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Taxing junk food, discounting vegies could extend lives, reduce health costs
Wednesday, 15 Feb 2017 03:21:32 | Karen Percy
The price of ice-cream would increase by 65 per cent under the proposal. (iStockphoto)
A sugar tax could lead to longer lives and reduced health costs if introduced with other measures encouraging healthier eating, researchers at the University of Melbourne say.
In an article to be published in the PLOS (Public Library of Science) Magazine, modelling by the university's Centre for Health Policy concludes that taxing foods that are high in sugar, salt and saturated fats — as well as subsidising fruit and vegetables — would also save $3.4 billion in healthcare costs.
"The study suggests that taxes and subsidies on foods and beverages can potentially be combined to achieve substantial improvements in population health and cost savings to the health sector," the article reads.
"The modelling illustrates the potentially large benefits of combining food taxes and subsidies for improving population health and reducing health sector spending."
It said a sugar tax alone would result in 1.2 additional years of healthy life per 100 Australians, while a combination of taxes and subsidies would add 2.1 years using the same measure.
The researchers' model was based on Australia's population in 2010.
"The Australian Government should follow the lead of France, Mexico, the UK, and other countries in developing a policy for taxing and subsiding foods and drinks to improve public health," the article said.
The research crunched data from a number of sources in Australia — food consumption figures from nutrition surveys, supermarket data to determine food costs, and forecasts of disease rates based on the population in 2010.
| Product | Price | Proposed new price | Change in price per serve |
|---|---|---|---|
| Cadbury milk chocolate bar 50g | $2.02 | $2.22 | 10 per cent increase |
| Nestle Peters Ice Cream Original Vanilla 2L | $6.09 | $10.05 | 65 per cent increase |
| Coca Cola soft drink bottle chilled 600ml | $3.00 | $3.28 | 9 per cent increase |
| Coles Sausages Classic Beef 560g | $3.30 | $3.87 | 17 per cent increase |
| McCain Pizza Family Supreme frozen 500g | $6.53 | $7.12 | 9 per cent increase |
| Coles Fresh Apples Pink Lady prepacked 1kg | $5.78 | $4.37 | 25 per cent decrease |
Source: PLOS Medicine, based on 2010 prices
It also used the experience of intervention models in Denmark in particular, as well as the UK, the US and New Zealand to help approximate how consumers would behave when prices fluctuated.
"This is a feasible intervention," said the report's co-author, Professor Tony Blakely.
Tax could see price of ice-cream rise by 65 per cent
Under the modelling, foods were taxed based on the units of sugar, the units of saturated fats and the units of salt they contained.
| Type | Proposed tax/subsidy |
|---|---|
| Saturated fat | $1.37 per 100g |
| Excess salt | $0.30 per 1g |
| Sugar-sweetened beverage | $0.47 per litre |
| Sugar | $0.94 per 100ml ice-cream, $0.85 per 100g sugar |
| Fruit and vegetable | $0.14 per 100g (subsidy) |
Source: PLOS Medicine
"Some foods that had all — high salt, high sugar, high saturated fat — would have a bigger price increase than those that had, say, just saturated fat, but not high sugar or salt," Dr Blakely said.
A basket of goods used in the report showed a chocolate bar would cost about 10 per cent more, while ice-cream, with high levels of sugar and fat, would rise as much as 65 per cent.
The cost of a kilogram of apples would fall by a quarter.
The researchers deliberately set about to find a combination of taxes and subsidies that would be "fiscally neutral" for consumers.
The aim was for "no change in expenditure, because they would shift their consumption and slightly reduce their energy intake", Dr Blakely said.
The recommendations can expect resistance from the producers of foods that are seen to be unhealthy.
Geoff Parker from the Australian Beverage Council described it as "a new GST".
"There's no evidence anywhere in the world that these types of taxes have any discernible impact on public health," he said.
"It's really disappointing that in 2017, the only solution being put forward to address a complex problem like obesity is tax, then another tax, then another tax.
"We need to be having a smarter dialogue around how to address the nation's expanding waistline."
The researchers beg to differ, but they know they have got a PR battle to fight.
Dr Blakely advises a gradual approach - first to put a tax on sugary drinks, a measure which already has some community support.
"It's a sensible place to start politically because it's an identified, targeted food group," he said.
If that worked, he added, then "we can widen it out and then have a system of taxes and subsidies that benefits more people, saves more money".
"That feeds through to changed disease rates, like diabetes obviously, which then changes the costs that people get in the health system and changes life expectancy."
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