Tax on sugary drinks and fatty foods not planned, minister says

The Government says it has no plans to introduce a tax on soft drinks and fatty foods, despite a University of Otago study showing such a move could improve people's health.

The study, by researchers from Otago and Auckland universities and published yesterday, found that based on 32 studies from high-income countries, there would be a 0.02% fall in energy intake from saturated fat for each 1% price increase. A 10% increase in the price of soft drinks could cut consumption by up to 24%.

It also found the consumption of fruit and vegetables could increase by between 2% and 8% for each 10% decrease in price.

However, the authors found that a subsidy could result in people buying fewer other healthy products, such as fish, or more unhealthy products.

The study also found that people from lower socioeconomic backgrounds were more likely to change their habits as a result of taxes or subsidies.

Co-author Prof Tony Blakely, from Otago University's department of public health in Wellington, said there should be taxes on unhealthy foods, just as there were on alcohol and tobacco.

This was especially the case for sugary drinks, for which price increases were shown to have the greatest impact on consumption.

''We think there is probably enough information to start acting now,'' Prof Blakely said.

However, Health Minister Tony Ryall told the Otago Daily Times the Government had no plans to introduce taxes on unhealthy foods.

''Such a tax would add to the burden of many families in tight economic times,'' he said.

Prof Blakely accepted Mr Ryall's argument that just increasing taxes would add to financial strain. However, if subsidies for healthy foods were introduced alongside taxes it was possible families could be better off financially.

University of Canterbury senior lecturer in economics Dr Eric Crampton said introducing taxes and subsidies on food would be difficult.

''They're the kind of thing that sounds simple, but wind up being a bit of a compliance nightmare,'' Dr Crampton said.

Issues such as whether frozen or canned foods should be subsidised and where to draw the line in terms of how processed a food was would be difficult to administer, he said.

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