Probable Consequences of Incorporating Sugar Tax in Australia

This letter calls out to the federal government to implement taxes on sugary and unhealthy foods in Australia. The Obesity Policy Coalition recommends the levy of tax on unhealthy food and sugar sweetened Beverages (SSB) to lower the chronic diseases suffered by the citizens. The revenue generated from the levy of tax on unhealthy food should be devoted to the promotion of healthy food for the betterment of health of the citizens. The letter also discusses the benefits and advantages of imposing the levy on sugar in SSBs.

Running head: PUBLIC HEALTH LAW AND POLICY
Public Health Law and Policy
Name of the Student
Name of the University
Author Note

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Ministry of Health,
P.O BOX 9848
Canberra Act 2601, Australia.
20 September 2018
Dear Minister,
Re: Probable Consequences of Incorporating Sugar Tax in Australia
In collaboration with the Australian National Health (ANH) and Medical Research
Council’s Australian Dietary (MRCAD), the Obesity Policy Coalition (OPC) would opt to
advice and campaign for the backing of policy intervention, which strives to uplift eating healthy
to diminish disease and obesity rate in Australia. This letter strives to call out to the federal
government, as it still lags behind to implement taxes on sugary and unhealthy foods. The federal
government, on the other hand, is of view that incorporation of such taxes would make the

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citizens discontent and it would also lead to the levy of taxes on several other junk and fast food
products. In the position of Senior Policy and Advocacy Officer of OPC, it is advised to the
minister that levy of tax on unhealthy food and sugar sweetened Beverages (SSB) would be
beneficial for lowering the choric diseases suffered by the citizens. It is recommended that the
revenue generated from the levy of tax on unhealthy food should be devoted to the promotion of
healthy food for the betterment of health of the citizens. It would also help to generate fund for
the low Socioeconomic Position households (SEP).
Obesity Policy Coalition (OPC) claims to be a NGO that is concerned with the issue of
obesity in Australia. It was established in 2006 for focusing on chronic diseases like diabetes,
cancer that results out of unhealthy habits and eating disorders. It was established by the
collaborative effort of the Diabetes Victoria (DV), VicHealth, Cancer Council Victoria (CCV)
and the Global Obesity Centre at Deakin University. OPC aims at effecting changes in the law
and order pertaining to prevention of obesity, especially among children. It is to be noted that the
country is presently facing a high rate of obesity issues and diseases related to it. Recent statistics
states that 63.4% of adults and 27.4% of children between 5-17 years of age suffer from
overweight issues or obesity? (Opc.org.au. 2018).
The main aim and objective of OPC is to ascertain, investigate and promote improved
policy and regulatory measures based on evidence that is required to diminish the issues of
obesity in Australia. The OPC is concerned with the proper functioning of various policies that
analyze and prioritize to abolish obesity, particularly in children. OPC tries to influence the
government agencies to deal with the issue of obesity. OPC ensures to provide guidelines and
leadership programs for helping policy professionals and researchers for working on the issues of
overweight and obesity. Along with taking the policy initiatives, OPC strives to influence

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various regulatory and legal initiatives as well ("Action areas - Obesity Policy Coalition", 2018).
Such legal and regulatory initiatives strive to uplift and strengthen the existing law and order
pertaining to the issues of obesity and diseases relating to it. The organization requests various
regulatory bodies and agencies related to food and nutrition to take measures on the marketing of
healthy foods and disregarding the unhealthy ones ("Who are the Obesity Policy Coalition? -
Obesity Policy Coalition", 2018).
As per Veerman et al,. (2016), it is highly recommended to curb the consumption of
Sugar Sweetened Beverages (SSB) as its consumption is excessively high in Australia. It would
only be possible if a steep tax were levied on it, which would automatically diminish the
consumption. Present statistics confirms that that Australian consumes sugary drinks like soft
drinks excessively which is one of the major reasons behind chronic diseases like diabetes. There
are data that clearly shows that there has been a consumption of 1.1 billion liters of SSB in 2015
bought for 2.2 billion Australian dollars, excluding other junk and unhealthy food. It even
exceeds the guideline provided by WHO on the limitation of the consumption of SSB
(Opc.org.au, 2018). It was found out that the major consumer of SSB was among the age group
of 14-18 years.
The levy of tax on unhealthy food can be considered as a measure to reduce its
consumption by the Australians. Cobiac et al., (2017) points out that as per the economic theory
of price elasticity, which states that price of a commodity controls its demand; similarly, the
price of the unhealthy things would fluctuate their demand as well. Therefore, when price of
unhealthy things would be increased or they would be heavily taxed, their consumption would
naturally decrease and so would the rate of chronic diseases (Kaiser et al., 2013). OPC lays down
a statistical data that a hike of 20% revenue on SSB would observe a decline in 12.6%

