The New Zealand Initiative's Jenesa Jeram, left, and Dr Simon Thornley are on either side of the sugar tax debate.

Barely a month goes by without the spectre of sugar tax being raised as a weapon in the fight against obesity. We asked experts on either side of the debate to put forward their best arguments for and against implementing a sugar tax in New Zealand.

Dr Simon Thornley is a public health physician and spokesman for FIZZ, a a group of researchers and doctors who advocate for ending the sale of sugary drinks.

He's arguing the case for a sugar tax. Jenesa Jeram is a policy analyst with The New Zealand Initiative, a think tank, which conducts public policy research. She's in the no camp.

THE CASE FOR SUGAR TAX: FIZZ's Dr Simon Thornley

New Zealanders are suffering a health crisis likely to be caused by excess sugar intake

New Zealand has the third highest proportion of overweight children in the developed world out of 34 countries, as measured by the Organisation for Economic Co-operation and Development (OECD), with about 33 per cent of children classified as either overweight or obese in 2010.

About-one third of New Zealand adults are obese, and our country is the third fattest nation on this score in the OECD, behind Mexico and the United States. New Zealand is 10th in the OECD in terms of proportion of people with diabetes (one in 10 adults) with one in four adults having pre-diabetes. A disease strongly linked with diabetes and obesity - cardiovascular disease - is the leading cause of death in New Zealand.

New Zealand also has high rates of dental caries in children and treatment poses a significant cost burden to the taxpayer. About 5000 Kiwi children per year require treatment each year to remove severely decayed teeth. Most of these problems are attributable to excess sugar intake.

The weight of scientific evidence shows that people who eat more sugar (sucrose) are more likely to put on weight, become diabetic and develop cardiovascular disease, compared to people who eat less. A range of other diseases and conditions are associated with excess sugar intake, including rotten teeth, high blood pressure, gout, and behavioural and learning disorders in children.

We are eating and drinking too much sugar

Our supermarkets are loaded with sugar, particularly in the form of fruit juices, cordials, soft drinks, breakfast cereals, biscuits and cakes. New Zealand children report eating and drinking about 17 teaspoons per day of sugar, with about 25 per cent of this from sugary drinks.

This figure is likely to be underestimated, since adults and children tend to underestimate their sugar intake. Scientific authorities recommend no more than six teaspoons per day of added sugar for children and none for children less than 2 years old.

Evidence indicates that a sugar tax will improve the health of Kiwis

The most effective means of reducing harm from tobacco has been through imposing an excise tax. We see no reason why a price increase for sugary drinks will not lead to a similar reduction in sugar intake.

Mexico has implemented a 10 per cent excise tax on sugary drinks. Initial results suggest a reduction in intake in sugary drinks. Substantial long-term benefits to the country in terms of improved health and reduced healthcare costs are projected.

A sugary drink tax (US $0.01/30g) in Berkeley, California was introduced in 2014. It has seen an average 21 per cent reduction in sugary drink intake in that city, compared to an average 4 per cent increase in intake in comparison US cities.

A sugar tax is administratively simple to introduce, in a manner similar to taxes on alcohol, tobacco and fuels. Such a tax is likely to save the taxpayer thousands of dollars in avoided healthcare costs.

Funds raised by the tax, which are likely to be substantial, may be used to fund obesity and disease prevention programmes.

THE CASE AGAINST SUGAR TAX: The New Zealand Initiative's Jenesa Jeram

A sugar tax could hurt the poor

There are certain policies worth experimenting with. If they are of low cost and will not leave the population any worse off, there is no harm in trying. A sugar tax is not one of those policies. No matter which way you cut it, a sugar tax is regressive: people on lower incomes will pay disproportionately more of the tax than people on higher incomes.

Obesity and obesity-related diseases are disproportionately suffered by lower socioeconomic groups, and it is understandable that sugar tax advocates would want to ease the financial and emotional burdens related to illness. But a sugar tax is a punitive and counter-intuitive way of addressing the problem: make poor people poorer because it's for their own good.

