Deakin University's Global Obesity
Centre says it has "debunked" concerns for an Australian soft
drinks tax likely being regressive or impacting unfairly on those
who earn the least.
Its new research Modelled health benefits of a
sugar-sweetened beverage tax across different socioeconomic groups
in Australia: A cost-effectiveness and equity analysis
shows that lower socioeconomic groups would in fact receive the
biggest health benefits from a tax on sugary drinks, and would
spend only a fraction more on these drinks per year than other
groups under this system.
Deakin says the study is the first of its kind to examine the
equity of a 20 per cent tax on sales of sugar sweetened beverages
in Australia, by assessing potential cost-effectiveness, health
gains and financial impacts, for different socioeconomic
Deakin carried out the study because: "It was unknown what the
healthcare cost savings, health gains, and financial impacts of an
SSB tax would be for different income groups, in Australia or
What did the researchers do and find?
- They modelled the effect of a 20% SSB tax in Australia on life
expectancy and health-adjusted life years before and after
implementation of the tax, across quintiles of area-level
- The model predicts that the greatest health gains would accrue
to the 2 lowest quintiles (most disadvantaged), leading to the
highest healthcare cost savings in these quintiles.
- They estimate the increase in annual expenditure on SSBs to be
AU$35 per capita in the lowest quintile, a difference of less than
$5 compared to the highest quintile.
- Annual tax revenue was estimated at over AU$640 million.
What do these findings mean?
- A 20% SSB tax in Australia is likely to decrease SSB purchase
and consumption, leading to significant health gains and healthcare
expenditure savings across all quintiles of socioeconomic
- The tax would generate considerable yearly revenue, which the
government could use to further improve the health of the most
- As with all simulation models, the model results represent the
best estimate of a potential effect in the absence of stronger
"For a long time a major concern of the public health lobby's
proposed sugar-sweetened beverage tax has been that it would
unfairly punish disadvantaged groups," says study lead author,
Anita Lal, a PhD candidate at Deakin Health
Economics in Deakin's School of Health and Social Development.
The modelling predicts that those in Australia's lowest
socioeconomic groups would have the most health gains from the tax,
and the extra cost to them due to the increased price of sugary
drinks would be just $5 more than the highest socioeconomic group
The study also showed a sugar-sweetened beverage tax could save
$1.73 billion in healthcare costs over the lifetime of the
"A proposed sugar tax has already ignited much public debate,
but it is important policymakers look at an evidence-based approach
to address what is becoming an alarming issue in our society," says
Access the full study
Deakin Media Release