Injecting some nutrition into the GST

Like many of us, I suspect, I have a strong disposition towards eating significant quantities of chocolate on a regular basis, so I do have some vested interest in the so-called “fatty food tax” that is being bandied about as an option in the war on obesity. The Obesity Policy Coalition, which consists of Cancer Council Victoria, the Victorian branch of Diabetes Australia, VicHealth, and the World Health Organization Collaborating Centre for Obesity Prevention at Deakin University, proposes that an annual nutritional survey be introduced, and that the data gathered from this survey be used to drive the particular foods that the tax would target.

While conservatives are sure to baulk in quick time at the prospect of another tax being introduced and the government sticking its grubby nose into our shopping trolleys, I really do think that a tax-neutral scheme could work, work well, and better yet for the poll junkies in the Rudd Government, be sold effectively to a sceptical public. Tax-neutral, you ask? As Jane Martin suggests in the article linked above, what I believe would work best is for healthy foods (e.g. particularly fruit and vegetables, wholegrain-based foods, lean meats, etc.) to be subsidised by the government through a reduction in the rate of GST for those items, with tax reductions funded through corresponding increases in the rate of taxation on unhealthy foods (e.g. alcohol, sweets, high-fat snacks, soft drinks, energy drinks, etc.). Such a scheme would inject two powerful incentives into the market for people to think more carefully about the choices they make at the supermarket, and the sorts of food that they should be eating a lot of.

Making the scheme tax neutral cuts through a lot of the “tax rubbishing” that is sure to be done by the sorts of one-eyed ideologues who would be happy to drive their expensive cars through the undergrowth before they will contribute to a public roads system, or are happy to see the less well-off attend substandard schools and be treated as substandard hospitals because they don’t believe in public education or health systems. In short, such people are selfish mugs, and normally shouldn’t be given the time of day. However, they also shouldn’t be allowed to let their prejudices taint the perspective of everyday folk who just want the best for their families. Presumably there will also be costs to the economy involved in instantiating such a scheme, but I’m fairly certain that modelling of the scheme would produce long-term health benefits for the nation that dwarf the initial costs of its introduction.

This issue could be a quick win for public health; all that is needed is some analysis as suggested, what is likely to be some fairly gentle tuning of an existing tax measure, and the job is practically done. Mr. Rudd? Ms. Roxon?

14 thoughts on “Injecting some nutrition into the GST

  1. Noting that there are some conditions needing ketogenic (basically extremely high fat) diets, such as some forms of epilepsy where the doses of anticonvulsants are so toxic that the side effects of high-fat diets and obesity are less than the sequelae of seizures, I began to think of an easier tax… that would be extremely fair regarding supplying the funds to manage mortality and morbidity associated with obesity….

    Have a tax based on body composition determined by an annual fully-funded medical checkup for all members of the family. The checkup would be required to claim a deduction (or straight bonus), and also permit a doctor’s certificate (e.g. for those with a true metabolic disorder).

    The advantage is that the checkup would also be associated with advice on achieving and maintaining a healthy body composition.

  2. Wonderfully rational approach I think – definitely a techie’s approach to the problem!

    Surely it would not be easier from a political point of view though. I think we’d have enough problems convincing people that unhealthy food should be taxed higher than healthy food let alone a fairly invasive annual medical test! We would certainly be venturing into the realm of encroaching on people’s private lives – at least that would be a lot of people’s perception…

  3. Body composition for fat involves measuring hight, mass and three skinfold thicknesses, so is no more invasive than taking your shirt off and the “pinch tests” are hardly more time consuming than having your blood pressure taken. Note you can easily become obese eating too much healthy food (eggs, dairy, esp).
    As to the politics, you can easily sell a free annual standard consultation if it offers a cash reward (a custom stat dec signed by the doctor or nurse, redeemable at licensed post offices or participating supermarket chains) rather than a penalty. Lets say $50 bonus for healthy range initially on top of the cost of the consultation by the health professional – so probably cheaper than implementing a new tax. Remember that other quick checks (bp, quick vision check, whatever) could happen in the same consultation, providing good planning data at no extra cost.

