It's time for sweetest tax of them all

Never before has a tax been such an instant success. I am talking about what happened in Britain last Friday. That’s when new so-called sugar tax sprung into life, with much of its work already done.

The whole idea was to cut the consumption of sugar, something we have just as much need to do here, given that our rates of obesity are on a par with those in Britain - an outrage that will prevent many of us living long lives.

Up to one third of us are obese, another third are overweight. Thirty years ago it was 10 per cent. If you don’t think that’s shortening lives, ask my colleague, Peter FitzSimons. He says everyone he sees aged over 75 is thin. Their heavier contemporaries are dead.

Announcing the sugar tax in the 2016 budget, Britain’s (Conservative) Treasurer George Osborne said five-year-olds were consuming their entire body weight in sugar every year.

A single can of cola has nine teaspoons of sugar in it. Other drinks have 13 teaspoons - more than double the recommended daily intake.

“I am not prepared to look back at my time here in this parliament doing this job, and say to my children’s generation: 'I’m sorry, we knew there was a problem with sugary drinks, we knew it caused disease, but we ducked,'” he said.

His tax was clever. It was to apply only to soft drinks, and it wouldn’t apply for two years, until 2018. It would be set at three different rates.

The rate would be zero for drinks with 5 grams or less of sugar per 100 millilitres, meaning some would stay tax-free, including Schweppes Lemonade, Tesco Lemonade and Lucozade Sport. It’d be heavier for drinks with between 5 and 8 grams of sugar. Among them were Fanta, Sprite and Dr Pepper. And it would be high for drinks with more than 8 grams, such as Coke, Pepsi and Red Bull.

His hope was that the drinks above each threshold would cut their sugar until they were below it. It’d cut their tax from 24 pence per litre to 18 pence, or from 18 pence to nothing. They had two years in which to do it.

Within months, Tesco said it would reformulate its entire range to escape the levy. Lucozade Ribena followed, also for its entire range. It meant halving the high sugar contents of Lucozade and Ribena.

Then Sprite halved its sugar content, Fanta fell from grams 7 to 4.5, and 7 Up from a scary 11 grams to 7 grams.

By the time the tax arrived last week, Britain had more than halved its initial estimate of what the tax would raise, cutting its estimate for takings in the first year from £520 million to £240 million ($439.6 million to $952.5 million).

The government-owned Behavioural Insights Team reckons around 750 million litres of drink has been reformatted, which would save a welcome 30,000 tonnes of sugar per year, all before day one.

There’ll be more change now the tax is in place. Retailers will more prominently display the cheaper drinks that are lower-taxed, producers will shift their marketing to products they are able to sell for less, and customers comparing prices will be more likely to pick the cheap ones. More manufacturers will cut their sugar content as a result, and even those that don’t will sell increasing amounts of their zero-sugar products and less of those with sugar.

After a while, the sugar tax might raise very little. Which was the idea. The universal truth about tax is that people don’t like paying it. It can be put to good use.

Australia did it with petrol. From 1994 we more heavily taxed leaded petrol, pushing up the price by 2 cents per litre to encourage drivers to switch to unleaded. We do it with tobacco, and, imperfectly, with alcohol.

What’s great about so-called sin taxes (or "Pigovian taxes") is the double pay-off. Taxing more the things we want less of, including things that kill people, allows us to tax less the things we want more of, such as jobs, income and savings.

Julia Gillard did it big-time in 2012. Her carbon tax raised $14 billion. She used it to pay out$14 million in income tax cuts, grants to industries and increases in pensions and benefits. By taxing "bads", she was able to cut taxes on "goods".

Electricity emissions slid during those two years, then climbed again after the tax was axed.

Prime Minister Malcolm Turnbull gets the idea, at least in theory. He said so during the last election.

“All of us know that if you want to have less of something, you increase the tax on it,” he said, complaining about Labor’s plan to boost the capital gains tax. “That is how health organisations justify and urge governments, as we are doing, to increase the tax on tobacco. Labor clearly wants to have less investment.”

