Labour sugar tax policy inadequate according to health throughers

Sally Hughes, public health strategic adviser for the Heart Foundation, said one thing missing was a tax on soft drinks. While she did not believe a broad-sweeping sugar tax was workable, it was easy to apply to soft drinks.

That was backed by Nutrition Foundation dietitian Sarah Hanrahan, who said a sugar tax on soft drinks would happen eventually as evidence came in from countries such as Mexico that it worked.

Mrs King has ruled out a broad sugar tax, saying it was too complex. She said fizzy drinks would not be covered under the sugar reduction policy for food, however she did not say whether Labour was considering further policy for them.

Of course the whole thing is unworkable and absurd.   A sugar tax that applies to cereals and yoghurt, but not candy, soft drinks and ice cream.  

And the elephant in the room:  no tax on sugar itself.  Or maple syrup, fructose, honey or other more or less pure sugar substance.

How can you tax things that contain it, but not the substances themselves?

And why zero in on soft drinks and not fruit juices and fruit drinks?

Because it is unworkable.  That’s why.

There is no logic that can be consistently applied.   So we are staring down some kind of Statutory Body that decides what to tax and what not.  And that is a per product decision, as simply saying “yoghurt” isn’t good enough.

Next, all businesses need a major overhaul in their systems.  They now need to be able to track variable tax rates depending on which product is in and which is out.   Cadbury may have to pay sugar tax on 5% of its product line, but Auntie Mabel who sells fudge at the local Farmers Market may find most of her products are included.   Of course, Auntie Mabel will need to get a government sugar tax inspector to come in and make declarations as to what is sugar taxable, and what isn’t.

Taxes have to be recorded, reported and collected.   There will be a need for retailers, shops, professional sellers on TradeMe to apply sugar tax to some of the items they sell, and not others.  This needs to be captured, somehow.  This will lead to accounting systems changes across the board.

It’s all madness.

It is unworkable.

The only way to tax sugar is to tax sugar at the source.  That way the cost rolls up into all the products where it is used.

The problem with that is that is that the penalty of having sugar in a product is disproportionate to the alleged harm it causes.  Why?   Because of serving sizes.   Peanut butter may contain a lot of sugar per 100 grams, but who the hell eats 100 grams of peanut butter when compared to, say, 100g of fizzy drink?

The whole of Labour’s sugar tax proposal is unworkable, a mess, would create a huge need for production, accounting and other software systems to be updated (let’s not even talk about importing ingredients containing sugar that are not raw – let’s say orange juice concentrate) and the whole thing is a monumental clusterwhatsit.

If, and it is a big if, government wants to provide incentives for better food selection through artificially increasing the prices of foods that are deemed to be bad, it needs to find a way to do so by inserting the tax at the lowest level possible.   And even that’s not perfect.

Which is why taxation is the wrong tool altogether.


– Claire Trevett, NZ Herald

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