Rich on sugar tax

July 11th, 2014 at 7:00 am by David Farrar

writes at Stuff:

Sugar taxes will extract more money from citizens’ wallets for governments but do nothing to curb .

While sugar is seen by some as the current food demon, it’s important to dial back the hysteria for a fact-based discussion.

Sugars are an important part of people’s diets, providing energy for the body and brain. Over the past decade, sucrose consumption in New Zealand has declined, and reports suggest most people consume at moderate levels.

All this while obesity has been rising. The remaining part of the energy-in, energy-out equation is physical activity, but anti-sugar activists prefer to blame food companies.

Of course.

And note when they propose a new tax, they never propose lowering other taxes to compensate.

The inconvenient truth for those wanting to scapegoat full-sugar carbonated drinks – fizzy – is that there has been a dramatic drop in sales in the past 15 years as consumers turn to the growing array of zero calorie and diet fizz options now available.

With Kiwis eating less sugar and drinking less sugary fizz at a time of rising obesity levels, it’s nonsense to pretend fizz taxes are going to magic away the obesity problem.

I only drink a soda with sugar in it around 1% of the time – if nothing else is available.

Those arguing that because taxes helped curb tobacco harm they will work for sugar overlook the fact that tobacco taxes work only because they add close to 500 per cent to the cost of the product.

Those wanting to apply such taxes to fizz are effectively advocating for a 1.5 litre family serve of Coke to jump from $3.39 to nearly $17.

Don’t give them ideas!

And likening food regulation to tobacco regulation doesn’t bear even the slightest scrutiny. We have to eat food to live. Food consumed in moderation is not harmful.

Exactly.

A fizz tax of 10 per cent or 20 per cent will extract more money from Kiwis but leave buyer behaviour unchanged because, as British nutrition expert Professor Jack Winkler points out, “demand for soft drinks is very inelastic, very unresponsive”.

In his 2011 commentary in the British Journal of Nutrition, he said a 10 per cent tax on soft drinks would, at best, change behaviours by “less than a sip. It would not even cut sugar intake by a gram”.

But it would take more money out of taxpayers pockets and into the Government’s.

Tags: , ,

33 Responses to “Rich on sugar tax”

  1. Brian Smaller (4,026 comments) says:

    But it would take more money out of taxpayers pockets and into the Government’s.

    So it will be high on a Green/Labour/Mana/Dotcon government agenda then.

    Vote: Thumb up 9 Thumb down 2 You need to be logged in to vote
  2. Yoza (1,914 comments) says:

    First Labour want to outlaw rape and now they’re trying to outlaw sugar! What’s wrong with these poofters?

    [DPF: 20 demerits for trolling. And rape is already illegal]

    Hot debate. What do you think? Thumb up 9 Thumb down 17 You need to be logged in to vote
  3. Pete George (23,688 comments) says:

    Re extra tax, Rob Salmond has responded to DPF’s post on CGT and Cunliffe claiming this would raise an extra $4-5 billion per year.

    By the way, a capital gains tax which at full running is going to bring in 5 billion dollars a year, close to, 4 to 5 billion is the single biggest change to New Zealand tax policy in decades and it’s one that I’ve personally championed for years.

    Salmond provides a table of estimated revenue that reaches $3.669 billion by 2028 and concedes “David Cunliffe probably shouldn’t have used “$4-5 billion,” given these estimates” but defends the additional tax take of a CGT.

    I also want to chime in on the I’m-so-sick-of-it histrionics. It may come as a shock to David Farrar, but there are those of us who think the government should be doing more to provide social services in our community. Not just “different.” “More.” This is because government has a better, more socially optimal set of incentives in many policy areas than any other political actor.

    And sometimes doing more requires you to raise more money. Which might mean raising a new tax without taking off an existing one.

    So Labour’s plan is to substantially increase the tax take via CGT to spend more on social services. That’s a clear differentiation between the two parties.

