Billions saved and longer lives: the case for sugar, salt and fat taxes

University of Melbourne

Tuesday, 21 February, 2017

Reigniting the debate over ‘junk food’ taxes, University of Melbourne modelling has shown that Australia could save $3.4 billion in healthcare costs by introducing a package of taxes on sugar, salt, saturated fat and sugary drinks, while subsidising fruits and vegetables.

Such a package would result in an additional 2.1 years of healthy life for every 100 Australians alive in 2010, according the research, which has been published in PLOS Medicine.

A tax on sugar in foods like confectionery and ice-cream would result in 1.2 additional years of healthy life per 100 alive people in 2010, researchers from the Centre for Public Health Policy found. 

Lead researcher Dr Linda Cobiac said taxes on salt, saturated fat and sugary drinks contributed the remaining health gain. “Few other public health interventions could deliver such health gains on average across the whole population,” Dr Cobiac said.

Dr Cobiac said while many Western countries are proposing or implementing taxes to curb diet-related disease, policymakers have had little information on the cost-effectiveness of combining various taxes and subsidies.

Co-author Professor Tony Blakely said the research team experimented with different combinations of taxes and subsidies to minimise financial pain, with the modelling showing Australia could achieve maximum health impact for less than 1% extra impact on household budgets.

“Critics often say taxes on unhealthy food make life tougher for low-socioeconomic households, but we’ve demonstrated that the right structuring of incentives means the financial impact on households is negligible, while their health improves,” he said.

Dr Blakely said while taxes on foods high in sugar, salt and saturated fat generated the largest health gains, the benefits from a tax on sugary drinks alone were still substantial.

“It is a good first policy step to make and is supported by groups such as the Medical Colleges of Australia.”

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