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A sugar tax “will benefit our most disadvantaged groups”, study finds

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 groups.

 

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 internationally."

 

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 socioeconomic deprivation.
  • 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 deprivation.
  • The tax would generate considerable yearly revenue, which the government could use to further improve the health of the most disadvantaged.
  • As with all simulation models, the model results represent the best estimate of a potential effect in the absence of stronger direct evidence.

 

"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 per year.

 

The study also showed a sugar-sweetened beverage tax could save $1.73 billion in healthcare costs over the lifetime of the population.

 

"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 Ms Lal.

Access the full study

Deakin Media Release

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