Adjournment – sugar tax leaves sour taste

Sugar tax leaves sour taste

Mr President, I rise to speak tonight about sugar and obesity.

I want to commend the Australian of the Year Dr James Muecke for his work in ophthalmology and prevention of blindness through reducing type 2 diabetes.

The work Dr Muecke has done and continues to do in paediatric ophthalmology is saving the sight of around 20,000 children a year in Africa and Asia. According to Dr Muecke around 80 percent of blindness is preventable and he believes that sight is a human right.

His skills and knowledge are being passed onto a new generation as he trains and mentors young surgeons in the field of ophthalmology.

His work is noble, selfless and he is the epitome of what we want to see in our community.

But I disagree with him on one point: that is a sugar tax will help reduce the incidence of type 2 diabetes and with it the incidence of preventable blindness.

It won’t.

There was an image that went viral on social media over the Christmas break. A grandmother took a packet of cigarettes valued at about $50 and put it next to $50 worth of groceries.

It was a stark reminder that cigarettes eat into family incomes. Don’t get me wrong, I think smoking is a terrible habit and we should be doing everything we can to prevent the uptake and quitting of it that we can.

But for those people genuinely addicted – and according to the Heart Foundation unemployed people have a higher rate of smoking than employed, and people in rural and remote areas are more likely to smoke – the cost of cigarettes have a real impact on their ability to feed their families, and indeed themselves.

The tax on cigarettes took a packet of 25 cigarettes from less than $1 in the 1970s, and taxed it, taxed it, taxed it to where it now costs an average of $40 a packet.

Other measures taken to reduce smoking were to ban advertising tobacco products, and  the sale of ‘poverty packs’ or packets of ten cigarettes to reduce uptake in young people. Changing packet warnings from a gentle ‘smoking harms your health’ in a small font on the back, to full blown images of rotting gums and legs and serious warnings that this habit will take your life.

Smoking has been banned in the workplace, pubs, clubs, and within 10metres of government buildings. To buy a packet of cigarettes you need to know what you want because they’re locked away in cupboards.

As a result smoking rates have plummeted from a peak of 72 percent of males in 1945 to just 14 percent of the total population now.

But it’s taken 47 years of Federal, State and Local government changes to laws and regulations to get the smoking rate this low.

And to be perfectly frank, the tax was just one way to address the health issue of smoking. If cost was the only factor, no one would be smoking at all.

This is why I don’t think a sugar tax will work.

On 10 November 2016, Cook County in Illinois introduced a one-cent-per-ounce soda tax, at the time it was the biggest soda tax in the US. It came into effect on 2 August 2017.

The tax was repealed after just two months on 10 October, and officially removed on 1 December. It is one of the shortest-lived taxes in Illinois’s history.

It failed because to buy a soft drink isn’t as simple as buying a cigarette. In the States, as part of their welfare system, people are issued food stamps, and soft drinks purchased with food stamps were exempt from the tax.

It applied to soft drinks and diet soft drinks but not fruit juice which has been found to contain as much sugar as a lemonade.

Then there was active tax avoidance – consumers would drive out of Cook County to purchase their soft drinks.

It had a number of legal challenges, most notably the Illinois Retail Merchants Association.

And while it was promoted as a way of protecting public health and encouraging better choices, many groups saw the tax as a way to plug a $1.8billion hole in the Cook County budget. It eventually only raised half the projected amount because of the boycotts.

Epic fail.

In the UK, Prime Minister Boris Johnson, apart from getting them out of the EU, has his sights set on a sugar tax introduced in April 2018. The tax is 18pence per litre on drinks with more than 5 grams of sugar per 100ml; and 24 pence per litre on drinks with more than 8 grams of sugar per 100ml.

The levy was applied to the manufacturer and they could either pass the cost on to consumers or absorb it.

Manufacturers responded by reducing their sugar content, and as a result there was a 7.7percent growth in the soft drink sector in 2018.

In a poll of 2000 Britons they found just under half said taxing unhealthy products would encourage them to cut back—while three-quarters of those polled said easier-to-understand nutritional information would alter their purchasing habits.

