Why a tax on sugar-sweetened beverages may not be a bitter pill

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The Federal government will release its annual budget next week, on May 11. There will inevitably be winners and losers, but the overall sentiment is that the budget benefitted from ‘Australia’s ‘world class’ defence against the coronavirus’.

One of the key components of our robust defence, and a critical success determinant of our COVID-19 pandemic response, have been our hard-working Public Health service. Public Health issues now frequently occupy the centre of the political and media stages and have captured the wholesale attention of diverse stakeholders and communities.

The high levels of interest in, and support for public health interventions, have created great potential opportunities to further invest in and support the wellbeing of our population at all levels. There is wide consensus that we must expand our focus beyond COVID-19 and infectious diseases, and tackle the wicked problems of obesity, and the proliferation of chronic conditions that threatens to undermine the sustainability of our healthcare systems.

The time is therefore right to rekindle respectful discussions about implementing a tax on soft drinks in Australia. There are three reasons why a tax is the right way to reduce consumption of sugar-sweetened beverages (SSB).

First, the international literature provides compelling evidence that taxation of SSB is an effective method to reduce calorie and sugar intake, and that this has the potential to reduce the attributable and progressively increasing incidence of obesity,  chronic diseases and their associated healthcare costs  across socio-economic strata. There is also little or no evidence of tax-substitution of SSB with, for example, sugary foods or alternative beverages like full-cream milk or alcohol.

Second, most Australian consumers already support an SSB tax. The 2017 ‘Tipping the Scales’ report summarises the unanimous recommendation of more than 30 community, public health, academic and medical groups for a SSB health levy.

Third, the tax will raise revenue that could offset some of the negative population health costs of SSB, an approach supported by the Grattan Institute. Despite arguments from the soft drink industry, there is little evidence that SSB taxes are regressive, or disproportionally and unfairly affect lower socio-economic households. In fact, some soft drink industries are already (voluntarily) reducing the sugar-content in many of their products.

There are three caveats for implementing an SSB tax.  One, consider a volumetric tax. Research by Sharma et al found that a volumetric tax will result in greater weight loss and a lower average per capita annual tax burden on low-income households compared with a flat rate (or valoric) sales tax. Two, investigate and include other potentially useful interventions and combine them with taxation in a comprehensive, national strategy to reduce SSB consumption. Finally, meaningful engagement of all relevant stakeholders during every part of the process.

The successful response to the COVID-19 pandemic provides compelling evidence of our inherent capacity and capability to make tough decisions and rapidly reorganise fundamental aspects of our lives that would have seemed inconceivable before. In comparison, a tax on sugar-sweetened beverages may not be such a bitter bill after all…



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