Young Australian adults are nearly twice as likely to be obese as their parents and one in five children are now overweight before they start school, a report has found.

The rates of obesity in Australia were damning, Jane Martin from the Obesity Policy Coalition said. She said a tax on sweetened drinks, including soft drinks, must be part of a national action plan, because physical activity guidelines would not solve the problem.

“We are in a very privileged position in Australia, we have got a strong economy but it will be undone by this public health problem,” Martin warned.

“When you have 71% of men overweight or obese, when you have severe obesity doubling in the last 20 years, that’s a serious problem and it’s going to take some time to slow down, let alone turn around,” she said.

Malcolm Turnbull rejected calls for a sugar tax earlier this year, saying Australia had enough taxes and was “better off focusing on the health message”.

Data released by the Australian Institute of Health and Welfare on Friday showed nearly two in three Australian adults were overweight or obese in 2014-15, up from 57% in 1995.

Severe obesity increased from 19% to 28% over the same period and people were becoming overweight or obese at younger ages.

The AIHW report found 15% of people born in the mid-1990s were obese at age 18 to 21.

“This is almost double the proportion of obese 18- to 21-year-olds who were born two decades earlier,” AIHW spokeswoman Lynelle Moon said.

A similar pattern was observed for very young children born in the early 2010s. About 9% of the children born in that period were obese by the time they were aged two to five. Of children born in the early 1990s, only 4% were labelled obese.

After smoking, obesity was the leading cause of disease in Australia and required an urgent policy response from the federal government, Martin said.

“We don’t have a national obesity strategy and we should be looking at a health levy on sugary drinks in particular,” she said. “We also need to protect children from unhealthy food marketing.”

This week the health minister, Greg Hunt, released the first national physical activity guidelines for infants, which recommended that children should spend at least one hour on energetic play every day.

But Martin said obesity was caused by diet.

“This issue really needs to be addressed through the food environment because it’s driven mostly by poor diet.

“What’s driving poor diets is the promotion of highly processed food, the price of these foods are very cheap and they are very available. Around 40% of the energy in our diets is coming from unhealthy foods,” she said.