What about less obesity? If we designed our sugar tax like Britain’s, we could cut consumption from the day it came in. And we could use what we raised to fight obesity in other ways, or to help cut income tax.

We would be joining 30 or so countries already doing it. The Grattan Institute says our sugar industry would barely suffer. It exports most of what it makes, and it would export more if it sold less here, without much further depressing the global price.

It’d be popular too, if you believe the opinion polls. And it might actually do some good.

In The Age and Sydney Morning Herald

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Sugar's tobacco moment as voters call for new tax

Imagine a tax that Coalition voters actually wanted. They certainly don't want more income tax (only 12 per cent do, according to an Essential poll), they certainly don't want more company tax (they want less) and they will cop an increase in GST only if it brings down other taxes.

But then there is sugar. This week's Essential poll reveals the sort of disdain for sugar there is for tobacco.

An extraordinary 57 per cent of Liberal and National Party supporters say they want a special tax on sugar-sweetened drinks. That's more than the 54 per cent of Labor voters that want it.

It is sugar's tobacco moment. When the tobacco question was asked two years ago a massive 70 per cent of Coalition voters wanted higher taxes on it along with 67 per cent of Labor voters. For both tobacco and sugar, it's the university-educated Coalition voters who want the higher taxes the most.

What has sugar done to get lumped in with perhaps the most despised legal substance on the planet?

Nothing it hasn't been doing for decades. It is just that it is doing more of it and we are learning more about what it is. The industry would like us to believe that obesity and the tragic diseases that follow are simply a matter of "energy in and energy out". Those are the words it uses.

Put less into your mouth, do more exercise, and you won't get as heavy.

Here's Geoff Parker, chief executive of the Australian Beverages Council: "All kilojoules matter, it doesn't matter where those kilojoules come from."

It is what I call the "federal budget" approach to maintaining weight. If only the government spent less and taxed more it would bring down the deficit. It sounds true only because it ignores feedback loops.

When countries such as Spain and Italy imposed austerity programs after the financial crisis, they did indeed cut spending, but they also plunged their economies into deeper recession, losing even more revenue.

Sugar sets off the same sort of feedback loop.

It is true that heavy people eat more than others and exercise less, but the causation is not all one way.

It is easiest to see in children. They eat more during growth spurts, but it is not right to say their growth spurts are caused by the extra eating. It is truer to say that whatever it is that brings on their growth spurts does it by bringing on their extra eating.

Here's another example. Someone with an aggressive tumour will eat more in its early stages. That is because the tumour grabs the incoming nutrition for itself, making the host heavier but weaker and hungry for more food. It is as true to say that the extra weight brings on the extra eating as it is that the extra eating brings on the extra weight.

For sugar, the budget analogy misses the point. The point is that our bodies respond to sugar with insulin.

Rosalyn Yalow won the 1977 Nobel Prize for tracking what insulin does. When it is released, our fat cells start to pack in fuel in the form of fatty acids, and close their walls to prevent them escaping. It is why, bizarrely, we often feel weak or hungry after taking in sugar. The energy we expect to get is rendered inaccessible until the insulin dissipates.

And so we are likely to take in more sugar, triggering another flood of insulin, and so on. If we are especially unlucky, the repeated floods of insulin build up our resistance and encourage our bodies to produce more and more insulin until they exhaust their capacity, meaning we need to take it intravenously.

It is worst for refined, dissolved sugar. It is relatively new in terms of human biology and it hits our bodies instantly, which is why soft drinks are being taxed on a worldwide scale not seen since cigarettes.

Twenty-six countries including Mexico, Portugal and Thailand already have in place a punitive tax on soft drinks. Five more will put one in place by April, including Britain.

Introducing the the legislation in 2016, Conservative chancellor George Osborne warned that within a generation, half of all boys and 70 per cent of girls would be overweight or obese.

"I am not prepared to look back at my time here in this parliament, doing this job and say to my children's generation: 'I am sorry, we knew there was a problem with sugared drinks, we knew it caused disease, but we ducked'," he said.

