Calls for a tax on sugar or sugar soft drinks are coming thick and fast these days, but they are still being met with a resounding “no way” from most politicians.
This week, the Medical Journal of Australia published research from Sydney University Professor Stephen Colagiuri demonstrating that Australia’s consumption of free sugar in 2011-12 was well above the recommended daily intake of approximately six teaspoons, up as high as 21 teaspoons. Colagiuri joined the ranks of medical professionals and other health organisations in calling for the government to consider a tax on sugar products in order to cut Australia’s growing obesity rate — over 25% of Australian children are now overweight or obese, and more than two-thirds of all adults are considered obese.
It seems like almost every week there is a new report or research or call for a sugar tax. In November last year, the Grattan Institute found that a 40 cents-per 100 grams of sugar tax would generate revenue of $500 million per year and reduce sugary soft drink consumption by 15% and lead to a 2% reduction in obesity. The Council of Presidents of Medical Colleges has also developed a six-point plan to curb Australia’s growing obesity rate, including taxing sugary drinks.
But the response from politicians seems to be unwavering. While the Greens went to the last election promising a 20% tax on sugar drinks, when the research was released this week, Senator Pauline Hanson said she would not support one, and Senator Derryn Hinch said it would be unworkable, Opposition Leader Bill Shorten said Labor had no plans for a tax, and the government said it did not support a sugar tax. Deputy Prime Minister Barnaby Joyce just suggested that people should eat less and exercise more.
Why the lack of appetite for a sugar tax? In large part, it is electoral arithmetic. The Liberal and National parties, as well as Labor, have a keen eye on the nine seats in New South Wales and Queensland that are produce and refine large quantities of sugar. Many of these seats are marginal, with some, like Herbert, going to Labor at the last election. Any push from Labor for a sugar tax would more likely be after the party was in government rather than in the lead- up to an election where the Coalition could run a scare campaign.
While the Nationals are dead opposed, there is some love for the idea of a sugar tax within the Liberals, where it could be a source for revenue that the government sorely needs for budget repair. But the support is not substantial enough to move the matter, and Joyce’s public comments against it effectively brought the debate to an end. And that’s not even mentioning what LNP MP George Christensen might do, given his strong advocacy for the sugar industry.
One Nation, as a Queensland-based party with a focus on farmers, would always be opposed, as would Bob Katter. That means that outside of the Greens, and pockets of Labor and the Liberals, there still is little love for the tax.
And two major lobby groups, Beverages Council of Australia and the Australian Food and Grocery Council of Australia, want to keep it that way. Getting them to discuss how they fight any moves towards a sugar tax is more complicated. We didn’t hear back from the Beverages Council of Australia. The Food and Grocery Council of Australia pointed to several submissions it had made in the past to tax reviews regarding sugar tax, and said it remained opposed to a sugar tax.
The most recent statement from the group describes the research on the sugar tax as work by “a group of academics and activists” determined to “put a bureaucrat in every kitchen”. The Food and Grocery Council labels the push for a tax as a “tired agenda” of “nanny-state bans” that has not shown evidence of improvement of obesity rates in other countries where it has been implemented.
While AFGC might play its cards close to its chest, the council has realised that pressure is on. In the AFGC annual report last year, CEO Gary Dawson said that it was committed to political and policy debates in an environment where minor parties might encourage populist outcomes:
“The days of solely relying on the advocacy of an industry association or single company to secure policy reform have long gone. A tight political contest, fractious parliament, increased minor party representation coupled with fiscal insecurity have given rise to populist responses to complex problems. An increasing demand for ‘government to fix it’, without first defining ‘the problem’ or how best to improve outcomes risks disjointed policy making, disproportionate regulatory responses and perverse outcomes.”
It isn’t just the industry representative groups; the companies also employ lobbyists to directly deal with the politicians. For example, Coca-Cola South Pacific employs Endeavour Consulting Group to lobby on its behalf to the government, while chocolate maker Mars Foods employs Parker and Partners.
While politicians are still cold to the idea, Obesity Policy Coalition executive manager Jane Martin said that the public support for the tax had changed in just five years. She said when OPC — a joint venture of Diabetes Victoria, Cancer Council Victoria, and the World Health Organization Collaborating Centre for Obesity Prevention at Deakin University — first started speaking in the debate five years ago, the reaction was very different.
“I just stopped reading the emails that came into our website,” she told Crikey. “It was pretty inflammatory and offensive. That certainly changed.”
To counter some of the concern of the impact of any tax on sugar farmers, Martin suggests that some of the millions the Grattan Institute estimates could be raised as a result of the tax could be diverted to support the sugar industry to transition to provide alternatives, or improve exports of sugar — which is the vast majority of sugar sold by the industry.
“Even with a declining consumption it would still raise a lot of money every year. Some of that money could be used to provide agricultural support for the sugar industry to enable them to operate more efficiently, or to shift to fuel production,” she said.
The next big shift in the debate, according to Martin, will be the United Kingdom’s implementation of a sugar tax. In 2018, the UK will put a levy on sugary drinks, which is expected to raise 520 million pounds in revenue.
“I think the game-changer was the UK picking up this policy because when it is done in countries like Chile or Vanuatu, or these other countries people think it is not like Australia, but when the UK has adopted it, I think that is a really important step.”