Dissenting Report by Coalition members of the Committee

Introduction

1.1The Coalition members of the Standing Committee on Health, Aged Care and Sport propose this Dissenting Report in response to the Inquiry into Diabetes Final Report.

1.2Coalition members of the Committee are grateful to the Chair, Dr Mike Freelander MP, for his management of this inquiry. Dr Freelander’s professionalism in conducting the inquiry, his deep passion on the issue of diabetes and his expertise developed over years as a health practitioner is noted and appreciated.

Recommendations

1.3With the exception of one recommendation, Coalition members of the Committee agree with the recommendations of this report. Of particular note are the recommendations regarding diabetes impact analysis, increased screening, development of a best practice framework to tackle obesogenic environments in coordination with State and Territory Governments and broader public awareness and promotion of healthy lifestyle choices.

1.4Coalition members of the Committee also agree that equitable access to health care for people living with all forms of diabetes be considered as detailed in recommendation 12.

1.5We strongly support a review into the limits for accessing juvenile mental health and diabetes services, with a view to enabling young people to continue receiving support for longer.

1.6Coalition members of the Committee concur that subsidised access to Continuous Glucose Monitors (CGMs) should be further expanded as outlined in recommendation 15. Having established the Continuous Glucose Monitoring Scheme in 2017 and committing to further expanding the scheme in the previous government, Coalition members of the Committee support the need for continued and increased support for those living with diabetes.

1.7Furthermore, Coalition members of the Committee agree with the need to investigate measures to lower the cost of treatment of diabetes as was recommended in multiple submissions and expanded on by various witnesses through the course of the inquiry.

1.8Coalition Committee members also agree with the recommendation 19 regarding mechanisms for priority access to GLP-1 receptor agonists for disadvantaged and remote communities of high need including Aboriginal and Torres Strait Islander communities.

Disagreement with Recommendation 4

1.9Whilst there are many points of concurrence with the recommendations in the Committee’s report, Coalition members of the Committee disagree with recommendation 4 in the Committee’s report.

1.10Recommendation 4 is a new tax proposal and comes in the midst of a cost of living crisis. The recommendation calls for an increase by way of a levy on the cost of sugar-sweetened beverages (SSBs) with graduation according to the sugar content.

1.11We believe the case for a sugar tax at this time is not made out.

1.12When considering the case for and against a sugar tax as proposed, Coalition members of the Committee examined evidence provided at this inquiry, previous inquiries and related studies. While not discounting the evidence base surrounding the link between SSBs and contribution to obesity and obesity-related conditions such as Type 2 diabetes, we are not convinced that a tax on SSBs would be an effective or targeted measure or that it could be implemented without disproportionate impact on the community.

1.13The regressive nature of a tax on SSBs weighs heavily against the proposal. This was the position of Labor senators when arguing against an SSB levy as part of the 2018 Senate Select Committee into the Obesity Epidemic in Australia inquiry.[1]In their Dissenting Report Labor senators stated “Labor Senators are particularly concerned that an Australian SSB would likely be regressive, meaning that it would impact lower-income households disproportionately.”[2]

1.14In addressing the question of a sugar tax at that 2018 inquiry, the Grattan Institute noted “Low-income households spend a higher proportion of their disposable income on drinks (but less in absolute terms), so an SSB tax will likely be regressive – they will pay a higher proportion of their income in tax ... Modelling of the suggested sugar content tax (at the rate of 40 cents per 100 grams) indicates the financial burden is modest because spending on beverages accounts for a small share of household income ... but will be slightly higher for people from lower socio-economic areas, meaning lower socioeconomic households will pay a higher proportion of their disposable income in tax. A recent analysis of SSB tax studies also found that an SSB tax will likely result in a slightly larger tax burden for lower socioeconomic groups (in dollar terms).”[3]

1.15Coalition members also draw attention to observations of the Mayor of Alice Springs, one of the most disadvantaged communities in Australia, who told the committee that he thought that sugar tax would be ineffective:

My gut tells me it won't work. You're just targeting the most disadvantaged people anyway who are going to use it. If you go into a remote community, it's already so high for a can of Coke now. Will people still buy it? I think the answer is yes. We've got a floor price on our alcohol in Alice Springs, so it means that a minimum standard drink is a certain price. Some would say that's worked to a certain extent, but we're still having alcohol issues. So I don't know if adding a sugar tax is necessarily going to address all of those or if it's just targeting the most disadvantaged as well.[4]

1.16The National Retail Association notes in their submission to this inquiry[5] that there is, by way of the Goods and Services Tax (GST), an existing tax applied to discretionary foods such as confectionary, carbonated drinks, biscuits, ice cream, and restaurant or takeaway foods. The GST, it should be noted, does not apply to a range of products such as fresh fruit, vegetables, fish and bottled water.

1.17In their submission to the inquiry the Australian Beverages Council notes analysis of the UK’s Soft Drink Industry Levy (SDIL) which found that it “incentivised many manufacturers to reduce sugar in soft drinks. Some of the cost of the levy to manufacturers and importers was passed on to consumers as higher prices but not always on targeted drinks.”[6] It is highly speculative that a tax on SSBs would have a tangible impact on consumer behaviour and instead have a flow on impact to the consumer.

1.18Finally, the economic equity case for a tax on SSBs is not supported by data produced by the Parliamentary Budget Office (PBO). The PBO this year found that the proposal for a sugar tax on SSBs at 20 per cent would cost Australians $1.4 billion over the 2023-24 Budget forward estimates period. The same PBO analysis also showed that the lowest income quintile spends vastly more, as a percentage of gross income, on SSBs.[7]

1.19Coalition members of the Committee hold concerns that with a cost of living crisis, which shows no signs of abating, a proposal for a new tax applied to SSBs would hit hardest those who can afford it the least.

1.20Coalition members recommend that the Australian Government oppose a levy on sugar sweetened beverages at this time.

Mr Julian Leeser MP

Mrs Melissa McIntosh MP

Ms Jenny Ware MP

Hon Mark Coulton MP

Footnotes

[1]Page 91, Final report from the Select Committee into the Obesity Epidemic in Australia, December 2018

[2]Page 1, Labor Senators' Dissenting Report to the Final Report from the Senate Select Committee into the Obesity epidemic in Australia

[3]Senate Select Committee into the Obesity Epidemic in Australia, The Grattan Institute, Submission 50, p. 8

[4]Mr Matt Paterson, Mayor, Alice Springs Town Council, Committee Hansard, Alice Springs, 6 March 2024, p. 5

[5]Page 17, National Retail Association submission to the Standing Committee on Health, Aged Care and Sport’s inquiry into Diabetes

[6]Peter Scarborough, et al. (Impact of the announcement and implementation of the UK Soft Drinks Industry Levy on sugar content, price, product size and number of available soft drinks in the UK, 2015-19) February 11, 2020

[7]Parliamentary Budget Office analysis, a 20% tax on sugar sweetened beverages, 27 March 2024