The British tax is ingenious. It will apply at two different rates. Drinks with less than 5 per cent sugar won't face it at all. There is a pay-off for getting concentrations below 5 per cent. Schweppes lemonade has already done it.

In Mexico, sales of sugared drinks dropped by 5.5 per cent in the first year and then 9.7 per cent. In Berkeley, California, which imposed a city-wide tax, sales dived 9.6 per cent.

Our Prime Minister is on record as saying: "if you want to have less of something, you increase the tax on it". His side of politics wants him to do just that.

In The Age and Sydney Morning Herald

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Ditching sugar is a new year diet that might actually work

This year you're going to lose weight. Really. Not like last year, when you tried to eat less and exercise more and ended up no lighter, but by approaching the problem differently. Because calories in and calories out is probably the worst way to think about it.

Here's another one.

Excluding waste and sweating, it's true that the calories we take in have to be turned into either energy or weight. So it ought to be true that taking in less will cut weight. But what usually happens first is that we get hungry (and add back the calories, leaving our weight unchanged) or lethargic (expending less energy so that more of what we take in is directed to maintaining our weight).

It's almost as if our weight wants to be maintained; as if it has a will of its own and manipulates the rest of us to get what it wants.

Which is probably what happens.

Tumours act as if they have minds of their own. They press-gang whatever they can find into making themselves grow. Children do it. During growth spurts their growth hormones direct whatever's coming in to building bones and muscles, leaving the rest of the body bereft or hungry.

Only in a trivial sense is it true to say that children grow because they eat more. They eat more because they are growing. And that growth is regulated by hormones.

In 1977 Rosalyn Yalow won the Nobel Prize for tracking the hormone insulin. When it's released, fat cells start packing in fatty acids. And they also close the exits so the fatty acids can't escape while the insulin is there. It's why, oddly, we often feel weak or hungry after having sugar. The energy we thought we'd get isn't accessible. So we want to eat more, which also gets tucked into fat cells if there's insulin around; which there will be if what we've eaten is rich in sugar or other carbohydrates.

Veteran science journalist Gary Taubes has just set out his findings in a book entitled The Case Against Sugar, which follows Why We Get Fat, and Good Calories, Bad Calories. He is more of a forensic examiner of evidence than he is a purveyor of diets, and his main finding is that much of the evidence has been buried.

He says in the 1960s it was fairly widely accepted that carbohydrates (especially sugar) boosted the production of fat and increased appetites. It's one of the reasons we use bread as a starter at meals; it prepares us to eat.

Fat, by contrast, doesn't bring on the production of insulin at all. It may eventually be stored in fat cells, but it doesn't make those cells pack fat in and prevent them letting fat out. It's one of the reasons it rarely makes us hungry. Try eating half a slab of butter and see whether it boosts your appetite.

But in the 1970s, in the United States and in Australia, where our dietary guidelines follow the US, a new more plausible theory took hold. It was that fat causes fat. Nutritionist Ancel Keys laid it out in the massive Seven Countries Study which compared nations including the US, Finland and Japan and concluded that the nations that ate the most fat suffered the most heart disease.

Later research concluded that the results derived were particular to the seven countries chosen. Had Keys chosen other countries, such as France and Switzerland with high rates of fat consumption and low rates of heart disease, the correlation would have disappeared. But by then an abhorrence of fat had been written into the guidelines.

Consuming less fat meant consuming more carbohydrates, especially sugar which improves the taste of low-fat foods. So obesity climbed. The University of Sydney's Charles Perkins Centre is one of the few that disputes the connection. It produced a paper defending sugar that later had to be corrected after economist Rory Robertson ripped into it for misuse of statistics. Columnist Peter Fitzsimons details links between sugar and those dietitians promoting sugar in his book The Great Aussie Bloke Slimdown.

Just last month an industry-funded paper purporting to defend sugar fell apart when one of the funders, Mars Inc, disassociated itself saying it made all industry-funded research look bad.

Naturally, I am unable to guarantee that giving up sugar will make you lose weight. But I can guarantee that if you are anything like me it'll make you less hungry. I ditched sugar several new year's days ago, lost weight, and never got it back.

