The study claims to be the first of its kind to examine the equity of a 20% tax on sales of sugar-sweetened beverages in Australia, by assessing potential cost-effectiveness, health gains and financial impacts for different socioeconomic groups.
Its modelling predicts that those in Australia’s lowest group would receive the greatest health benefits from the tax, and the extra cost to them due to the increased price of soft drinks would be just A$5 (US$3.78) more than the highest socioeconomic group per year.
Lead author Anita Lal said the study showed a sugar-sweetened beverage tax could save A$1.73bn (US$1.31bn) in healthcare costs over the lifetime of the population.
“We estimated the increase in annual spending on sugar-sweetened beverages would be an average of A$30 per person, or just 60 cents per week—a reasonable cost when the health benefits are taken into account,” Lal said.
“While those in disadvantaged areas will be paying slightly more tax, the difference is very small, only about $5 per year.”
The study, published in PLOS Medicine, looked at predicted changes in consumption levels due to a change in price, then converted that to a change in population body mass index. This was used to predict the reduction in the prevalence of certain diseases related to obesity.
Lal said health benefits were likely to be better felt by lower socioeconomic groups as they were typically more price sensitive, and more likely to stop buying soft drinks when prices increased. They are also higher consumers of sugary drinks, leading to greater scope for reduction.
“A 20% tax on sugar sweetened beverages is likely to decrease purchase and consumption, leading to significant health gains and healthcare cost-savings across all socioeconomic groups,” she said.
“However, as a percentage of household expenditure, we found that the lower socioeconomic groups will save the most in out-of-pocket healthcare costs.
“Of course this tax isn’t going to solve obesity on its own, but it can be an important part of the solution. It’s about making the healthy choice, the easier and more affordable choice,” she added.
Annual tax revenue from the proposal was estimated at A$642.9m (US$485) in the report.
According to Anna Peeters, who supervised the study, the equity of the tax could be even further improved if this government revenue was used to fund initiatives benefiting those with greater disadvantage.
“In Australia right now almost two in three adults are overweight or obese, and a quarter of all children. We know that sugar sweetened beverages are playing a big role in that, and something has to be done,” Prof. Peeters said.