includes sugary drinks. People are not designed to resist all the temptations currently around them. They could use a little nudge every now and again to do the right thing.”

UQ worked on the study with the World Health Organization Collaborating Centre for Obesity Prevention at Deakin University, and Victoria’s Obesity Policy Coalition.

Obesity Policy Coalition’s executive manager and study co-author Jane Martin says sugary drinks were the largest source of added sugar in Australian children's diets.

“With one in four children and 67 per cent of adults now overweight or obese, we need decisive action by government to address the growing health burden of overweight and obesity in this country," Ms Martin says.

"The research shows that 85 per cent of Australian grocery buyers would support a sugary drinks tax if the revenue was used to reduce childhood obesity.”

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