Introduce a sugary drinks tax to tackle obesity and diabetes

Australia should introduce a sugary drinks tax to reduce obesity and diabetes, says a new Grattan Institute report.

Sickly sweet: It’s time for a sugary drinks tax shows that obesity has tripled in Australia since 1980 and diabetes has nearly tripled since 2000.

Diabetes contributes to one in 10 Australian deaths, leaves thousands with sickness and disability, and costs government budgets billions of dollars a year.

One of the main reasons Australia has such high rates of obesity and type 2 diabetes is that we consume far too much sugar.

Sugary drinks are the biggest single source of sugar in our diets, and they increase people’s risk of developing obesity and type 2 diabetes.

Popular drinks such as Solo and Coke have as much as 10 teaspoons of sugar in just one 375ml can.

That’s almost the entire maximum recommended daily intake of sugar for an adult. And more children than adults drink sugary drinks.

There are sugary drink taxes in more than 100 countries, including the UK, France, Portugal, and Mexico.

The taxes work: they slash sales and get manufacturers to put less sugar in their drinks.

In the UK, one in three products had more than 8 grams of sugar per 100ml before a sugary drinks tax was announced. Four years later, only one in 12 had that much sugar.

Sugary drink taxes will take time to make people healthier, but there are already promising signs. Studies have found reduced obesity among girls, less dental decay, and fewer children having to go to hospital to get teeth removed.

The report calls for Australia to introduce a tiered tax that targets the drinks that have the most sugar, with a top rate of 60c per litre, and no tax on low-sugar drinks.

Grattan Institute modelling shows that our proposed tax would reduce consumption of the drinks with the most sugar by about 275 million litres a year, or the volume of 110 Olympic swimming pools.

The average Australian would drink nearly three quarters of a kilogram less sugar each year.

The tax is all about health, not revenue, but it would still give the federal government an extra half a billion dollars in the first year.

Manufacturers could avoid the tax by cutting the amount of sugar they put in their drinks, and consumers could avoid the tax by switching to low- or no-sugar drinks.

Disadvantaged Australians would be the biggest winners because they are hardest hit by diabetes and obesity.

Experience around the world demonstrates that the financial impact on households, industry, and sugar farmers would be small.

Despite shrill warnings from vested interests, the introduction of sugary drink taxes has gone smoothly overseas.

‘Australia needs many policies to improve our diets and our health,’ says report lead author and Grattan Institute Health Program Director Peter Breadon.

‘But a tax on sugary drinks is the cheapest and easiest to implement.

‘The government should get on with it, as part of a multi-pronged assault on the twin scourges of obesity and diabetes.’

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