    Vote: Thumb up 14 Thumb down 1 You need to be logged in to vote
  4. Mobile Michael (464 comments) says:

    More importantly, the health puritans want to restrict access to the so-called obesity causing food types to a similar arrangement as tobacco. To get a bottle of coke or a pack of chips you’ll have to ask at the counter and wait for the staff member to unlock the cabinet to get a white labelled product.

    Vote: Thumb up 7 Thumb down 0 You need to be logged in to vote
  5. david (2,564 comments) says:

    PG, so Salmond confirms the silent (perhaps whispered might be a better term) agenda of Labour. Bigger Government, more redistribution, higher taxes. Do they have some sort of Robin Hood fetish and the next thing we will see them all dressed in Lincoln Green (oh wait that one is already taken) What I want to know is who will play Friar Tuck? and who will play Maid Marion?

    Vote: Thumb up 8 Thumb down 1 You need to be logged in to vote
  6. Yoza (1,914 comments) says:

    … and who shot JR?

    Vote: Thumb up 0 Thumb down 13 You need to be logged in to vote
  7. OTGO (565 comments) says:

    If you mean Maid Maorion then that would be Meteria Turei.

    Vote: Thumb up 8 Thumb down 0 You need to be logged in to vote
  8. Judith (8,534 comments) says:

    I only drink a soda with sugar in it around 1% of the time – if nothing else is available.

    Whilst this is admirable, I don’t think we can use our ‘health conscientious, highly intelligent’ host’s example as a level of ‘typical’.

    The fact is that there is a large lump of our society who either don’t have that knowledge, or who live with the hopes that it won’t effect them. These people’s tastes buds are now so attuned to the taste of sugar, they actually like the sickly sweet drinks that taste like crap to the rest of us.

    Whilst I understand the arguments against a sugar tax, I acknowledge that we tax tobacco to offset the health costs involved, and really is this any different? People that consume large amounts of sugary products are developing heart disease and diabetes at very young ages. They are costing this country a fortune, that has to be paid for their entire life span once the diseases are active.

    So the question is, if we don’t tax the products that are causing the problem, how do we offset the medical costs, or better still encourage people not to drink/eat so much sugar – or even better, to take responsibility for their health.

    (PS, coke zero and some of the other non-sugar drinks, if consumed regularly enough, are almost as bad for you, and contribute to other health complaints – the trick is moderation – almost anything is okay, providing you don’t over do it and keep up physical exercise).

    Vote: Thumb up 3 Thumb down 2 You need to be logged in to vote
  9. Harriet (5,145 comments) says:

    “…..Whilst I understand the arguments against a sugar tax, I acknowledge that we tax tobacco to offset the health costs involved, and really is this any different? ….”

    As it said Judith ‘we have to eat to live’ & ‘we have to have sugar’

    Everyone will be taxed. Only smokers were taxed.

    Vote: Thumb up 6 Thumb down 1 You need to be logged in to vote
  10. Rich Prick (1,729 comments) says:

    God this is stupid. They never mention a “indolent tax” for the sloths who live on the sofa, but I suppose sugar is convenient to demonise and tax. But of course the better solution is no tax, and let people take responsibility for their own wellbeing. Yeah I know, the nanny’s can’t cope with that concept.

    Vote: Thumb up 8 Thumb down 0 You need to be logged in to vote
  11. Nigel Kearney (1,051 comments) says:

    if we don’t tax the products that are causing the problem, how do we offset the medical costs

    I have good news. There is a simple way to offset medical costs resulting from obesity that doesn’t impose costs on anyone who eats sugar/fat in moderation or with compensating exercise. Make obese people pay when they seek health treatment. There is no need to refuse treatment, just provide treatment and collect a proportion of the cost like any other debt.

    Vote: Thumb up 7 Thumb down 1 You need to be logged in to vote
  12. Disaster Area (41 comments) says:

    The problem is that the effects of sugar and lifestyle is a slow burn: you can’t feel the day to day effects. The odd bottle of fizzy drink here and there isn’t going to do you much harm, but over time it may.