In The Age and Sydney Morning Herald

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Hockey is wrong. It's time to tax soft drinks

The last civil exchange I had with Joe Hockey on Twitter was about soft drinks.

I had noticed that Mexico had just imposed a special tax on sugared drinks and asked the newly installed treasurer whether he would think of introducing one here.

He replied: "Why is your default more tax or more regulations to 'control' individual behaviour? How about the idea of personal responsibility?"

Two years earlier, he had had four-fifths of his stomach removed because he had been unable to control what he ate.

Personal responsibility is easy to speak about, hard to practise.

Sugar is one of the reasons.

It's not only turned into fat, but by manipulating the hormones insulin and leptin, it can turn off the feeling of being full. Dissolved sugar, in the form of soft drinks is far more damaging than sugar that's locked away in the fibres of fruit. It's instantly absorbed, and almost instantly makes us hungry again, dulling the receptors for the hormones that make us feel full.

One of the worst myths ever promoted by an industry association is that all we need is self-control. It's just a matter of counting calories. "All kilojoules matter, it doesn't matter where those kilojoules come from," is how the Beverages Council puts it. But some of those kilojoules drive hunger itself, making the very idea of self-control an exquisitely cruel joke.

Which is why Mexico taxed soft drinks. The investment bank Credit Suisse describes what's coming as sugar's "tobacco moment".

It says in the US the healthcare costs linked to type 2 diabetes amount to $US140 billion. The costs linked to tobacco are $US90 billion.

"If the sole objective is to reduce the consumption of full-calorie soft drinks, one does not need to reinvent the wheel," it says. "Tobacco and alcohol provide relevant test cases, and unequivocally show that, in both cases, taxation has been able to affect consumption on the downside."

Now Britain is following Mexico, treading where Hockey wouldn't.

Its treasurer, George Osborne, is part of a Conservative government that instinctively shares Hockey's reluctance to tax and regulate. Yet in his March 18 budget speech he overcame that reluctance to do what he could to turn the tide of obesity.

"You cannot have a long-term plan for the country unless you have a long-term plan for our children's healthcare," he told Parliament. "Experts predict that within a generation over half of all boys, and 70 per cent of girls, could be overweight or obese.

"I am not prepared to look back at my time here in this Parliament, doing this job and say to my children's generation: 'I'm sorry, we knew there was a problem with sugared drinks, we knew it caused disease, but we ducked the difficult decisions and we did nothing'."

From 2018 he'll tax sugared soft drinks at two rates: a high rate for drinks with more than 8 grams of sugar per 100ml, and a low rate for drinks with between 5 grams and 8 grams. Drinks with less than 5 grams won't face the tax.

He is delaying the start until 2018 to give the manufacturers time to reformulate their products. Some, such as Schweppes lemonade, are already below 5 grams and won't face the tax. Others, such as Sprite, are above it, but could be brought down to avoid the tax. Lucozade is just above 8 and could be brought below it to escape the highest tax. Pepsi and Red Bull contain an astounding 11 grams and will be harder to reformulate. But the manufacturers are likely to do what they can.

Should the tax be passed on to consumers? In Mexico sales of sugared soft drinks slid 6 per cent within a year. The UK Behavioural Insights team, Britain's "nudge unit", says just as important will be the signalling effect of the tax, the message it sends that sugared drinks are bad for your health and that there are alternatives.

There's every reason to believe it would work here. When Australia taxed unleaded petrol at a different rate to super, consumers switched. When we taxed carbon emissions, electricity providers switched. Prime Minister Turnbull gets it. "If you want people to do less of something, put up the tax on it," he is forever saying, usually in relation to something Labor is planning.

There's a chance we'll follow Britain, just as it might follow us on tobacco plain packaging. There's a chance we'll serve our children well.

@1petermartin why is your default more tax or more regs to "control" individual behaviour?
How about the idea of personal responsibility?

— Joe Hockey (@JoeHockey) January 5, 2014

In The Age and Sydney Morning Herald

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Sugar. It could be the real reason you can't lose weight

Let me guess. You're going to lose weight. Let me guess again. You won't succeed for long.