A study by the University of Glasgow with a sample of 132,000 adults found focusing on sugar in isolation misleads consumers, ignoring the impact of fat intake on obesity.

Research by the McKinsey Global Institute in 2014 found the UK sugar tax ranked 13th in effectiveness for reducing obesity out of 18 factors, with portion control, product reformulation and consumer education ranking higher in efficacy.

Further McKinsey found a sugar tax attracts media attention disproportionate to its effectiveness as a mechanism to lower obesity, which in turn detracts from methods that have proven to actually work.

Separate reviews by the Menzies Research Centre and the New Zealand Institute of Economic Research in 2017 both found that there is little evidence to show a tax on sugar-sweetened beverages actually works to reduce obesity levels and improve health outcomes.

Mexico introduced a tax on sugar-sweetened beverages (SSBs) in 2014, and while soft drink sales dipped slightly immediately after it was introduced, consumption rebounded.

Remember what I said about poorer households having the higher rates of smoking? Well it correlates with the Mexican experience where in 2014, 63.7 percent of the tax on sugary beverages was collected from the lowest socio-economic group.

And then there is the economics of substitution. If a person has a ‘sweet tooth’, as my grandmother used to say, they will merely swap one source of sugar for another. Again in Mexico, they found people would forego the sugary beverages, and instead have chocolate or icecream.

So what do we do to help Dr Muecke in his work to reduce type 2 diabetes and with it the rates of acquired blindness?

I admit when I look at the statistics of obesity it is very alarming. But it is also telling where the higher rates of obesity are..

The lowest rate of obesity in the country is inner Sydney, with a rate of 17-19 percent.

Where we are losing the battle of the bulge, however, is in rural and regional areas – Western Queensland has a rate of 32 percent, Country South Australia has a rate of 34 percent and Murrumbidgee has a rate of 35 percent.

Why?

Last year I sat with members opposite on a Select Committee which looked into the obesity epidemic in Australia. We looked at all the factors contributing to obesity because we don’t seem to be getting it under control.  The Committee received compelling evidence that taxes on sugar and unhealthy foods in other countries have been ineffective and had negative impacts—such as the SSB tax in Mexico.

We need to address the larger issue of nutrition and availability and affordability of fresh food over processed food in areas where we have the highest rates of obesity – and that is outside the capital cities.

And it wouldn’t hurt to address people’s food choices in the same way smoking was targeted – by promoting the health benefits of healthier food.

If we want to help Dr Muecke, lets get serious about the causes of obesity and address those, rather than a knee-jerk tax reaction on something which is really only part of the problem.

References

https://www.economist.com/democracy-in-america/2017/10/13/chicagos-soda-tax-is-repealed

https://www.washingtonpost.com/news/wonk/wp/2017/10/10/why-chicagos-soda-tax-fizzled-after-two-months-and-what-it-means-for-the-anti-soda-movement/

https://www.forbes.com/sites/brucejapsen/2017/09/01/billionaire-bloomberg-spends-millions-to-save-chicago-area-soda-tax/#705359b21238

https://www.bbc.com/news/health-43659124

https://www.smh.com.au/politics/federal/australian-soft-drink-industry-vows-to-slash-use-of-sugar-by-20-per-cent-20180625-p4znkm.html

https://www.foodmanufacture.co.uk/Article/2019/04/15/Soft-drinks-levy-does-industry-a-favour

https://blogs.spectator.co.uk/2020/01/the-sugar-tax-is-only-a-success-if-you-ignore-the-evidence/

https://www.insp.mx/epppo/blog/4063-tax-sugar-sweetened-beverages.html

https://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Obesity_epidemic_in_Australia/Obesity/Final_Report

https://www.heartfoundation.org.au/about-us/what-we-do/heart-disease-in-australia/smoking-statistics

https://www.tobaccoinaustralia.org.au/chapter-1-prevalence/1-3-prevalence-of-smoking-adults

https://www.abs.gov.au/ausstats/abs@.nsf/Lookup/by%20Subject/4364.0.55.001~2017-18~Main%20Features~Smoking~85

https://www.tobaccoinaustralia.org.au/chapter-13-taxation/13-3-the-price-of-tobacco-products-in-australia