Good news that Kevin and Nicola are thinking about raising tobacco taxes again. Baccy tax is a politician’s dream tax. It drags in wads of money and everyone (well according to a recent Newspoll, 88 percent of everyone) thinks you’re a legend for doing it. If only they could convince us to feel that way about income tax. Then they could hand out stimulus packages every second Tuesday and even afford to buy their own utes.
The latest proposal from the think tank over at the National Preventative Health Taskforce should rake in $1.97 billion in extra taxes every year. That’s a lot of mullah just by whacking an extra 67c on a pack of ciggies. They’d better hope not too many people give up.
The extra two billion will be added to the six billion or so they already take from the tobacco industry every year. Eight billion will be quite a nice little earner when you consider that the direct health costs of treating smokers is just $318 million a year (mostly because smokers have the good grace to die before they cost real money).
But don’t start picking out next year’s plasma TV just yet, if another paper from the National Health and Hospitals Reform Commission (all these government Taskforces and Commissions are starting to blur together into one steaming, committee-coloured pile) is to be believed, we’re going to need every last cent of that (and a whole lot more).
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
The research underlying the report says that by 2033 the Australian health system will cost up to $295 billion every year (up from the $94 billion today). To put that in perspective, last year the total income tax take for the entire country was $209 billion, which was topped up with $76 billion in GST. The biggest cost increases are directly related to chronic diseases caused by sugar consumption such as Type II Diabetes. There will be almost four times as many of us with the disease by then.
Depending on how things track between now and then, the health system may cost up to 15% of our GDP. Our friends in the US already have a health system which costs 15% of GDP and they’re finding it a bit tricky to keep delivering the essentials. “When it comes to health-care spending,” says Kevin’s mate Barack, “we are on an unsustainable course that threatens the financial stability of families, businesses and government itself.” Oh okay, so no big deal then?
But as they say, necessity is the mother of taking science seriously. So our friends over the pond are seriously considering slapping a sin tax on soft drinks (or soda, as they insist on calling it), fruit drinks, energy drinks, sports drinks and ready-to-drink teas.
They reckon if they add 10c per litre to the price, everyone will win. The government will pocket an extra $6 billion a year to go towards the health system, and the tax would “lower consumption, reduce health problems and save medical costs.” Gosh that sounds familiar. Except this time they’re not talking about ciggies, they’re talking about a substance that Nestle advertises to Australian kids as a healthy and nutritious snack.
Michael Jacobson, executive director of the Center for Science in the Public Interest, says soda is “clearly one of the most harmful products in the food supply, and it’s something government should discourage the consumption of.” I don’t think Mike’s worried about the water, so that leaves the other ingredient in soft drink, sugar. That’s right, sugar. And it would appear that he has good reason to be worried.
The evidence on sugar is enough to have the US Senate seriously considering the imposition of tobacco-like sin taxes. Clearly Americans have a very different metabolism, because in Australia, we’re not in the least concerned. Just last week (in response to one of my earlier rants) Susan Anderson, National Director, Healthy Weight at the Australian Heart Foundation told Cardiology Update: “Although associated with tooth decay … eating sugar itself is not clearly associated with other health problems.”
Susan isn’t on her John Malone. The House of Representatives Inquiry into Obesity (which handed down its report in June) was more worried about ensuring the taxpayer (that means you and me) footed the bill for gastric banding surgery than doing anything about sugar consumption. And the Preventative Health Taskforce wants to increase cigarette taxes and educate us to eat less fat and exercise more (because that’s worked so well to date).
A sin tax on sugar may not be the ideal approach. But at least it acknowledges the real cause of the obesity crisis and — much like a tobacco tax — ensures some of the real costs associated with its consumption are built into the price paid by the consumer. It’s time for Australian “experts” to extract their heads from the sand and start acting on sugar. At the very least, let’s stop pushing it to our kids as “health food”.
Residents of Melbourne might like to know I’ll be giving a free public lecture next Tuesday. People who can’t (or wont) go to Melbourne (even to hear me) can tune into Ockham’s Razor this Sunday instead.