Sugar tax prompts behaviour change, offsets costs

“The state has no authority to subject people to death and injury in certain kinds of … accidents just because it hopes others will be saved in other kinds of accidents … The state has no authority to take chances with a person’s body, the ultimate private property”

THAT quote is from a website opposing compulsory seatbelts, but it could just as easily be from one that opposed vaccination, fluoridation of water supplies, or any one of a raft of other public health interventions.

Government attempts to encourage healthier behaviour in citizens will always expose tensions between the rights of individuals to make choices about their lives and the welfare of the community as a whole.

Particularly when the intervention relies more on the stick than the carrot: education and health incentives are one thing, penalties and taxes quite another.

You only have to look at the decades-long fight against increasing regulation and taxation of tobacco products to see how desperate the opposition can be.

With the battle against Big Tobacco well advanced, at least in the developed world, the new frontline appears to be sugar.

As the obesity rate continues its upward spiral, accompanied by its chronic disease mates, governments and public health advocates are on the lookout for strategies to reduce the burden on the public purse.

One idea that keeps cropping up is that of a sugar tax.

Such taxes are often criticised for being regressive, because people who earn less pay more as a proportion of their income than do wealthier people.

That’s generally the case with any consumption tax (unless it's on polo ponies or private Learjets). The same charge has been levied against tobacco excise.

If people on lower incomes are hit harder by a new tax, the argument goes, they may have less money to spend on necessary, healthy items such as fruit and vegetables, leading to worse health outcomes in the long term.

That assumes no change in behaviour, and behavioural change is, of course, the point.

It’s a hard point to pin down, though.

Smoking rates have been on the decline in recent decades in Australia and elsewhere, but it’s no easy task to determine how much of the credit goes to increased tobacco excise and how much to the multitude of other anti-smoking initiatives governments have implemented.

A group of Australian researchers have, however, risen to the challenge of trying to work out how a tax on sugary drinks might affect consumer behaviour, particularly that of people on lower incomes.

Unsurprisingly, their modelling suggests that such a tax would have more financial impact on people at the lower end of the socioeconomic scale, although with the additional cost estimated at 60c per week with a tax of 20%, the cost to the individual is relatively small.

Would such a small increase in cost change behaviour? These researchers draw on overseas experience to argue it would, and that the effects would be greatest in lower income households.

While the tax itself might be regressive, they argue, the health gains experienced by those in the lowest socioeconomic categories could mean that they ended up better off over all, even on a purely financial level.

After all, health care costs also represent a higher proportion of income for people on lower incomes.

For the health system as a whole, the researchers estimate that the tax could lead to savings of $1.73 billion across the lifetime of the population cohort.

It would also raise an estimated $643 million annually, money that could be used to help allay concerns about the tax’s disproportionate impact on those with low incomes.

“There is evidence in Australia that earmarking the tax revenue for subsidising healthy food, tackling childhood obesity, and supporting children’s sport and health promotion initiatives would raise the public support for such a tax,” the researchers write.

Do I hear cries of “nanny state”?

You could argue that it’s just good economic rationalism to expect the purveyors of unhealthy products to contribute to covering the costs those products go on to impose on the health system.

And, if we’re talking individual liberty, it’s worth asking how much freedom we consumers really have in a world where misleading food labelling makes it hard to know exactly what we’re eating and healthy foods cost considerably more per kilojoule than the fatty, sugary junk that is increasingly part of our diets.

Disclosure: Jane McCredie ate a chocolate brownie while writing this article.

Jane McCredie is a Sydney-based health and medicine writer.

 

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