WHY TAX ON SUGAR SHOULD BE HIGH ON THE AGENDA
It’s addictive, makes you feel good for a little while, and can cause long term health complications. And just like alcohol and tobacco, it’s the perfect base for a disincentive tax! The UK will introduce a tax on sugary drinks in 2018 at a rate of 24 pence per litre. Australia should follow suit. Here’s why…
Assuming Australia were to follow Britain’s lead, 24 pence is equivalent to 58 Aussie cents at today’s exchange rates. This would add 34.80 cents to the retail price of a 600ml bottle of soft drink which currently retails for about $3.50. I’m no economist, but I don’t see a price shift of 34.80 cents causing a large decrease in demand for sugary drinks. However, it will provide extra funding for services such as Medicare which bears the brunt of diet related illnesses.
According to a 2015 Roy Morgan Study, between 50-60% of Australians aged 14 to 49 drink at least 1 soft drink per week. That age group makes up around 16 million of Australia’s 24 million 
people. If half of those drank at least one 600ml bottle of soft drink a week, it equates to roughly 416 million bottles consumed per year. At 34.80 cents tax per bottle, that’s a tidy $141 million in tax revenue!!And that’s a conservative estimate…
- It doesn’t’ include people outside the 14-49 age bracket who may consume soft drinks
- It assumes people of that age group are only consuming one serve per week, though the research states ‘at least’ one serve. In reality, it could be more.
- It’s based only on single serve portions and does not take into account demand for larger quantities.
- It does not take into account fruit drinks and reconstituted juices (which the UK tax does)
So there you have it. There are obvious health benefits associated with consuming less sugar. But even if you choose not to, you wouldn’t notice the extra tax you’re paying since it’s only 34.80 cents per week.
ANTONY MONALDI CA
Snr Accountant – OPTIMA PARTNERS
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