Chew the fat on a sugar tax to trim waistlines

Jessica Irvine
July 20, 2012
The Age

You are what you eat, they say. If so, Australians are shaped rather like a takeaway container filled with booze and meat, with nary a vegetable in sight.

Two reports released this week highlight the dire state of the nation’s nutrition. The Australian Institute of Health and Welfare’s report, Australia’s Food and Nutrition 2012, found 91 per cent of adults do not eat enough vegetables and only half eat enough fruit. One in five drinks alcohol at risky levels.

Households spent an average of $237 a week on food and beverages in 2009-10. By far the biggest component of spending was on food prepared outside the home, at restaurants and takeaways, where the average outlay was $63 a week. In second place was spending on alcoholic drinks, $32 a week, followed by meat, fish and seafood, $30 a week.

Australians spent just a few dollars more a week on fruit, nuts and vegetables than they did on condiments, confectionery, food additives and prepared meals.

So how’s that working out for us? Not so well, it seems.

In another section of its report, sensitively titled ”We’re getting fatter”, the institute finds 36 per cent of adults are overweight and a further 25 per cent obese. And we’re starting young. Of children two to 16 years old, 17 per cent are overweight and a further 6 per cent obese. That’s nearly one in four children with a weight problem.

Our increasingly sedentary lives are part of the problem, but this is swamped by the increased consumption of calorie-dense but nutrient-poor foods.
Why do we eat so much crap?

A green paper released this week by the federal government on its National Food Plan hints at one reason. Obviously we eat lollies, burgers and chips because they taste great. But we also eat them because they are readily available and, wait for it, cheap.

”Analysis of Australian food expenditure data suggests a substantial proportion of the Australian population is severely restricted in its capacity to make healthy food choices and achieve a healthy lifestyle. Compounding the situation is evidence that the cost of healthy (low energy-density, high nutrient-density) foods are increasing disproportionately when compared with the cost of higher energy-density, relatively nutrient-poor foods.”

The problem is exacerbated in regional and rural areas, where not only is the availability of fresh fruit and vegetables restricted, but transport costs and fewer supermarkets mean prices are often higher. Fast food chains tend to have uniform national pricing, making it relatively cheaper for people in regional areas to eat at their restaurants.

Given the cost imposed on the public purse of treating obesity-related conditions such as heart disease and diabetes, not to mention the cost to individuals of poor health, self-image and shorter lives, it’s time to get serious about our bellies.

One obvious solution from economics would be to increase the cost of fatty, sugary or excessively calorie-dense foods. In Britain, the opposition Labour Party is considering a policy of taxing sugary drinks. Last year, Denmark became the first country to impose a ”fat tax” of about $3 per kilo of saturated fat, levied on producers and sellers and passed on to some degree to customers through higher prices.

Could the hip-pocket nerve be the solution to our expanding waistlines?

Other products harmful to our health, such as cigarettes and alcohol, already attract so-called ”sin” taxes. And gluttony, it seems, is the developed world’s new sin of choice.

Sin taxes work by raising prices and discouraging consumption. Additionally, it can be argued the relatively low cost of junk food doesn’t incorporate the cost to the community of poor health and treatment – ”a negative externality” in the lingo. Obviously, such a tax would be regressive – disproportionately affecting those on lower incomes – as, of course, do taxes on alcohol and cigarettes.

Governments could use the revenue from a fat tax to compensate the low income earners, who would still find fatty foods relatively more expensive. Sound familiar? It’s the same logic as the carbon tax. Even if you compensate people for the full effect of higher prices, by raising the relative price of a good, consumers will want to consume relatively less of it. That people respond to prices and incentives is one of the most basic concepts of economics.

However, applying a fat tax in practice is problematic. Should it be applied per gram of sugar? The body needs some sugar to function and, of course, sugar occurs naturally in fruit. And what about fat? Some fats are essential for a healthy diet, though saturated fats are generally to be avoided. And what would be the size of the tax necessary to stop you buying that Mars bar if you were really, really craving it?

All taxes impose some cost on society in terms of administration. Can we prove that the benefits through improved health would outweigh those costs?

The jury is out on fat taxes. But it’s a discussion we need to have. Having battled the bulge myself, with some success, I’m convinced a big part of the solution to the nation’s obesity crisis lies with education. Only by arming ourselves with knowledge of our body’s energy needs and the energy content of what we put in our gobs, can we begin to bring the two closer into line.

And we need to start young. School programs designed to educate children about the calorie content of foods and their bodies’ daily calorie needs should be part of every curriculum. Physical education classes should have a greater focus on exercise that can be incorporated into adult daily lives. Competitive group sports are great for athletically gifted or co-ordinated kids, but they sure sucked for the rest of us.

Why not give children a heart rate monitor and let them hop, skip or jog around the oval until they’ve burnt 250 calories? That’s one Mars bar, kids!
It’s not healthy for children to obsess about calories, but nor is it healthy to be uninformed about the consequences of different food and lifestyle choices. Clearly, just being told to eat your greens is not enough.

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