    I don’t necessarily have an issue with bottles of soft drink – I rarely drink it myself, but the problem is with ‘hidden sugars’ that people may not know that they are eating.

    In any case, this is a moot argument. The real issue is this: if people do not change their diet and lifestyle there is going to be an explosion of diabetes and cardiovascular disease. This is going to strain the health service massively. Where will the funding for this come from?

    Think of it in terms of cigarettes. The odd smoke now and again might not feel like it’s doing you harm, but there cannot be anyone around now who doesn’t understand the eventual problems. The taxes on tobacco are designed to cover the costs of the healthcare and to dissuade people from smoking. The problem is that sugar has become so common in our lives that it takes a massive change to reduce it.

    The point of view of being anti tax is interesting. I would have thought most centre right people would have tended towards an argument that objected to their taxes being used to treat a preventable disease. Ok then, make it user pays through taxation.

    Vote: Thumb up 1 Thumb down 6 You need to be logged in to vote
  13. Harriet (5,145 comments) says:

    “……..Make obese people pay when they seek health treatment. There is no need to refuse treatment, just provide treatment and collect a proportion of the cost like any other debt……”

    That should also go for sexual healthcare – pay as you go – just like it is with dentistry. The sugar matter.

    We are already paying for the bad health costs of sugar to private dentists. We pay GST. They pay business taxes, high income taxes, staff taxes, ect.

    And it’s fucken expensive.

    And they don’t mention it. Ever.

    Vote: Thumb up 3 Thumb down 2 You need to be logged in to vote
  14. Judith (8,534 comments) says:

    Harriet (4,457 comments) says:
    July 11th, 2014 at 8:24 am

    Some sugars are better for you than white sugar. Some, especially the darker ones have a lower absorption rate, and therefore a lower GI value.

    Besides, there is an easy way around that, you simply tax foods that have more than a healthy percentage of sugar in the contents.

    Having said that, I’m not convinced that a sugar tax would work – it appears to be more of the government playing ‘mummy’. I would prefer to see my tax payer dollars spent on educating potential parents (that is, school children) in something like human development – so that by time they are responsible for their children’s well-being, they actually know what they need (in all aspects of parenting).

    Sadly, there are many families that no long have good parenting skills or the knowledge. In some cases the knowledge of what a child needs to be safe and healthy is not being passed from generation to generation.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  15. berend (1,716 comments) says:

    DPF: “Food consumed in moderation is not harmful.” Exactly.

    I’m sure smoking a cigarette a day is not harmful either, let alone smoking one a week.

    Vote: Thumb up 2 Thumb down 2 You need to be logged in to vote
  16. Kleva Kiwi (289 comments) says:

    This will be well funny when its pointed out that fruit and fruit drinks have some of the highest amount of sugar in them of all food groups, and not only that, the sugar is more acidic than refined white.
    Cant wait for Labour to start informing us masses who cant think for ourselves that there is going to be an additional tax on fruit. Didnt they recently campaign for GST free fruit?

    Vote: Thumb up 7 Thumb down 0 You need to be logged in to vote
  17. Psycho Milt (2,419 comments) says:

    Sugars are an important part of people’s diets, providing energy for the body and brain.

    Rich has a strong case. Why undermine it with a straightforward lie? If you put in a piece of blatant corporate weaselry like that, the rest of the piece appears suspect.

    Vote: Thumb up 1 Thumb down 4 You need to be logged in to vote
  18. Harriet (5,145 comments) says:

    “….In some cases the knowledge of what a child needs to be safe and healthy is not being passed from generation to generation….”

    Then just educate those ones. We don’t need leftist crap installed upon the rest.

    Infact the left should stay right away from kids who don’t come up on the government radar Judith.

    We should get the government right out of education and give us better healthcare instead.

