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New tax to make hundreds of items in every Aussie supermarket more expensive

The government is under pressure to implement a sugary drinks tax to improve the nation's health.

Woman walking down supermarket aisle next to wad of $50 notes
Aussies could soon be forced to pay more for sugary drinks. (Source: Getty)

Aussies could soon be forced to spend even more money on hundreds of supermarket items. A big debate has been sparked in Australia about whether a sugar tax should be imposed to improve the nation's overall health.

A federal parliamentary probe into diabetes has recommended slapping a tax on sugar-sweetened beverages (SSBs) and it has the backing of the Australian Medical Association. AMA President Professor Steve Robson said it could be the game-changing ingredient to reducing the number of people with diabetes.

“A sugar tax would have a huge impact on Australia’s health system and the AMA’s modelling suggests a sugar tax could result in government revenue of $4 billion across four years, which could be used to fund further preventative health activities,” he said in a statement.


“We are 100 per cent behind this sugar tax on sugar-sweetened beverages because we know it could help reduce the prevalence of type 2 diabetes in Australia, as well as reducing other chronic diseases.

“Prevention is better than cure and this inquiry has realised we need to be ahead of what is a national health crisis.”

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The AMA predicts a sugar tax could result in 16,000 fewer type 2 diabetes cases as well as 4,400 fewer cases of heart disease, and 1,100 fewer cases of stroke over 25 years.

Independent MP for Makellar Dr Sophie Scamps is calling on the government to make this a priority, as well as restrict the marketing and advertising of unhealthy food to children, which was another recommendation from the parliamentary inquiry.

“It will just take guts for the Albanese government to stand up to the powerful soft drink and junk food industry,” Scamps said.

Dozens of countries around the world have introduced a type of tax on sugary beverages.

But each one has a different way of implementing it.

In Mexico, the tax is one peso per litre for all sugary drinks. The increased cost saw an overall reduction in the volume of sugary drinks purchased, and this was largely seen amongst poorer households and those that previously purchased high amounts of the drinks.

While in the UK, there are two taxes: one for more than 5g of sugar per 100ml and the other for more than 8g of sugar per 100ml.

The tax there saw a "widespread reformulation to reduce sugar levels" in sugary drinks, according to a report, and the proportion of drinks available in supermarkets with high sugar content dropped.

So it would be up to Australian authorities as to how they want to target sugar.

The AMA said a proposed tax rate of $0.40 per 100g of sugar would raise the retail price of the average supermarket sugary drink by 20 per cent. For example, the amount of tax paid on a 375ml can of Coca-Cola with 40g sugar would be $0.16.

It would likely increase the cost of supermarket items like soft drinks, cordial, juices, sweetened coffee and tea, sports drinks and other beverages.

Nick Coatsworth, Australia's former Deputy Chief Medical Officer, said it won't change people's behaviour and they'll be stung even harder at the checkout during a cost-of-living crisis.

"I think we should drop the idea completely," he told radio station 2GB. "We're already a very high taxing country.

"And if you really want to change people's behaviour with regard to sugar, it's not at the deli checkout or at Coles. It's with education. It's what you're doing in the education system. It's by providing housing. It's by reducing stress in people's lives."

Members from the Coalition who were on the parliamentary committee that made the 23 recommendations released a statement warning of the impact of a sugar tax.

“While not discounting the evidence base surrounding the link between SSBs and contribution to obesity and obesity-related conditions such as type 2 diabetes, we are not convinced that a tax on SSBs would be an effective or targeted measure or that it could be implemented without disproportionate impact on the community,” the dissenting report said.

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