Posted December 12, 2018 07:29:19

Photo: Sweet drinks can taste great but how much do you know about what they're doing to your health? (iStockPhoto/bhofack2)

A new tax on alcohol which could see the cost of cask wine rise by more than 100 per cent would be the most cost-effective way for the Australian Government to address the nation's growing obesity crisis, a team of health economists at Deakin University in Melbourne has concluded.

The team, which assessed 16 different policies that governments at a local, state and federal level have adopted or could adopt, found that while all of the measures they reviewed worked to some extent, a new tax on booze was the best.

The study's lead author, Senior Research Fellow Jaithri Ananthapavan, says Australia's obesity epidemic now costs the economy $12 billion each year in medical costs and lost productivity, and it's time governments considered unpopular measures.

"Obesity is a big problem in Australia," Ms Ananthapavan told AM.

"We now have 63 per cent of adults and over 27 per cent of children who are overweight or obese, and this trend is not going down."

"We really need a comprehensive response to try to decrease the cost to society."

The proposal for a new tax on booze would see the cost of a standard alcoholic drink rise by about 84 cents, with the mooted new levy to affect different alcoholic beverages at different rates.

Worst affected would be cask or boxed wine — prices for which would soar by 120 per cent — while beer, spirits and pre-mixed alcoholic drinks would be affected less dramatically, with price hikes ranging from 28 per cent to 3 per cent.

Ms Ananthapavan acknowledged raising taxes on alcohol was unlikely to go down well with the broader public.

But she told AM the change would make a big difference to Australians' quality of life in the long term, and represented good value for money for taxpayers too.

"Yes, for the alcohol tax there might be some public backlash, but obesity has been increasing in Australia, and this is a very big issue."

But international obesity expert Professor John Dixon of Melbourne's Baker Heart and Diabetes Research Institute was not persuaded on the idea.

Whilst he agreed it might curb the incidence of problem drinking, Professor Dixon said he was less convinced of its effectiveness in driving down rising obesity rates at the same time.

On balance, he didn't think the alcohol tax would make much difference.

"Taxing alcohol is not going to do a lot for preventing childhood obesity, which is the area we really need to prevent obesity," he told AM.

"In adults, it's excessive alcohol consumption that's a problem, but alcohol per se in healthy quantities is not really associated with obesity at all."

"Plus alcohol is already heavily taxed in Australia, so I don't know that the alcohol part is necessarily cost-effective as a prevention of obesity."

Sugar tax a close second

Levying a new tax on booze was only one of a range of responses the Deakin team assessed as offering governments good value for money.

There are 28 countries in the world that tax sugar-sweetened drinks and the AMA wants Australia to join the list.

They also recommended a new tax on sugary drinks, more restrictions on certain types of junk food advertising, a new cap on package sizes for sugary drinks, and new supermarket labelling for healthier products.

Ms Ananthapavan said some of the other 16 items on her team's list included things already being done by governments or business, like promoting physical activity in schools and kilojoule labels on fast-food.

She said while the alcohol tax idea rated marginally higher than other things on the list, introducing a sugar tax was nearly as cost-effective, coming in second on her team's final list.

"Places like the UK have recently introduced a sugar sweetened beverage tax, and what's really interesting there is we find that industry is actually reformulating to try to avoid the tax."

"There is also evidence from places like Mexico, who've implemented a tax for a while now, that shows there is decreased consumption of sugar sweetened beverages as a result there."

"So, it's having a very good impact in terms of decreasing consumption of products that are harmful."

Obesity in Australia is due to a number of factors, not least among them the pervasive influence the food industry has wielded over researchers, policy makers and consumers.

The proposal for a sugar tax is widely popular with obesity experts in Australia and elsewhere, although the response from the Australian Government to the idea has generally been muted.

In January when the sugar tax proposal was last made, the Health Minister Greg Hunt said obesity required "a community-wide approach", and that "fresh fruit and vegetables are already effectively discounted as they do not have a GST applied".

But Professor Dixon hopes the Deakin team's report kick-starts the sugar tax debate again.

"It is important not to have sugar sweetened beverages, the soft drinks in children, and I think we should be increasing the taxes on those."

"I think we need also to reduce food advertising on television during children's TV viewing times."

"What we need is to have an obesity policy here in Australia, and we're going to need multiple things," he told AM.

Topics: obesity, health-policy, government-and-politics, tax, education, advertising-and-marketing, food-and-beverage, australia