In his 2016 Budget, Britain’s Finance Minister George Osborne announced a sugar drink levy on drinks with more than five grams of sugar per 100 millilitres. This came as a surprise to most political commentators, despite the fact that public health authorities in the UK and other countries have been calling for such action for some time. Celebrity chef Jamie Oliver pushed for the levy which will be introduced in 2018 and has now called on Australia to follow suit.
Australian public health advocates and health experts reacted positively to the UK announcement and echoed Jamie Oliver’s call for a similar tax to be introduced in Australia.
However, some questions have been raised about the regressive nature of the tax with an economic analysis showing that the impact on low income households will be much greater than that on the more affluent.
The following is a sample of some of the reactions from stakeholders:
The Public Health Association of Australia (PHAA) welcomed the tax with President Professor Heather Yeatman saying that this is a perfect time for Australia to push to protect public health via a sugar tax on soft drinks as the Government reviews tax reform says.
“A sugar tax on soft drinks would benefit the health of Australians. Sugary soft drinks provide no nutritional value and evidence shows that people who are overweight are more likely to drink soft drink. The obesity epidemic in this country is similar to that in the UK. Australia needs to follow Britain’s example and implement a sugar tax on soft drinks to help lower obesity rates and improve public health,” said Professor Yeatman.
“If Australia were to proceed with a similar levy it would likely start with taxing the added sugar in soft drinks.” said Professor Yeatman. PHAA Key Election Priorities 2013 listed a tax/ley on selected nutritionally undesirable foods, including high added sugar drinks, as a key priority and revenue opportunity for the Australian Government.
“PHAA have been pushing for this levy for years and we now have a catalyst to make it a reality. Britain has provided a blueprint for Australia to follow and with the election approaching, this is a great time for the Government to review tax reform and how it could improve the health of all Australians while at the same time raising revenue,” said PHAA CEO Michael Moore.
“The income generated from the levy could be invested in public health initiatives including preventive programs and to promote nutritionally desirable foods for disadvantaged groups,” Mr Moore said.
— Dr Sandro Demaio (@SandroDemaio) March 17, 2016
Professor Margaret Allman-Farinelli, University of Sydney
“Young adults are the largest consumers of sugar-sweetened beverages and are gaining weight most rapidly. To avoid an obese future and chronic disease the tax is one strategy to decrease their intake along with another range of measures to address other dietary shortcomings and halt obesity.”
Dr Louise Baur AM, Professor of Paediatrics & Child Health, Children’s Hospital and Westmead Clinical School, University of Sydney
“I fully support a sugar levy in NSW and Australia, such as will occur in the UK. Sugar sweetened beverages should not be a part of the diet of children and young people as it contributes to poor dental health and the risk of excess weight gain.”
Professor Ian Caterson, Boden Institute of Obesity, Nutrition, Exercise & Eating Disorders, Charles Perkins Centre
“This is something we need to consider seriously and act on. With reducing childhood obesity being one of NSW Premier’s priorities, now is a great time to act. Sugar sweetened beverages (SSBs) contribute to obesity by providing extra, unnecessary energy. Such a tax will make people think about whether they need a SSB or whether water will do. If they do decide to buy a SSB, then the extra tax can provide much needed funds for health, or as in the UK for school sports activities.”
Renown Indigenous chef Clayton Donovan said that a sugar tax could benefit remote Indigenous communities but also said that any tax should be combined with subsidies for healthier options as well as improved education about nutrition.
The Rethink Sugary Drink alliance also commended the UK government for committing to introduce a tax on sugary drinks; and urged the Australian Government to investigate the effectiveness of a tax on sugar-sweetened beverages and to follow the UK’s lead.
Designed to effectively discourage consumption of a product that contributes substantially to poor diet and chronic disease risk, the tax will follow suit of other countries including Hungary, Mexico, France, and the Californian city of Berkeley, when they introduce the tax in 2018.
CEO of Diabetes Australia, Greg Johnson, said there is a direct link between regular sugary drink consumption and weight related chronic health problems including increasing your risk of type 2 diabetes by 22%.
“Many Australians underestimate the health problems related to excess sugary drink consumption including type-2 diabetes, cardiovascular disease, kidney disease, stroke and some cancers. Sugary drinks can also lead to tooth decay,” said Mr Johnson.
“A contributing factor to this is price and availability of sugar-sweetened beverages.”
Chair of the Public Health Committee at Cancer Council Australia, Craig Sinclair, said Australia is among the top 10 countries for per capita consumption of soft drinks.
“Research shows that a retail price increase of around 20 percent would be the most effective1 in reducing the consumption of these sugar-laden drinks,” Mr Sinclair said.
The coalition of health organisations behind Rethink Sugary Drink recommends an investigation by the federal Department of Treasury and Finance into tax options to increase the price of sugar-sweetened beverages relative to healthier options to change purchasing habits and achieve healthier diets. The coalition has five other recommendations to tackle consumption of sugar-sweetened beverages.
However, not everyone supported the call for a sugar tax. Former Coalition adviser Terry Barnes called it ‘lazy policy and lazy revenue’
— Terry Barnes (@TerryBarnes5) March 17, 2016
The impact of a sugar tax was modelled by Anurag Sharma and colleagues from the Centre for Health Economics at Monash University who found that a volumetric tax (similar to that being introduced in the UK) would result in a $13.80 a week impact on low income households (comprising 0.15% of income) compared with a $10.10 impact on higher income families (only 0.04% of income).
The reaction from the Government to the calls from the public health sector have not been positive so far with Assistant Health Minister Fiona Nash reportedly stating that a sugar tax is not on the agenda.
“The government’s position at the moment is not to consider a sugar tax. I’m not open to any discussion on that,” says @SenatorNash
— Katherine Cullerton (@K_Cullerton) March 17, 2016
The response from the Greens was more positive however:
— Katherine Cullerton (@K_Cullerton) March 17, 2016
The ABC also reported that the beverage industry predictably had opposed the calls for a similar tax to be introduced in Australia.
— ABC News (@abcnews) March 17, 2016