A tax on sugar-sweetened beverages: What the modelling shows

This AMA report describes how overweight and obesity is a significant and growing issue in Australia. Sugar-sweetened beverages (SSBs) are a major contributor to the obesity crisis and provide almost no nutritional benefit. Obesity is a major risk factor for a range of chronic and preventable conditions including type 2 diabetes, heart disease, stroke and cancer. With increasing population body mass index (BMI), direct healthcare costs increase, many of which are borne by government(s).

A tax on SSBs would be an important first step towards tackling obesity and would raise revenue to take further steps. The AMA has undertaken original economic modelling to assess the impact of a tax on select SSBs. This indicates that a tax of 40 cents per 100g of sugar would reduce sugar consumption from soft drinks by 12 to 18 per cent and raise annual government revenue of $814 million to $749 million. 

There would be minimal impact on the domestic sugar industry. Reduced sugar consumption and improved diet would likely lead to a reduction in the prevalence of obesity and substantial healthcare savings.

1. Explain key components of the report.
2. List main recommendations.
3. Recognise the benefits as a result of implementing the new tax.