Every five minutes an Australian develops diabetes. It’s become one of the fastest growing chronic health conditions in the nation, with almost 2 million people affected.
While type 1 diabetes is an auto-immune disease, type 2 diabetes – which accounts for more than 1.3m cases of diabetes in Australia and is increasing at the fastest rate – is largely preventable, with obesity the strongest risk factor.
A parliamentary committee investigating the impact of diabetes released a report on Wednesday that found “obesity in Australia goes hand in hand with our diabetes epidemic”.
The report said type 2 diabetes was placing an increasing burden on health resources “across virtually the entire health spectrum of disease”, from doctors treating children, pregnant women and elderly patients, to brain, heart, arteries and eye specialists.
The parliamentary committee, chaired by Dr Mike Freelander, made 23 recommendations. Among them was a measure 108 other countries have adopted and which Australian health advocates think should be copied: a tax on sugar-sweetened beverages.
At the moment there is only a voluntary program in place to encourage food companies to gradually reduce sugar in their products, which has not stopped manufacturers from increasing soft drinks’ sugar content.
What is the tax?
A tax on sugar-sweetened beverages (SSBs) creates a disincentive to buying them by raising the price. It also encourages companies to make drinks with less or no sugar – so they can avoid the tax.
It targets water-based drinks with added sweeteners, such as high-fructose corn syrup or fruit juice concentrate. They can include soft drinks, sports drinks, fruit drinks, energy drinks and cordials – drinks with a high number of liquid calories which provide almost no nutritional benefit. They often exclude fruit juice and milk-based drinks.
The tax can vary in design. Mexico, for example, imposes a tax of one peso per litre on all sugary drinks – whereas in the UK there is one tax for sugar content above 5g per 100ml and a second, higher tax on drinks containing more than 8g of sugar per 100ml.
The peak body for Australian doctors, the Australian Medical Association, recommends the tax be set at $0.40 per 100 grams of sugar, which they say would bring it in line with the World Health Organization’s recommendation that a tax would need to raise the retail price of sugary drinks by at least 20% to have a meaningful health effect.
What does the report call for?
The committee recommended the government implement a levy on sugar-sweetened beverages, with a price modelled on international best practice. They recommended the levy “should be graduated according to the sugar content” – with tiered taxes like the UK’s model.
The report said “despite the decreasing consumption of sugar-sweetened beverages across Australia’s overall population, the Committee notes that some Australians who are particularly at-risk of and impacted by diabetes and overweight and obesity, including those living in lower-socioeconomic areas and Aboriginal and Torres Strait Islander people, still consume high amounts of sugar-sweetened beverages”.
The report noted the average 375ml can of soft drink in Australia contains between eight to 12 teaspoons of sugar (33-50 grams), which is more than the World Health Organization’s daily recommended amount. The committee said the levy would be comparable to similar taxes imposed on tobacco.
In an appendix to the report, the Parliamentary Budget Office estimated applying a 20% tax on all SSBs would increase the government’s cash balances by about $1.4bn over the 2023-24 budget forward estimates period.
Is it likely to happen?
The Coalition members of the committee agreed with all the report’s recommendations – except the one calling for a sugar tax. Their dissenting report said the new tax proposal came during a cost-of-living crisis.
“While not discounting the evidence base surrounding the link between SSBs and contribution to obesity and obesity-related conditions such as type 2 diabetes, we are not convinced that a tax on SSBs would be an effective or targeted measure or that it could be implemented without disproportionate impact on the community,” the dissenting report said.
It cited evidence that the tax would disproportionately affect low-income households.
How does the tax work overseas?
Evidence from overseas countries including the UK, Mexico and South Africa shows the policy is effective. For example, Mexico introduced its tax in 2014 – by 2016 there was a 37% reduction in the total volume of drinks bought compared with the year before the tax.
The levy which came into force in the UK in 2018 has led to a 21.6% reduction in the total sugar content of UK soft drinks, while studies have shown the policy is preventing 5,000 cases of obesity every year in year 6 girls. Children’s tooth extractions have fallen by 12%.
The World Health Organization recommends that a tax should be applied to all sugar sweetened beverages. WHO’s director for health promotion, Dr Rüdiger Krech, said “taxing unhealthy products creates healthier populations. It has a positive ripple effect across society – less disease and debilitation and revenue for governments to provide public services.”
What else did the report recommend?
The committee recommended a dedicated resource within the health department to support access to healthy food for all Australian communities and to address food insecurity, a known risk factor for type 2 diabetes.
The report said the government should consider regulating the marketing and advertising of unhealthy food to children, especially those aged 16 and under.
“Urgent reform is required in advertising, marketing and community awareness,” the report said. “Dietary guidelines need to change. Self-regulation by the food industry and the ‘fast food’ industry has not and will not work, and our children are suffering the consequences.”
The report recommended better urban planning and the development of physical activity initiatives to increase regular exercise in schools and neighbourhoods.
Disadvantaged and remote communities, including Aboriginal and Torres Strait Island communities, must have better access to diabetes medications, the report said.
The full list of recommendations can be found here.
