Against the Sugar Tax

Soft drinks.

The Greens have announced a push to introduce a 20% tax on “all water-based beverages with more than five grams of sugar per 100ml”.

The LNP have said they will oppose any bill to implement a sugar tax in Australia, however the idea is gaining ground abroad.

Britain’s Conservative government have passed legislation for a sugar tax, to commence in 2018, and Mexico adopted a sugar tax in 2014.

The Grattan Institute released a report yesterday touting the potential for a sugar tax to raise $500 million whilst tackling obesity.

The sugar tax is a terrible proposal.

All consumption taxes are inherently regressive, a sugar tax would be especially so.

A consumption tax on something that people consume “equally” will account for a higher percentage of your income the lower your income is.

A sugar tax is even more regressive because people with lower incomes are more likely to consume soft drinks. The wealthiest are less likely to get their caffeine from Coca-Cola.

The $500 million that the Grattan Institute and The Greens propose to raise from a sugar tax will come disproportionately from the pockets of the working poor.

The Greens’ embrace of a sugar tax demonstrates their weakness when it comes to class issues. A sugar tax is a measure that essentially blames poor people for consuming soft drinks, whilst ignoring the fact that it is massively profitable soft drink manufacturers who produce and aggressively market these unhealthy products.

If soft drinks are a public health risk then it is soft drink manufacturers who should be penalized. The working poor hammer caffeine and sugar all day long because they are essential (if destructive) tools for getting through long days doing garbage low paid work.

1 Comment

  1. Kieran’s argument here applies equally to exise on tobacco & alcohol. Does he oppose them, as well?

    Now, while I’m definitely in favour of hitting junk food companies where it hurts, I’m not so critical of a sugar tax. While not actually advocating it, I would refrain from opposing it if there were sufficient compensation paid to people on Centrelink benefits.

    ABS conducts the Household Expenditure Survey, which provides very detailed information about the expenditure patterns of the many & varied household types, across all income brackets, in Australia. It is able to calculate the impact of price &/or taxation changes for people on Centrelink benefits, and has done so several times in the past. If the sugar tax were to increase their cost of living by (say) $5/fortnight, pensions & allowances could be increased by $10/fortnight and the Government would still be well ahead because of all the sugar consumed by people in waged work.

    If it was done, I’d favour a sugar tax as an exise, imposed on all sugar manufactured in or imported into Australia and on the added sugar content of imported processed foods & drink. Treat it just like alcohol, tobacco & petrol exise. That way, it would capture all dietary added sugar, not just sugary drinks.

    As Kieran has noted, the Greens have missed the class-biased nature of their proposal. As such, I would oppose it unless it was modified along the lines I’ve suggested above. But I don’t expect the current Government to do anything about it. This mob still accepts donations from tobacco companies, so I won’t be holding my breath waiting for them to take any measures which might affect demand for the product of capitalists operating sugar farms or sugar processing factories.


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