Flat White

Why not tax obesity instead of sugar?

16 January 2018

1:30 PM

16 January 2018

1:30 PM

Once upon a time, New Year’s resolutions were the purview of the individual. You made an unwritten pact with yourself to read more books or to join a gym. Sometimes it worked, more often it didn’t. But the point was the individual’s application and willpower to improve their lives.

But that’s not good enough for our Nanny state betters. As the year started, they decided Australia’s collective New Year’s resolution should be to go on a diet. Whether we need to or not.

The Australian Medical Association recently released its Position Statement on Nutrition 2018, in which it stated that “Governments should consider … price signals to influence consumption” as a way of combating obesity.

Aside from being wonderfully typical public policy double-speak, it’s worth noting the AMA only supports specific kinds of price signals: ones that increase government spending and/or taxes. Not for them is a price signal, say, in the form of a Medicare copayment. No, the AMA instead proposes a wonderful new revenue generator with which to tempt our governments — a tax on sugary beverages.

The AMA’s narrative runs: obesity is bad, consuming sugary drinks helps make some of us obese, so let’s reduce sugary drink consumption by making it more expensive for everyone.


You may have noticed some sleight of hand there. First, most Australians are not obese, so why should they suffer a tax increase to combat a problem they aren’t contributing to?

Second — and perhaps more importantly — where is the evidence a sugar tax will actually lead to obese Australians becoming non-obese?

After all, there are good reasons to think it won’t. As obese consumers are much more likely to value high-calorie foods than non-obese consumers (hence why they are obese in the first place) they are much less likely to reduce their consumption of sugary beverages when prices go up.

What is more likely to cause any fall in consumption as a result of introducing a sugar tax is healthy people reducing their demand for the drinks, an outcome which has no benefit to the health system. Moreover, even if some obese consumers reduce their intake of sugary beverages this doesn’t mean they will turn to healthy alternatives instead. It seems highly unlikely that someone craving a sugar hit replaces Coca-Cola with water.

The health lobby’s narrative begs the question: if the problem is obesity then why not target obesity? Unlike smoking, the consumption of sugar is not by itself a problem. The reason seems to be that honesty would be impolite.

It would be impolite, but very honest, for the medical profession to admit that what they really object to is the lifestyles of working-class Australians. The profession should honestly answer the question of why other high-calorie drinks and foods favoured by the elite (such as, say, champagne or fancy coffee shakes) get a free pass. Aren’t they also concerned about the bad choices that the well-to-do make?

These holes in the effectiveness of the sugar tax could easily be solved by targeting the behaviour you actually want to discourage, people becoming obese. Taxing Australians who are overweight solves the two fatal flaws of the sugar tax. First, Australians with healthy lifestyles are not punished for drinking the odd Fanta here and there. Second, obese Australians have a direct incentive to undertake a whole host of behaviours that would reduce their weight and improve their health outcomes. Lose weight (any way you can) and save money. Simple really. Simply authoritarian too.

An obese tax is so extreme in its nanny-stateness that it makes one wonder why the medical profession would suggest a suboptimal sugar tax as an alternative. Maybe it is much easier to demonise an inanimate plant extract than it is to demonise lifestyle choices. Unfortunately, it is also highly dishonest, immeasurably authoritarian and economically destructive.

Matthew O’Donnell is a Senior Research Fellow at the Centre for Independent Studies.

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