Addicted to Sugar Tax
Like infants who can't stop eating cake, the ABC keeps returning to the sweet hit of an anti-business sugar tax. By Fred Pawle.
The illogical case for a sugar tax is set to be given a run on prime-time TV on Monday, when Four Corners “investigates the power of Big Sugar and its influence on public policy”.
The link between sugar and Australia’s increasing obesity seems irrefutable at first. People are increasingly fat. Soft drinks are heavily sweetened and have no other nutritional value. Therefore, soft drinks must be taxed to reduce demand.
The Four Corners press release on Thursday followed this line of thought and threw in the ABC’s customary anti-business tropes: “Despite doctors’ calls for urgent action, there’s been fierce resistance by the industry to measures aimed at changing what we eat and drink, like the proposed introduction of a sugar tax,” the release said.
There are three fundamental flaws to this way of thinking. Firstly, Australians are consuming less sugar, and within that declining consumption, soft drinks represent a decreasing proportion. If Four Corners, like ABC economics correspondent Emma Alberici did recently, proposes a tax on soft drinks, it is targeting the wrong bogey.
Secondly, if people who seek a sugar hit can’t afford soft drink because a tax has made it too expensive, they can easily switch to an equally sugary bar of chocolate.
And thirdly, there is no evidence anywhere in the world that a tax on soft drinks has improved the general health of the population. Last year the MRC commissioned the economists at Cadence to investigate the veracity of the research behind five papers from Australia and one from Mexico, all published in the past two years. Cadence was underwhelmed by the reports, to say the least.
Cadence also found that where the tax had been implemented overseas, there was little or no effect on consumption or public health.
Another wider study of 47 academic studies by the NZ Institute of Economic Research reached the same conclusion. NZIER found that there was no proven link between a tax on soft drinks and improvements in public health. The reports reviewed covered every aspect of sugar taxes: systematic reviews, price elasticity, cost effectiveness, observational effects, hypothetical effects and one case study. “We have yet to see any clear evidence that imposing a sugar tax would meet a comprehensive cost-benefit test,” the NZIER said.
Another fundamental aspect of this debate is that of personal responsibility. Again, Four Corners seems to be placing itself on the side of conspiratorialists. The release quotes a surgeon saying: "This isn't about, as the food industry put it, people making their own choices and therefore determining what their weight will be. It is not as simple as that, and the science is very clear."
The science is clear? Where have we heard that before? Keep an eye on our website on Tuesday for a fact-checking response to the Four Corners investigation.