A report by the Grattan Institute, an Australian public policy think tank, called upon the government to introduce a 40 cent tax on every 100g of sugar in soft drinks, which would see the price of a 2l bottle of soft drink rise by about 80 cents.
The tax would raise about $500m a year, the report claimed. It would also trigger a 15% drop in the consumption of sugary drinks, it projects, as people switch to water and other drinks not subject to the tax.
“We recognise that a tax on sugary drinks is not a ‘silver bullet’ solution to the obesity epidemic – that would require numerous interventions at an individual and population-wide level,” the authors wrote.
“But it will address these third-party costs of obesity by reducing sugar intake from sugar-sweetened beverages.”
More than 15 jurisdictions have already introduced a version of the sugar tax, including the United Kingdom, France and parts of the United States.
Though largely welcomed by health groups, the tax is not without controversy. The Australian Beverages association has argued that it is “not the answer”. Added sugar consumption is already in decline, it said, and soft drinks only constitute a small part of the average Australian diet. It also pointed to a similar tax in Mexico, which, despite having an impact on the sales of soft drinks, was affecting the country’s poorest disproportionately.
It argued that education, rather than taxation, was a more applicable way of improving the diets of the Australian population.
Ellie Clayton
