Why the government should tax unhealthy food and subsidize healthy foods

In an Australian report published today, we show that the government could improve health for Australians by combining taxes and subsidies. This would also free up billions of dollars in health care costs.

Not less than 13 countries announced new taxes in the last five years on sugary drinks and unhealthy foods to combat the growing problem of obesity and chronic diseases.

We could help by providing some facts.

In Australia, we spend A$4 Billion every year to treat obesity. has invested in programs that encourage people to eat healthier and get fitter. Examples include ” Get moving ” and ” ” Go for 2 and 5. The rising obesity rate suggests that this isn’t enough. In particular, in light of powerful food industry marketing as well as an environment that makes unhealthy foods widely available and inexpensive.

can be influenced by adjusting the price of food and drink to make healthier options more affordable compared to less healthy products.

Does it work?

There are precedents. There are precedents. In Australia, we raised the price of cigarettes, and smoking went down. We also raised the price for alcoholic beverages and drinking has gone down.

Mexico’s sale of unhealthy food has fallen after an 8% tax was introduced on these foods. Sales of non-taxed products have not changed.

We want to shift the pricing structure towards healthier choices by taxing unhealthy foods (saturated fatty acids, excessive salt, sugars). This can also be an incentive for processed food producers to improve the nutritional content of their products.

High-saturated fat, salt, and sugar foods can cause high blood pressure, obesity, and other diseases, such as cancer, heart disease, and type 2 diabetes.

What would Australia gain?

In our study, we modeled the effects of adding taxes to foods based on their saturated fat, sugar, and salt content, a sugar-sweetened beverage tax, and a subsidy for fruits and vegetables. These policies were intended to have a less than 1% effect on the average household’s food and beverage expenditure.

With the combination of tax and subsidy, we found that over the life of the 22 million Australians (that was the number of people at the time of the simulation in 2010), there would be an additional 470,000 disability-adjusted life years (DALYs) (meaning an extra year in perfect health).

The greatest impact on our health would be if we tax sugary foods and drinks. From www.shutterstock.com

This is an increase of 2.1 healthy years for every 100 Australians who were alive in 2010. Few public health interventions have been able to deliver such gains in health on average for the entire population.

The tax on sugar was the most beneficial (270,000 DALYs), followed by the tax on salt (130,000 DALYs), the tax on saturated fat (97,000 DALYs), and the tax on sugar-sweetened beverages (12,000 DALYs). When added to the tax combination, the subsidy for fruits and vegetables produced additional health benefits (6,000 DALYs), but it did not have a clear advantage if implemented alone.

In our simulations, we found that the combination of tax and subsidy would prevent A$3.4 billion worth of healthcare expenditures over the lifetimes of the population. The benefits would be greater if food companies responded by reformulating their products with healthier levels of sugars, salts, and fats.

Simulation studies such as ours do contain uncertainty. We rely on other research to estimate the response of the public in terms of food price changes. Simulation modeling is the only method to understand what will happen to the population on a medium- to long-term basis with the policies we choose today.

This study is part of a growing body of evidence that shows the health benefits of taxes and regulations in influencing the consumption of healthy food.

What’s next?

Many Australians are looking to lose weight, improve their diet, and increase their physical activity. We want our children to grow up to be healthy adults.

We need policies to help people maintain their new behaviors. In recent decades, Australians have become more responsible when it comes to smoking, drinking while driving, safe sex, and sun exposure. This is because their environment has changed in a way that makes healthier choices easier.

Australia is a country that knows how to help people take personal responsibility. We can also do this for the most pressing health issue we face today – unhealthy eating habits. We must put policies in place that address the environmental factors that are fueling the obesity epidemic.