There will be some who argue that those on lower incomes will be most responsive to price increases. But one way of cutting spending is to shift to cheaper brands. Many sugar tax advocates argue that an excise tax worked to reduce tobacco consumption, so it should work for sugar. Yet it is important to remember the magnitude tobacco taxes are currently at. If the tax is really high, like tobacco excise, then there is a greater likelihood people could reduce their consumption accordingly.

Tobacco also has few substitutes, while sugary foods have many. Keep in mind that the more comprehensive (thus likely more effective) the tax, the more likely it is that it will cover what some would consider "essentials". But just like with tobacco, the tax remains extremely regressive for those who do not change their eating habits.

In reality, there are a variety of reasons why people make the diet decisions they do, and sustenance is just one reason. For those who cannot afford other material luxuries, food may be one of the few luxuries a family can indulge in.

Most studies used as evidence do not adjust for how people act in the real world

In the absence of real world evidence, most of the public health studies used as evidence for a sugar tax are based on economic modelling. The problem is, any economic model is only as reliable and strong as the assumptions it makes. And there are two common flaws with the assumptions made in these public health studies (see The New Zealand Initiative's The Health of the State report for examples).

The first is that many studies do not adjust for substituting taxed unhealthy items with untaxed but equally unhealthy items. For example, for people who want to satisfy their sugar cravings, a soda tax may encourage people to switch to candy or flavoured milk.

The second flaw is that many studies that focus on consumer expenditure do not consider the fact people might be downshifting to cheaper brands or cheaper sizes ("family sized" or bulk items). Switching from Coca-Cola to Homebrand cola will cost less but have no health benefits.

There are a growing number of countries that have introduced a sugar tax, and some commentators are urging New Zealand to jump on the bandwagon. While various countries have implemented different variations of food taxes, there has yet to be formal evaluations that prove these taxes reduce obesity.

Other proxies of success, such as purchasing decisions still do not give us the missing piece of the evidence puzzle: whether sugar taxes affect obesity. It is far too early to celebrate examples like Mexico's miniscule decrease in soda purchases when it is not yet clear if the total calories consumed has been affected, and how that affects health outcomes.

The "costs to taxpayers" argument is overblown

A seemingly compelling argument for a sugar tax is that obesity costs the public purse. Treating obesity-related illnesses is expensive but the "costs to taxpayers" of avoidable diseases can exaggerate the real burden to the public purse.

Most "cost of illness" studies talk about the cost of diseases like obesity, without putting those costs into context. After all, there are costs related to living long and healthy too, including end-of-life care and superannuation. In other words, they don't talk about the net costs of obesity. "Cost of illness" studies also often conflate fiscal costs with private costs into one big scary number, rather than being upfront about the real cost to taxpayers. It is likely that compared to the costs of living long and healthy, the costs of obesity to the public purse are not disproportionately large.

Ring-fencing the revenue of sugar taxes is a poor justification

Sugar taxes should not be introduced with the expectation that the revenue gathered could be used to fund health-promoting programmes, or any other "worthy" initiatives. If the purpose of the tax is to discourage consumption of the taxed product, then if successful, advocates should hope that the tax will not raise a lot of revenue.

If the point of the tax is to raise funds for worthy health promotion programmes or other public service projects, it is not clear why these cannot be funded by the government's existing budget or by raising the existing taxes.

Evidence that a sugar tax will work is necessary, but not sufficient A sugar tax is likely to be regressive, it is not supported by an evidence base, might not address the costliest fiscal problems, and won't raise money for other health programmes if successful. While a strong evidence base is necessary for any new policy, it is not a sufficient justification for introducing one. Any policy also needs to be scrutinised on a philosophical basis: sugar taxes are a blunt policy tool that affects the entire population: is this an acceptable reason for overriding personal liberty? Some people might roll their eyes at the idea of liberty.But for anyone who takes pleasure in cutting into a chocolate lava cake, who enjoys a soda on a hot day, or would just plain rather be fat and happy than skinny and miserable, those benefits matter. If sugar tax advocates ignore the benefits of consuming these products, they ignore the very reason people might not act the way advocates want them to.

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