Look at the illness, not the fantasy

18:56, Jun 25 2014

Should sugary drinks be taxed? It's certainly easy to see the case for doing so.

Studies suggest they increase the rate of diabetes, and that sugar-sweetened beverages are worse for diabetes than other drinks, calorie-for-calorie.

Diabetes is increasing in New Zealand and its treatment is demanding more resource from our public health budgets, so there is no doubt that reducing diabetes would save taxpayers money.

Further, it is clear that we can reduce the consumption of sugary drinks by taxation. Consumers react to higher prices by buying less - this works with New Zealand consumption data as well as when looking at the overseas implementation of similar taxes.

There is also good economic reasoning for such a tax.

Sugar-sweetened beverages create a cost for the public health system.


The person enjoying the drink and the companies profiting from it are creating costs that fall on everyone.

From this perspective taxing these drinks is just a case of "getting the prices right", and then letting individuals make their own choices.

However, there is a deeper fantasy at work driving public health campaigns: a fantasy of perfect bodies and perfect taxes.

The economic logic for sugar- sweetened beverage taxes is unassailable by itself. Some people are creating costs for other people and should be made to pay compensation.

Of course, we are always creating costs and benefits for other people.

When we tidy our front gardens our neighbours get some enjoyment.

Perhaps we could remove a portion of the tax on the petrol used in lawnmowers because it leads to neatly manicured berms?

The fantasy is that we can perfectly account for our community debits and credits. It relies on the notion that we have some sort of personal account where our community contributions can be set against our drawings.

The fantasy is that we can fine-tune our accounting, so that no one is overdrawn and no one has to over- contribute.

In reality, this fantasy ends up being mediated in some way through legislation.

When we recognise a form of consumption that creates significant and calculable costs, we respond with taxation or some other legal route (such as prohibition).

Tobacco and petroleum products are examples of taxed products. The products formerly known as "legal highs" are examples of prohibited ones.

This process of mediation is what prevents "silly" taxation policy - such as a tax break on petrol for lawnmowers.

For sugar-sweetened beverages, the device of mediation (where fantasy becomes law) should be in the areas where they have been rigorously implicated - diabetes and dental health being the most obvious.

These conditions by themselves justify the sorts of taxes proposed.

But a major focus of the calls from many "health" campaigners is the impact that taxing these drinks might have on the contested term "obesity".

The focus on obesity reveals the other public health fantasy: socially engineering perfect bodies.

There is no sense in attempting to tie a tax on sugar-sweetened beverages, or any food consumption, to obesity.

As a concept, obesity is extremely problematic for many reasons - body composition being the most commonly accepted one.

For example, Richie McCaw is obese by the standard of Body Mass Index (BMI).

If, for instance, we decided to tax sugar-sweetened beverages and had a subsequent reduction in diabetes and improvement in dental health, would the tax be judged unsuccessful if BMI didn't change?

In fact, diabetes and poor dental health affect people of all body sizes, who can all be healthier, regardless of BMI. But if a sugary drink tax collected enough healthcare funding to pay for diabetes and dental care, would public health campaigners still demand more just to make people slimmer?

What we must ponder is why public health campaigners and researchers feel the need to complicate a very simple relationship by dropping in the term obesity whenever possible, despite its longstanding logical and ideological problems.

Or, put differently: why are they so determined to define and control body mass when they could just target disease?

Dr Andrew Dickson is a lecturer from Massey University's School of Management and Dr Bill Kaye-Blake is principal economist at the New Zealand Institute of Economic Research.

The Dominion Post