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When people discuss a "Sugar Tax" they should really think about it less as a way of forcing people to eat less of a thing they don't like, and more as a way of enabling government to raise revenue by taxation of basic needs.
Since the dawn of civilisation from Roman Empire and the Mongol Yuan Dynasty, through to the French Gabelle and British colonialism in India, taxing salt has been a tool of authoritarian control of retail commerce, but don't worry I'm sure a sugar tax will be just fine.
A few more thoughts on a "sugar tax". This will be a (likely moderately long) thread.
A “sugar tax” isn’t a situation like alcohol or tobacco (or soon, gambling). Those are single purpose products that are easily taxed and regulated. They became publicly acceptable vices precisely because they are easily taxed and regulated. Sugars are less straightforward.
Legislation has very limited levers to pull to influence consumer behaviour. Regulation of labelling and advertising is one. Financial regulation (taxation and subsidy) is another, which is considerably more ham fisted.
To illustrate how ham-fisted it is, consider that processed foods are high in sugar in no small part as a result of financial regulation in the first place, caused - perversely - by the US electoral college.
Yes, I know that sounds weird.
But this is why. You’ve heard of the Iowa Caucuses? Iowa is a US state that is (disproportionately to population and economy) hugely influential in US presidential elections. It is considered the first major contest of candidates and vital for electoral success.
Iowa is a largely rural and agricultural state which is the country’s largest producer of corn.
For political advantage (among other reasons) both major parties in the US have for decades supported the continuation of farm subsidies for 5 primary crops - soybeans, wheat, cotton, rice and... corn.
The US spends about $25 billion a year on these subsidies. This means that states like Iowa are incentivised to produce a lot of corn, at a resulting price that is incredibly cheap.
In the 1970s, Iowa was producing so much cheap corn they had to find things to do with it. They developed industrial alcohols for use as fuel (which is why you now put E10 in your car) and of course, High Fructose Corn Syrup.
With an extremely cheap sweetener as a resource for formulation, processed foods were able to dramatically increase their sugar content for taste (without detriment, as everyone at that time was focussed on fat).
Obviously an increase in global obesity rates was an unintended consequence of politically expedient farm subsidies in the American Midwest, but the causal connection is a direct straight line.
Putting the economic history aside, the key question in formulating a "sugar tax" is what drives a purchasing decision for a high-sugar food in Australia? Is it price? Convenience? Taste? Fast food defaults? Is it different between cereals and soft drinks?
If you’re advocating for a sugar tax without clearly understanding the purchasing mechanism(s) on the products the tax is intended to cover (whatever they may be), you’re just swinging and hoping, and using nationwide taxation to speculate effects on consumer behaviour.
For a tax on consumers to be effective in reducing consumption it has to be big enough to deter consumption vis-a-vis competitors. Currently tap water is high-quality and free. Soft drinks are expensive. Is making soft drinks slightly more expensive going to change the equation?
Don’t forget, high-sugar processed foods are already taxed higher than non-processed foods in Australia. By 10% under the GST. This has not curbed their consumption. Will increasing that to 20% for high-sugar foods move the needle? 30%?
Of course, any sugar tax will be commercially addressed by a processed food industry that is much faster, more adaptable and more sophisticated than our necessarily gradual and considered legislative process.
Anyone who thinks passing tax legislation through a bicameral legislature is nimble enough to outmanoeuvre Big Food on processed food composition is dreaming (and wasn’t paying attention to the decades-long process of getting the “tampon tax” addressed).
Prior to the GST, variable sales taxes existed on different classifications of foods. There was an entire industry around trying to classify foods from one class into another to avoid taxes.
(As an aside, the reason we call kiwifruit that is because the original name of “Chinese gooseberry” attracted additional import taxes levied on New Zealand berries into the US. Calling it kiwifruit took it out of the berry category.)
The “success” of pulling a tax lever on high-sugar foods will depend entirely on its legislative construction. Are you OK with taxing canned soup the same as soft drink? Probiotic yoghurt with biscuits? Natural fruit juices with chocolate milk? ANZAC biscuits? Birthday cakes?
I put “success” in quotes because will you consider it a success if these measures causes a rise in the use of industrial artificial sweeteners? What if it drops the bottom out of the Australian dried and canned fruit industries?
On a social level, are we really comfortable with classifying a slice of birthday cake as a taxable and government-discouraged sin?
All of this leaves aside the absurdity of trying to aggressively police the uncountable range of present and future products that sugar can be added to, while doing nothing about sugar itself (not that I am advocating we do).
The big question ultimately, however, is will any of this solve the obesity crisis?
The executive branch of government has arguably greater ability to influence sugar consumption than the legislative through public education, direct industry engagement, and consumer initiatives.
What about looking first at labelling of sugar content as a measure for saliency and debiasing? Imagine a big red circle with the amount of sugar per serving on the front of every processed food. Or even just highlighting it on the existing nutrition labels?
For a lot of Australians that might have a greater social impact than marginally increasing the price of a soft drink that, when bundled in a fast food combo, nobody really knows the price of anyway.
(And on that, are we sure incrementally taxing soft drinks wouldn't encourage people who might buy a single can of soft drink to instead purchase in bulk to offset price increases?)
What about a measure to lobby fast food franchises to default to serving water with combination purchases instead of full-sugar soft drinks? There are lots of Australians who wouldn't reach into a fridge for a can of soft drink but who don't say no when it's added to a meal.
In summary, there are lots of options to explore that are more suitable and effective than taxation. It’s important to think through the consequences of imprecise legislative action. I (obviously) remain unconvinced that a “sugar tax” will do any of the things it aims to do.
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