The standard approach, the one that almost always fails, is to treat weight as an exercise in accounting.

I call it the “federal budget” approach. If only the treasurer spent a little less money each month or took in a little more tax, the deficit would shrink. If only you or I took in a little less food each month or did a bit more exercise, our tummies would shrink.

It ought to be true because it's a truism: Energy in equals energy out plus weight gained. But the equation tells us nothing about the mechanism. Cutting your energy going in (by eating less) might just as easily cut your energy going out (by making you lethargic) as it would cut your weight. And even if it did cut your weight a few weeks later you might find yourself getting ravenously hungry and getting your weight back. It's what usually happens. It is why we keep making the same resolution each December 31.

What if there is something else - something not in the equation – which is driving all three parts of it, just as the broader economy drives the budget?

It's not exactly a far-fetched idea. We used to think that stomach ulcers were caused by stress, until in 2005 two Australian researchers were awarded the Nobel Prize for discovering the real cause – a bacterial infection.

We know that hormones trigger growth in children. During growth spurts they eat more and exercise less, but only in the trivial sense is it true that eating causes their growth. It would be just as true to say that growth causes their eating, more true to say that both are caused by something else.

Hormones drive the development of breast and buttock fat in women at puberty. They drive hunger during pregnancy.

Is it really so unlikely that they could also drive how much we eat, how much we exercise, and how much we store as fat?

We don't need to look far to find the hormones involved. Insulin, and its partner leptin, drive the packing and unpacking of fat cells and the signals that tell our brain it has had enough and is no longer hungry.

Each responds to sugar...

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And please don't tell me sugar is “a natural part of life” as the ads used to say. In his massively viewed YouTube lecture Sugar: The Bitter Truth, childhood obesity expert Robert Lustig makes the point that until relatively recently pure sugar was inaccessible, protected by either fibre (sugar cane is extraordinarily tough) or bees.

Ordinary sugar is half glucose and half fructose. There are around 16 packets in a 600 ml drink. The glucose triggers a surge of insulin that packs fatty acids into fat cells and temporarily prevents them getting out. It also directs glucose to muscles where it is stored as glycogen. The fructose helps build insulin resistance and also resistance to leptin, the chemical messenger that turns off the feeling of hunger. The greater our exposure to fructose the longer we feel hungry and the more insulin we produce, directing fat to our fat cells (fructose itself is turned into fat).

Lustig says Americans are producing twice the insulin they were 25 years ago.

None of this would matter much if it was merely making us big, but it is also driving high blood pressure, strokes and heart attacks. It's helping kill us.

Australia's soft drink industry is wrong when it says “all kilojoules matter, it doesn’t matter where those kilojoules come from”. Some drive hunger itself, making the “federal budget” approach of eating less and exercising more extraordinarily difficult.

Until recently the National Health and Medical Research Council was relatively unconcerned.

Its dietary guidelines advised that “a moderate amount of sugar in daily meals is not a problem”.

“In fact, spreading a little jam on wholemeal bread or sprinkling a little sugar to wholegrain breakfast cereal can make these nutritious foods more enjoyable to eat.”

Not now. The new guidelines issued in February for the first time tell Australians to limit their consumption of “foods and drinks containing added sugars such as confectionery, sugar-sweetened soft drinks and cordials, fruit drinks, vitamin waters, energy and sports drinks”.

In September the international investment bank Credit Suisse wrote to clients comparing sugar to tobacco. “There is not a single study showing that added sugar is good for you,” it said.

Credit Suisse says what worked for tobacco will work for sugar. Extra taxes on full-calorie soft drinks should quickly cut consumption; all the more so because unlike cigarette manufactures, soft drink makers already provide healthier alternatives.

But in Australia the sugar industry has one big advantage the tobacco industry didn't. Sugar is our second-biggest export crop. Its claws are everywhere, from Australian trade policy to the National Party to the nutrition industry. Until recently Sugar Australia was a corporate governor of Sydney University's Nutrition Research Foundation.