    Vote: Thumb up 3 Thumb down 3 You need to be logged in to vote
  19. CharlieBrown (1,028 comments) says:

    Why don’t the people advocating for such a tax improve the lives of everyone else and jump of a very high cliff. These people are just plain nuts at best and would do the rest of humanity a favor by leaving the human race. These people are destructive, they make everybodys lives that little bit worse just to forward their pathetic ideologies.

    Vote: Thumb up 6 Thumb down 0 You need to be logged in to vote
  20. MikeG (425 comments) says:

    and who does Katherine Rich represent?

    Vote: Thumb up 1 Thumb down 2 You need to be logged in to vote
  21. Rich Prick (1,729 comments) says:

    “and who does Katherine Rich represent?”

    More often than not, the voice of reason.

    Vote: Thumb up 5 Thumb down 1 You need to be logged in to vote
  22. burt (8,324 comments) says:

    But it would take more money out of taxpayers pockets and into the Government’s.

    No more needs to be said about socialism.

    Vote: Thumb up 5 Thumb down 0 You need to be logged in to vote
  23. bushbasher (16 comments) says:

    @DPF, @Rich Prick, @MikeG

    She is CEO if the Food and Grocery Council (of which I am a member) @DPF it would be good if you could have included this in your post for the sake of transparency.

    Vote: Thumb up 1 Thumb down 2 You need to be logged in to vote
  24. Colinxy (25 comments) says:

    Judith wrote:

    “Some sugars are better for you than white sugar. Some, especially the darker ones have a lower absorption rate, and therefore a lower GI value.”

    Really? So you believe brown, raw sugar (etc) is actually different from “white” sugar? Do you know how a sugar refinery actually works?

    “Besides, there is an easy way around that, you simply tax foods that have more than a healthy percentage of sugar in the contents.”

    Like manuka honey, fruit juices and so forth? Do you reckon berries and other fruit should be highly taxed as well? As in what is a “healthy percentage of sugar in the contents”?

    Vote: Thumb up 6 Thumb down 0 You need to be logged in to vote
  25. Meatloaf (239 comments) says:

    There are beneficiaries who don’t eat fruit, and are constantly using their community services card for the doctor’s visit, which means the taxpayer is paying. If the government wanted to address this, what ought to happen, is for those who’ve gone to the doctor less than 3 times a year, and 0 times to the hospital. They should get a $100 fruit voucher. Some people can’t afford fruit, and so giving healthy people a fruit voucher would subsidise health. The government would actually save, by less doctor’s visits, and those who eat healthily would have more money in their pockets.

    But why do that, if they can make money out of people by taxing sugar? What this actually means, is those who can’t afford to eat well, will spend even less on fruit.

    Vote: Thumb up 1 Thumb down 1 You need to be logged in to vote
  26. Fentex (1,042 comments) says:

    And likening food regulation to tobacco regulation doesn’t bear even the slightest scrutiny. We have to eat food to live. Food consumed in moderation is not harmful.

    We do not have to consume fizzy drinks, so this problem is avoided by taxing them rather than sugar as a whole.

    A fizz tax of 10 per cent or 20 per cent will extract more money from Kiwis but leave buyer behaviour unchanged because, as British nutrition expert Professor Jack Winkler points out, “demand for soft drinks is very inelastic, very unresponsive”.

    I’m confident that when necessary opponents of another tax will find someone to make exactly the opposite claim – that taxes distort markets and would therefore harm them. Advocates against taxes seem to find it easy to pick which ever suites them between “It will not change anything” and “it will distort the market”.

    I think history is well on the side of proving that taxes on consumables can reduce their consumption.

    Though an interesting bit of history;In the eighteenth century when tax on tea imports to Britain was very high smuggling was so rampant that the cost to the public for tea was less than the tax by weight.

    As with drugs today it’s a serious problem to try and circumscribe consumption when demand is high.

    And the idea that “demand for soft drinks is very inelastic, very unresponsive” is opposed to the claim that “Over the past decade, sucrose consumption in New Zealand has declined, and reports suggest most people consume at moderate levels.” where the elasticity of demand seems to be contracting all on it’s own accord.