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consumption of it, which would reduce 2.7% and 1.2% of obesity rate in men and women
respectively. Additionally, the research of OPC show that such reduction of obesity rate would
diminish the percentage of disease like cancer, diabetes and Cardio-vascular issues. This would
eventually result in 16, 000 lesser case type-II diabetes, 1,100 lesser cases of stroke and 4,400
lesser cases of cardio-vascular diseases.
Studies show that Australia evidenced 1,55,000 deaths that could have been prevented if
SSB consumptions were cut down. An effective levy of tax on such harmful food products would
gave the country an expenditure of $8 billion. As directed by Moodie et al. (2013) the BMI index
data says that a change in eating habit would help in altering the rate of morbidity and mortality
among the Australians. For example, the reduction of sugar level in SSB by 5% would reduce
deaths to 26, 400 that occurs from chronic diseases relating to obesity, while a drop in sugar
level in SSB to 375 ml would drop the number of deaths to 13, 495.
Tax on SSB is mandatory as considered by the multiple experts, Australians and Global
Peak Health bodies. World Health Organisation motivated numerous Governments to levy taxes
and subsidies over the SSBs as it can influence the people to consume food products which are
affordable as well as healthy. The Government can get influenced to this issue of tax on SSBs as
dietary diseases could be avoided, rather than entertaining it (Veerman et al., 2016). OPC stated
that the discussion paper of the recent federal government, asking for tax submission reform,
merely referring to a tax on artificially sugar sweetened beverages for instance of a method of
corrective tax used in the various parts of the world. There has been no instances of
consideration of food taxes, no matter how the National Preventive Health Taskforce has
recommended to revisit the pricing policy for the helping to shape diets.

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Taxation in sweetened beverages would assist in regulating and managing the drinks
industries in a way to reduce the SSB consumption to a greater length, particularly for the groups
that are exposed to the risk (Lal et al., 2017). As an example, low socio-economic position in
Australia is among the largest groups who gets affected by the high numbers of dietary related
diseases. It is very important to mark that the children that belongs to the various low Socio-
Economic position families, are most likely to consume a huge quantity of SSBs as compared to
those who belongs to families that are high Socio-Economic Position (Manyema et al., 2014).
Hence, the advantages of interference is that it would help in reducing the sell, manufacture,
purchase and consumption of highly SSBs by the low socio-economic children. OPC has
established that a current review of the impact of an SSB tax on SEP has observed that the
households with lower income will be paying a larger proportion of income in additional tax.
Regardless, the financial liability among all households would be less, with comparatively minor
dissimilarities between households with lower and higher income.
A well principled tax policy has its main purpose to manage and change numerous
purchase behaviours that are simple, practical, equitable and efficient. Consequently,
development of levy policy on sugar sweetened drinks are required further analysis that would
determine the required reduction in consumption of sugary drinks to improve the health and
well-being of the population of Australia (Moretto et al., 2014). As an instance, the policy of
health levy should always consider the objective of the policy, that is, to reduce the consumption
of sugar with the help of imposing tax on SSBs aiming at improvement of health conditions
(Basu & Madsen, 2017). The levy of tax can be collected as an excise or a sales tax. Hence, the
sales tax will be paid by the consumers at the point of sale, whereas the excise tax will be paid by
the one who manufactures. It would enable the levy of taxation in regard to the amount and

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quantity of actual beverage production, might have the result of discouraging wholesale or bulk
purchasing and decline the portion size, but there are no encouragement or motivation for the
manufacturers to reduce the amount of sugar concentration in the product (Opc.org.au. 2018).
Nevertheless, it may be convenient to administer the policy as the volume would be mentioned
over the packaging.
Regardless of that, the health levy returns, obtained from the taxation on SSBs could be
used to identify and address the diseases, which are diet based. As for instance, the revenue
collected might be used for the purpose of campaigns for health promotions or can be used to
promote the healthy foods and subsidize the families that earns less (Backholer et al., 2016).
OPC mentions that there are several local governments which have shown their commitments to
ensure that health programs are undertaken for the prevention. The programs like LiveLighter
Campaigns should be formulated to reduce the rate of chronic diseases. Moreover, these
programs and campaigns can raise funding interventions that might include policies to increase
the accessibility and availability of healthy foods for the Low Socio-Economic status.
The foremost strength in respect to levy taxes on SSB is that, the levy would help in the
supervising the reason behind the increasing rate of overweight and obese people in Australia
(Waterlander, Mhurchu, & Steenhuis, 2014). In a recent study it was shown that, more than one
out of four adults in the Australia are obese (Backholer & Martin, 2017). This affects the health
of the individuals due to the uncontrolled SSB consumption. The introduction and levy of tax on
the sugary products would be advantageous for savings for individuals as the high prices of these
sweetened beverages would make consumers to opt for a healthy and affordable food products.
OPC would propose the Government to impose a tax on sugared beverages. It might help in

