Venu Menon
Wellington, February 2,2024
New Zealand is lagging behind its Pacific neighbours in introducing excise taxes on unhealthy foods or their producers, an expert panel has noted.
Taxes on sugary drinks are commonly used by over 100 countries as a tool to prevent obesity and other lifestyle disorders.
Pacific countries
Sugary drinks tax policies have been in vogue across the Pacific for over two decades, according to a report in The Briefing, a flagship publication of the Public Health Communication Centre (PHCC), an independent organisation hosted by the Department of Public Health at the University of Otago.
Several of the countries in the Pacific region have tax policies on sugary drinks and other unhealthy foods.
Unhealthy imported and locally-made foods are taxed in French Polynesia, Tonga, Samoa and Vanuatu.
New Caledonia passed an excise tax in November 2023 which targets unhealthy foods, including sugary soft drinks, ice-creams, confectionery, chocolates, sauces, cereals, biscuits, bakery and pastry items.
According to the report, the tax is applied as per the sugar content and starts at FPF40/Kg (NZ 0.60/Kg) for 5-9% sugar, with the highest level of FPF 85/Kg (NZ$1.27/Kg) for foods with 40+ %sugar.
Evidence shows the excise taxes are having an impact on the consumption of unhealthy food products in those countries, the report says.
Tonga, for example, has reported a fall in imports of sugary drinks, with an accompanying surge in water bottling and reduced spending on soft drinks among low-income households.
Health benefits
Taxing unhealthy food and drinks have health benefits. Lower consumption of unhealthy foods reduces chronic disease, the report says.
For example, American Samoa has seen 28.5 additional Quality Adjusted Life years per 1000 people over their lifetime.
A tax on sugary drinks also improves health equity. Low income households tend to move away from high-priced food products, the report points out.
The World Health Organisation (WHO) also recommends fiscal policies such as taxes on sugary drinks and other unhealthy food products.
Health and finance
Cost and equity are integral to nutrition promoting taxes. Pacific Island countries have taken note of the impact of the food environment on chronic disease, and have declared a “non-communicable disease (NCD)” crisis.
The food environment contributes to growing rates of NCD such as diabetes, cancer, and tooth decay.
But taxes on sugary drinks and other unhealthy foods must be coupled with investments in areas that promote a healthy food environment.
In New Zealand, this might include extending funding for Ka Ora Ka Ako, the free healthy school lunches programme, or funding free dental care for those aged 18 and over, subsidising and improving access to fruits and vegetables in deprived communities and increasing family income or benefit levels so “families with the lowest incomes can more easily afford healthy food,” the report notes, and adds that 64% of New Zealanders support sugary drinks tax “if the revenue was used to improve the availability and affordability of healthy food.”
The linkage between tax revenue and awareness creation is visible in the Pacific Islands countries. For instance, New Caledonia has used health tax revenue to ward off the dangers associated with the consumption of sugary products. American Samoa and the Marshall Islands are funding education with health tax revenue, while French Polynesia has pledged the money to health promotion campaigns.
The report concludes that New Zealand should emulate its Pacific neighbours and “more than a hundred other countries who are using these tools to protect the health of their populations and save health system costs.
“Using the taxes to support NCD prevention strategies, would maximise health benefits.”
Venu Menon is an Indian Newslink reporter based in Wellington