    Personally I’m not a fan of such a tax, but not because I don’t think it can work. I think it can, I think we’ve seen it’s like work in the past and will again in the future.

    Vote: Thumb up 0 Thumb down 1 You need to be logged in to vote
  27. Colinxy (25 comments) says:

    For those attacking fizzy, soft, soda drinks:

    What contains more sugar? A glass of “fizz” or a glass of fruit juice?

    Vote: Thumb up 2 Thumb down 0 You need to be logged in to vote
  28. Meatloaf (239 comments) says:

    Fentex, the issue for me, is exercise, fruit consumption and alternatives. If I’m a bit tight, instead of eating oranges I drink Ribena to get my Vitamin C. Putting a tax on one thing, means people have less money. Now the poor, are finding it difficult to eat healthily, so we say put a tax on the unhealthy stuff. That doesn’t help. Then their’s exercise. I go for 6 hour walks at least every two weeks. If I’m burning the weight off, why should I get taxed for having sugar. Again, my weight problems are because I drink Ribena to save myself money from eating oranges to get my Vit C intake.

    Then there are the alternatives. Some people would argue that artificial sweeteners are worse for you than sugar. So to me a wholistic solution is the solution. Those who don’t cost the hospitals and doctors which are government subsidised should get a $100 fruit voucher, or a $100 gym voucher. This way those who are finding it difficult to buy fruit, will be able to do so, more money in people’s pockets and yes the government would save money.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  29. OneTrack (3,237 comments) says:

    Disaster Area – ” I rarely drink it myself, but the problem is with ‘hidden sugars’ that people may not know that they are eating.”

    The progressive left aren’t worried about hidden sugars. All they are worried about is taxing( aka punishing) big American companies.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  30. labrator (1,850 comments) says:

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  31. chiz (1,164 comments) says:

    Psycho Milt:

    Sugars are an important part of people’s diets, providing energy for the body and brain.

    Rich has a strong case. Why undermine it with a straightforward lie?

    What lie? Sugar is an energy source for our body and brain.

    Vote: Thumb up 1 Thumb down 0 You need to be logged in to vote
  32. Disaster Area (41 comments) says:

    So how about this for a solution: 1. Get rid of GST on fresh fruit and vegetables to make them cheaper than going to a fast food outlet. 2. Make council run gyms and pools free for morbidly obese people 3. When an obese person goes to the Doctor, in order to qualify for treatment they have to attend diet and nutrition classes. 4. Increase the tax on ADDED sugar in food.

    I’m sure that there is research to say that the body deals with sucrose (‘white sugar’) and fructose type sugars differently as the fibre in fruit affects the digestion process.

    And ring fence the money raised in tax for health education/ fitness programmes.

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote
  33. Fentex (1,042 comments) says:

    I think peoples weight problems are solely about a lifestyle that minimises exercise (travel by car, escalators and lifts, working at desks) removing incidental exercise.

    Combined with easy access to calories that modern wealth and industry provides and weight gain seems likely.

    Then with a public health care system funded by general taxation obesity becomes a public health issue due to it’s cost and government interest in legislated solutions to it is aroused. Arguing that the obsess should be denied healthcare is logically an argument against public provision of healthcare – because if the healthcare we get is the healthcare we individually choose by our actions then our healthcare is our own responsibility.

    Much as demanding wearing helmets cycling is an imposition on freedoms a desire to be free of such legislation is a desire to not contribute to public healthcare and take sole responsibility for oneself, or (more unlikely) a desire to be willing to contribute considerable more to public healthcare to cover the irresponsible (I think that is so unlikely among those complaining about impositions on their freedom I dismiss it).

    So I think those who argue against all such efforts by government to limit the exposure of public health care to decide if they prefer the thought of a nation where health is privately insured and lawsuits abound to ascertain responsibilities (an inevitable consequence I think) or one where healthcare is public, efficient but includes some impositions to minimise it’s exposure?

    Vote: Thumb up 0 Thumb down 0 You need to be logged in to vote