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recollecting many of the excess cost, which was spent on obesity the obesity management and
also assist to reduce its rate (Opc.org.au. 2018).
Despite the strength which can be obtained from imposing the levy on sugar in SSBs,
there are some benefits and advantages, which can be obtained from the same. As an example,
the part of SSBs in gaining weight and cannot be associated with calorie analysis (Escobar et al.,
2013). Various research has indicated that the consumers that consume soft drinks rarely, pay off
the additional energy gained from the consumption of SSBs by reducing their food consumption.
Thus, the excessive intake of energy is higher comparatively to the consumption of only sugared
beverages. Hence, soft drinks may produce bigger energy consumption as compared to the other
products, as the sugared beverages are known to stimulate the appetite.
Obesity Policy Coalition endeavours to provide assurance to the Minister that with the
approval of the levy of taxes on SSBs, the better management and improvement of the health of
Australian population, which are affected by the issues like overweight and obesity, can be
ensured.
Yours faithfully
Senior Policy and Advocacy Officer
Obesity Policy Coalition

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References:
Opc.org.au. (2018). Retrieved from http://www.opc.org.au/what-we-do
Backholer, K., & Martin, J. (2017). Sugar-sweetened beverage tax: the inconvenient
truths. Public health nutrition, 20(18), 3225-3227.
Basu, S., & Madsen, K. (2017). Effectiveness and equity of sugar-sweetened beverage
taxation. PLoS medicine, 14(6), e1002327.
Cobiac, L. J., Tam, K., Veerman, L., & Blakely, T. (2017). Taxes and subsidies for improving
diet and population health in Australia: a cost-effectiveness modelling study. PLoS
medicine, 14(2), e1002232.
Escobar, M. A. C., Veerman, J. L., Tollman, S. M., Bertram, M. Y., & Hofman, K. J. (2013).
Evidence that a tax on sugar sweetened beverages reduces the obesity rate: a meta-
analysis. BMC public health, 13(1), 1072.
Kaiser, K. A., Shikany, J. M., Keating, K. D., & Allison, D. B. (2013). Will reducing sugar‐
sweetened beverage consumption reduce obesity? Evidence supporting conjecture is
strong, but evidence when testing effect is weak. Obesity Reviews, 14(8), 620-633.
Lal, A., Mantilla-Herrera, A. M., Veerman, L., Backholer, K., Sacks, G., Moodie, M., ... &
Peeters, A. (2017). Modelled health benefits of a sugar-sweetened beverage tax across
different socioeconomic groups in Australia: A cost-effectiveness and equity
analysis. PLoS medicine, 14(6), e1002326.

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Manyema, M., Veerman, L. J., Chola, L., Tugendhaft, A., Sartorius, B., Labadarios, D., &
Hofman, K. J. (2014). The potential impact of a 20% tax on sugar-sweetened beverages
on obesity in South African adults: a mathematical model. PloS one, 9(8), e105287.
Moodie, R., Stuckler, D., Monteiro, C., Sheron, N., Neal, B., Thamarangsi, T., ... & Lancet NCD
Action Group. (2013). Profits and pandemics: prevention of harmful effects of tobacco,
alcohol, and ultra-processed food and drink industries. The Lancet, 381(9867), 670-679.
Moretto, N., Kendall, E., Whitty, J., Byrnes, J., Hills, A. P., Gordon, L., ... & Comans, T. (2014).
Yes, the government should tax soft drinks: findings from a citizens’ jury in
Australia. International journal of environmental research and public health, 11(3),
2456-2471.
Opc.org.au. (2018). Retrieved from http://www.opc.org.au/downloads/policy-briefs/reduce-
sugary-drinks-in-australia.pdf
Opc.org.au. (2018). Retrieved from http://www.opc.org.au/downloads/policy-briefs/the-case-for-
australian-tax-sugar-sweetened-beverages.pdf
Veerman, J. L., Sacks, G., Antonopoulos, N., & Martin, J. (2016). The impact of a tax on sugar-
sweetened beverages on health and health care costs: a modelling study. PloS one, 11(4),
e0151460.
Waterlander, W. E., Mhurchu, C. N., & Steenhuis, I. H. (2014). Effects of a price increase on
purchases of sugar sweetened beverages. Results from a randomized controlled
trial. Appetite, 78, 32-39.

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Opc.org.au. (2018). Retrieved from http://www.opc.org.au/who-we-are

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