Medical Bodies Call for ‘Sugar Tax’ to Curb Obesity and Chronic Disease

The AMA and ADA have renewed calls to introduce a sugar tax to help curb Australia's obesity crisis and growing rate of chronic disease. iStock

An additional “sugar tax” on sweetened beverages may be on the cards after the Australian Medical Association (AMA) and the Australian Dental Association (ADA) renewed calls to address the high rates of obesity and chronic disease among Australians.

In an Aug. 10 statement, both the AMA and ADA said the tax would send a “strong signal” that sugary drinks are “unhealthy.”

“Sugary drinks are making Australians sick, with a worrying number of children and adults alike suffering from chronic diseases,” AMA President Professor Steve Robson said.

Dr. Stephen Liew, federal president of the ADA, said that tooth decay from drinking sweetened beverages had cost the economy over $4 billion (US$2.6 billion) in 2019 and that a range of oral health issues had resulted from its consumption.

“Sugary drinks are a leading contributor to tooth decay through its acidity and source of nutrition to bacteria in the mouth. This acidity can lead to irreversible loss of tooth structure contributing to pain, loss of function, aesthetic changes, and bad breath,” Dr. Liew said.

The amount of sugar contained in drinks is on display at a shelf in a supermarket in London, Thursday, Aug. 18, 2016. AP Photo/Frank Augstein

Moreover, the proposed tax, called the Sugar Sweetened Beverage Tax (SSBT), would reduce sugar consumption from soft drinks by 12 to 18 percent while also raising $749 to $814 million in tax revenue each year, the AMA said.

The additional tax could then be reinvested in health programs, both medical bodies said.

Further, support for the tax was echoed by the Grattan Institute, which said that a sugar tax would recoup some of the costs of obesity for the community, adding that obesity costs Australian taxpayers more than $5.3 billion a year.

“The best option is an excise tax of 40 cents per 100 grams of sugar, on all non-alcoholic, water-based drinks that contain added sugar,” according to the institute.

“Such a tax would increase the price of a two-litre bottle of soft drink by about 80 cents, raise about $500 million a year, and generate a fall of about 15 percent in the consumption of sugar-sweetened beverages, as consumers switched to water and other drinks not subject to the new tax.”

The Grattan Institute admitted the proposed tax is not a “silver bullet” solution to Australia’s obesity epidemic, which would require new policies and programs.

“But the proposed tax would encourage healthier lifestyles,” it said.

According to the Australian Institute of Health and Welfare (AIHW), two in three adults are overweight or obese. This health issue is also experienced by one in three children aged two to 17, three in four adult men, and three in five women.

Strain on Families, No Solution: Council

However, the Australian Beverages Council said that adding a sugar tax on sugary drinks will add a strain to family finances without providing a concrete solution to a “decades-old problem.”

The Council said that its latest Sugar Reduction Pledge report showed that Australians have continued the two-decade trend away from sugar-sweetened drink consumption without needing “regressive taxes.”

“The reality is that obesity is a multifaceted problem and simply adding cost to a beverage won’t solve the problem and will only serve to add to the weekly shopping bill. This is why a number of jurisdictions around the world have removed these taxes,” said Australian Beverages Council CEO Geoff Parker.

“Obesity is complex and while simplistic solutions like a tax might appear attractive in a university lab model, real-world experience shows these types of discriminatory taxes deliver no discernible public health benefit but only hit the poorest households the hardest.”

Mr. Parker said the non-alcoholic beverage industry has for some years been making tangible changes to help support healthy consumer choices, including reducing sugar consumption.

World Health Organization’s Push for Sugar Tax Globally

Despite the Council’s argument against the tax, the global push for a sugar tax has been prodded by the World Health Organisation (WHO), which in December 2022 released its first-ever global tax manual for sugar-sweetened beverages (SSB).

In its manual, the WHO highlighted countries that had “successfully” implemented the sugar tax, including Mexico, South Africa, and the United Kingdom.

There are 8-12 teaspoons (33-50 grams) of sugar in the average 375 ml can of soft drink, according to the AMA. Luis Ascui/Getty Images

“Taxes on sugar-sweetened beverages can be a powerful tool to promote health because they save lives and prevent disease, while advancing health equity and mobilizing revenue for countries that could be used to realize universal health coverage,” said Dr. Ruediger Krech, Director of Health Promotion at WHO.

“Regular consumption of SSBs, including soft drinks, flavoured milk, energy drinks, vitamin waters, fruit juices, and sweetened iced teas, is associated with an increased risk of dental cavities, type 2 diabetes, weight gain and obesity in both children and adults, heart disease, stroke, and cancer.”

According to the WHO, implementing taxes on sugar sweetened beverages increases product prices and reduces demand, resulting in fewer purchases.

The Australian Taxpayer’s Alliance (ATA) has previously criticised the proposed tax, saying that it is “nothing more” than a revenue-raising exercise “being pushed by bitter bureaucratic busybodies who should let Australians enjoy things for once.”

“The AMA estimates that the proposed tax would generate close to $1 billion per year, and we are concerned that this tax would disproportionately hit low-income earners,” said Brian Marlow, president of the ATA.