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Think Tank Calls For Australian Sugar Tax

by Mary Swire,, Hong Kong

05 December 2016

An Australian excise tax on sugary drinks could raise around AUD500m (USD372.2m) a year, according to a new report from the Grattan Institute, a think tank.

In its "A sugary drinks tax: recovering the community costs of obesity" report, the Institute said an excise tax of 40 cents per 100 grams of sugar would increase the price of a two-liter bottle of soft drink by around 80 cents. It calculated that the tax would raise about AUD500m a year and reduce consumption of sugar-sweetened drinks by 15 percent. It said the tax should apply to non-alcoholic, water-based drinks with added sugar.

The Institute explained that one in four adults is obese, up from one in ten in the early 1980s. Approximately seven percent of children are obese. The Institute said that obesity costs Australian taxpayers more than AUD5.3bn a year, and estimated that "about 10 percent of Australia's obesity problem is due to these drinks."

"We recognize that a tax on sugary drinks is not a 'silver bullet' solution to the obesity epidemic – that requires numerous interventions at an individual and population-wide level. But it will address these third-party costs of obesity by reducing sugar intake from sugar-sweetened beverages," the report stated.

According to the Institute, the Government could use the money raised to reduce the budget deficit, boost healthcare funding, or provide programs designed to treat obesity and promote healthy eating.

Grattan Institute Health Program Director Stephen Duckett said: "We target these drinks because most of them contain no nutritional benefit. How we use the money is a debate for later. For now, Australia should introduce this tax because it offers twin benefits: it will reduce the number of people who become obese and it will ensure fewer taxpayer dollars have to be spent on the damage done by obesity."

TAGS: tax | public health | budget | Australia | excise duty | Health tax | food | tax rates | tax reform

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