We are likely to be told repeatedly that the science isn't settled, that we need more research. And we are likely to keep remaking the same new years resolution.

In today's Sydney Morning Herald





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Never, ever, take dietary advice from the soft drink industry

It is reckless with the truth

Never take dietary advice from the soft drink industry.

Remember Coca Cola’s infamous 2009 “myth-busting” campaign featuring the actress Kerry Armstrong? It said it was it a myth that Coke made you fat, a myth that it rots your teeth, and a myth that it was packed with caffeine.

The Australian Competition and Consumer Commission made it publish corrective advertisements about all three. "Coke's messages were totally unacceptable, creating an impression which is likely to mislead that Coca-Cola cannot contribute to weight gain, obesity and tooth decay,” the Chairman said at time.

The industry is at it again. But this time the message is more dangerous, precisely because it sounds more believable.

Three leading health organisations - Diabetes Australia, the Heart Foundation and the Cancer Council - banded together this week to to run a television ad which shows the 16 teaspoons of sugar in a 600ml bottle congealing into fat as they enter a drinker’s body.

They want vending machines banned from schools, the sugar content cut, and the manufacturers to “stop promoting the message that high-kilojoule beverages are part of a healthy, balanced diet”.

I don’t like their chances. Appearing on ABC News 24 to respond the chief executive of the Australian Beverages Council Geoff Parker spoke instead of “getting people to understand the concept of the total diet”.

According to the Beverages Council, “all kilojoules matter, it doesn’t matter where those kilojoules come from.”

What matters is “energy in and energy out - what it really comes down to is that people will put on weight if they consume more kilojoules than they expend through physical activity”.

It’s simple, and it turns back clock on dietary science thirty years. It was indeed once thought that all fuels were much the same. It didn’t matter what you poured down your throat - if you poured in less you would get thin, if you exercised more you would burn it off and get thin.

It’s still definitionally true, but it tells us nothing about the way different types of fuel affect our compulsion to pour things down our throat and our ability to burn fuel off.

Carbohydrates - especially sugar - are special. Science journalist Gary Taubes outlines our emerging knowledge of them in his two latest books Good Calories, Bad Calories and Why We Get Fat.

Human beings grow because we secrete hormones. Insulin is one of them. Sugar fires up insulin.

Here’s what happens when we take in several teaspoons of sugar (there are 16 in a 600ml bottle)...

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Insulin and associated chemical messengers intercept whatever fat we are digesting before it gets to our bloodstream and stash it wherever they can, often pumping it into fat cells. At the same time the substances that allow fat to leave our fat cells get scarce. Fat gets locked in to the cells. It becomes temporarily unavailable. We feel weak and hungry. If we are unlucky we’ll reach for more sugar.

As Tabes puts it: “We don’t get fat because we overeat; we overeat because we’re getting fat.”

(Some of the sugar also gets directly turned into fat in our livers as the television ad indicates, but the more important effect is that insulin helps push other fat into our fat cells and temporarily prevents it getting out.)

As with most science there’s room for disagreement. The mechanism is more complicated than I have just described and it is not yet fully understood. But what is known - for certain - is that fuels ain’t fuels. Some fuels promote fat growth, hunger and sloth in a way others do not. They help determine whether it’s more energy in or more energy out.

Advising people to take care with “energy in and energy out” when your own product is making that difficult is particularly cruel, in my opinion.

And so too is parading misleading statistics (a bugbear of mine, I’ll admit). The Beverage Council says across all children the proportion of energy provided by soft drinks halved from 3.3 per cent in 1995 to 1.6 per cent in 2007.

It sourced that claim from a report that doesn’t make it. When I asked for the real source it provided another, an analysis that happens to have been funded by the Beverage Council itself, with extra funding to “write the manuscript by Coca Cola South Pacific”.

That report specifically says that two figures are not directly comparable. Among teenagers soft drink consumption climbs with age. The 1995 figure covers children aged up to 18 years, the 2007 figure only children up to 16 years.

The industry is reckless with the truth. It’s the last place you should turn for advice about your diet.

In today's Canberra Times, Sun Herald

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