University of Auckland says a tax on everyday food items could save lives

  • News
  • July 13, 2015
  • Elly Strang
University of Auckland says a tax on everyday food items could save lives

The University says food taxes and subsidies could improve diets and reduce diet-related deaths in New Zealand.

A study team estimated the effects of five different tax and subsidy scenarios.

 A computer ‘macro-simulation’ model looked at different factors, including household food expenditure, death rates, changing consumer demands and the links between diet and disease.

Professor Cliona Ni Mhurchu, who led the study, says it found a tax on unhealthy foods and a subsidy on healthy foods could prevent or postpone a number of early deaths in New Zealand.

Tax scenarios explored by the university include a 20 percent subsidy on fruit and vegetables and a 20 percent tax on major dietary sources of saturated fat, salt and greenhouse gases.

Targets include bread, cereal, most meats, eggs and milk.

The university says this tax would prevent or postpone 1500 deaths a year in New Zealand.

Currently, almost a third of adults and one in ten children in New Zealand are obese.

Obesity also currently accounts for more deaths than tobacco smoking.

NZ Food and Grocery Council CEO Katherine Rich has called the report “lunacy”.

She says suggestions to tax salty, fizzy, fatty and sugary foods are nothing new.

“But what’s new in today’s announcement, and buried in the small print, is a 20 percent extra tax on the staple foods that New Zealand families rely on – bread, breakfast cereals, eggs, cheese, milk, beef and lamb,” Rich says.

“These foods are an important part of a healthy and balanced diet for most New Zealanders.”

She says taxing everyday grocery items would add $1 billion a year to families’ grocery bills.

“To give some specific examples, these taxes would generate $40 million from taxing eggs, $92 million from milk, $56 million from breakfast cereals, $90 million from bread, $74 million from cheese, $40 million from butter and margarine, and $70 million from sausages and other packed meats. And that’s just supermarket sales,” Rich says.

The report by the University of Auckland also said that Maori and low-income New Zealanders are the most likely to benefit from the taxes, as they have a greater chance of diet-related diseases.

But Rich dismisses this theory.

“I would like to see them try to explain to some of New Zealand’s poorest families why they should pay more for their bread, eggs, cheese, mince and milk,” she says.

Taxpayers’ Union executive director Jordan Williams has also been vocal about opposing the idea.

“Ramping up taxes on basic staples under an arrogant guise of helping the poor is surely a cruel joke,” Williams says.

“Pulling numbers from secret computer model and boldly claiming that it will be the amount of ‘lives saved’ is political advocacy, not academic research.”

The Taxpayers’ Union recently criticised a study done in Mexico that claimed it saw a 12 percent drop in soda sales after a soda tax was introduced.

Sales figures collated by Nielsen found that the tax had almost no effect on the volume of soda sales.

Despite these findings, previous studies have found a food tax works.

The European Commission found that specific taxes on sugar, salt or fat do cause reduced consumption, but it can also drive consumers towards cheaper products.

What are your feelings towards a sugar, fat or salt tax? What effect will it have on your business?

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