  4. Yeah… maybe with some incentives built in it could work… a “turn-up” bonus/tax break that is proportional to your result. I think going with carrots will work better than with sticks.

  5. The tax break thing probably wouldn’t incentivise those with bugger-all taxable income, who are actually more likely to eat junk food. The minimum bonus would be the health consultation that included a few words of advice and a pamphlet.
    Of course, you’d have to include in the unhealthy bracket those who are under as well as overweight.

  6. Meh. I don’t think you have to be a conservative to find this sort of stuff vaguely distasteful. Well, maybe it has its uses for some types of food. But taking the initial chocolate example… it’s a freaking luxury for God’s sake. If you know you shouldn’t eat it by the gallon, as opposed to a little every now and then… then don’t!

    As for a tax based on body composition… obscene. At some point, you have to accept that you can’t build a perfect world. In fact, if it’s taxes on fatty foods or taxes on your imperfect body, I will swallow my bile and take the former. At least it’s only an annoyance.

  7. I don’t know that chocolate these days can be considered a luxury anymore. Chocolate’s cheaper than a decent loaf of bread as far as I can tell. :)

  8. Don’t overcrowd the gp waiting room with people clamming for their monetary beneficial fat checkup when there are more important/pressing/urgent cases.

  9. Well that is true, under the sort of scheme Dave mentions, GP workload would have to be managed carefully. In fact, it’s probably another argument (as if we needed any further argument) for increased funding of public health.

    I know the NHS weighs you and performs a basic check-up when you register to use public services in the UK, so it’s not as if there is no precedent for pro-active public health services.

    Of course, I think the original proposal (a tax on fatty food) is an easier reform to introduce.

  10. Could food manufacturers get around a fat tax? Those with slightly above the fat threshold would somehow write the figure as slightly below the fat threshold while those significantly over the fat threshold would write fat in terms of beneficial and non-beneficial fat?

  11. I think things would become confusing if the tax was applied based on the actual amount of fat content in the food product. Although I am sure that you could codify a threshold of saturated and unsaturated fat allowable, you probably wouldn’t want to do that, because it would encourage manufacturers to only slightly vary their product in order to beat the tax. That would become a nightmare for retailers trying to maintain prices.

    So although it is not as an explicitly neat solution as basing the tax rate on the amount or proportion of fat content, I think earmarking certain classes of food (e.g. chocolate bars) in the legislation might be the way forward. That might sweep up a few low-fat chocolate bars in the mix, sure, but the alternative is a bureaucratic schemozzle.

  12. http://www.voxeu.org/index.php?q=node/4061
    The rise of obesity in Europe: An economic perspective
    (The “title” in your browser is “should the government intervene to reduce obesity”)
    It’s a good overview of EU obesity rates (between counties and cf the US. Oz rates are pretty much the same as the US, UK a bit below, and other well-known countries in the EU running at a third of the US/Oz rates.

    The key problem with taxes on foods include
    * ANY food can be fattening. (Hell, free amino acids, the building blocks of protein, often added to products to fudge the figures, are mostly turned into sugars on the gut surface for quick absorption, and it’s blood sugar levels that create obesity and diabetes)

    * Fresh or minimally processed foods (including frozen vegies, UHT milk, premixed salads without dressing) vary in content, and it’s probably better to exclude minimally processed foods altogether. (Hmmm…. what about staples that are minimally processed like butter and marg? What about vegemite?)

    * It’s probably highly prepared foods only that should be taxed if you MUST have a tax.

  13. Agree – if it was to be done, you’d have to look specifically at highly-processed foods where people are inclined to consume large portions.

    Realistically I think the group of food/drinks we are looking at is reasonable small. Basically I think we are talking about junk food. There is likely to be a lot of debate around the margins, but if in doubt, so-called snacks that contain a distinctly unsnack-like proportion of one’s fat/sugar/salt RDI would be high on my hit list.

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