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Australian researchers say subsidising fresh fruit and vegetables would ensure the impact of food taxes on the household budget would be negligible. Photograph: Dave and Les Jacobs/Getty Images/Blend Images
Australian researchers say subsidising fresh fruit and vegetables would ensure the impact of food taxes on the household budget would be negligible. Photograph: Dave and Les Jacobs/Getty Images/Blend Images

Australia would save $3.4bn if junk food taxed and fresh food subsidised, says study

This article is more than 7 years old

Health experts tout health gains of taxing saturated fat, salt and sugar and subsidising fruits and vegetables, with no dent on household food budgets

Health experts have developed a package of food taxes and subsidies that would save Australia $3.4bn in healthcare costs without affecting household food budgets.

Linda Cobiac, a senior research fellow at the University of Melbourne’s school of public health, led the research published on Wednesday in the journal Plos Medicine.

Cobiac and her team used international data from countries that already have food and beverage taxes such as Denmark, but tweaked the rate of taxation and also included a subsidy for fresh fruit and vegetables so the total change to the household budget would be negligible.

They then modelled the potential impact on the Australian population of introducing taxes on saturated fat, salt, sugar and sugar-sweetened beverages, and a subsidy on fruits and vegetables. Their simulations found the combination of the taxes and subsidy could result in 1.2 additional years of healthy life per 100 people alive in 2010, at a net cost-saving of $3.4bn to the health sector.

“Few other public health interventions could deliver such health gains on average across the whole population,” Cobiac said.

The sugar tax produced the biggest gains in health, followed by the salt tax, the saturated fat tax and the sugar-sweetened beverage tax.

The fruit and vegetable subsidy, while cost-effective when added to the package of taxes, did not lead to a net health benefit on its own, the researchers found.

A co-author of the paper, Prof Tony Blakely, said this was because although a fruit and vegetable subsidy alone would encourage people to eat more fresh foods, previous studies of consumer behaviour had found they would spend the money saved on sugary foods.

The researchers suggest introducing a tax of $1.37 for every 100 grams of saturated fat in those foods with a saturated fat content of more than 2.3%, excluding milk; a salt tax of 30 cents for one gram of sodium above Australian maximum recommended levels; a sugar-sweetened beverage tax of 47 cents a litre; a fruit and vegetable subsidy of 14 cents for every 100 grams; and a sugar tax of 94 cents for every 100ml in ice-cream with more than 10 grams of sugar per 100 grams; and 85 cents for every 100 grams in all other products.

The taxes exclude fresh fruits, vegetables, meats and many dairy products.

“You need to include both carrots and sticks to change consumer behaviour and to encourage new taxes,” Blakely said. “That’s where this paper is cutting edge internationally.

“We have worked out the whole package of taxes with minimal impact on the budget of the household, so you can see an overall gain for the government. The government would be less interested in the package if it was purely punitive, but this provides subsidies and savings to health spending that could be reinvested back into communities and services.”

He said taxing junk foods also prompted food manufacturers to change their products and make them healthier to avoid the taxes.

“For those who might say this is an example of nanny state measures, let’s consider that we don’t mind asbestos being taken out of buildings to prevent respiratory disease, and we’re happy for lead to be taken from petrol. We need to change the food system if we are going to tackle obesity and prevent disease.”

A health economist at the Grattan Institute, Stephen Duckett, said the researchers had put together a careful and strong study and set of tax and subsidy suggestions. “This is a very good paper,” he said.

“In my view, we should be starting to tax sugary drinks as a first step. Nearly every week there’s a new study citing the benefits of a sugary drinks tax and and nearly every month another country adopts it as a policy. It’s quickly being seen as an appropriate thing to do to address the obesity epidemic.”

A Grattan Institute report published in November found introducing an excise tax of 40 cents for every 100 grams of sugar in beverages as part of the fight against obesity would trigger a 15% drop in the consumption of sugary drinks. Australians and New Zealanders consume an average of 76 litres of sugary drinks per person every year.

In a piece for the Medical Journal of Australia published on Monday, the chair of the Council of Presidents of Medical Colleges, Prof Nicholas Talley, wrote that “the current lack of a coordinated national approach is not acceptable”.

More than one in four Australian children are now overweight or obese, as are more than two-thirds of all adults.

Talley proposed a six-point action plan, which included recognising obesity as a chronic disease with multiple causes. He also called for stronger legislation to reduce unhealthy food marketing to children and to reduce the consumption of high-sugar beverages, saying a sugar-sweetened beverage tax should be introduced.

“There is evidence that the food industry has been a major contributor to obesity globally,” he wrote. “The health of future generations should not be abandoned for short-term and short-sighted commercial interests.”

More on this story

More on this story

  • Many high-street frappés contain more sugar than a Mars bar

  • Soft drinks tax cannot solve obesity crisis on its own, academics say

  • Aspartame sweetener to be declared possible cancer risk by WHO, say reports

  • Replacing sugar with sweeteners does not affect weight control in long term, WHO says

  • Sugary drink taxes could be threatened by Trump administration, experts say

  • Price of sugary soft drinks could rise by 8p a can when tax introduced

  • The truth about emulsifiers: are they destroying our gut health?

  • Wales to clamp down on junk food meal deals to tackle obesity

  • Junk food ads targeting children banned in non-broadcast media

  • NHS England proposes hospital ban on sugar-sweetened drinks

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