New evidence has emerged which shows that Treasury were encouraging the Government to look at a series of much tougher anti-obesity moves than what were introduced last month.

A Treasury paper from December last year released under the Official Information Act addressed how to handle obesity in New Zealand.

It said it was hard to put a cost on obesity but an OECD study in 2010 had indicated that an obese person could cost the health system 30% more than a person of normal weight.

The paper cites a study that showed that that spending related to obesity in 2006 was equal to 4.5 percent of total health expenditure (or $686m).

“There are also a number of obesity-related costs that fall outside the health sector – for example, reduced productivity, inability to work, and reduced quality of life, which can lead to other social problems – although these costs are difficult to quantify.”

However Treasury was ready to point its finger at one industry in particular.

“Sugar-sweetened beverages (SSB) deliver little to no nutrition, are heavily marketed to children, contribute to poor diet and carry the risk of obesity, diabetes and other diseases, as well as poor dental health,” the paper says.

So it discusses a “sugar tax” on beverages.

“A SSB tax has the intended goal of changing the price of sugar-sweetened products and ultimately changing consumer behaviour.

Taxes on SSB have been introduced in a number of countries, including France, Mexico, Finland, Hungary and a number of US states.


“Some international evidence has shown these taxes to be effective in reducing consumption, for example, in France and Hungary “  

It then considers whether a sugar tax might work in New Zealand.

“ A SSB tax may be a viable option for New Zealand in principle, but further work would be required initially to ensure that a SSB tax is the most appropriate and effective policy lever to help reduce obesity rates and to determine that there is a strong rationale for targeting these products in particular through taxation.”

Treasury has not published any more of its advice to the Government beyond December last year but at an October 19 press conference to announce a new set of anti-obesity measures which did not include any taxation changes, Health Minister Jonathan Coleman referred only to the Mexican tax and said evidence so far was inconclusive as to whether it lowered consumption.

But Treasury may have hinted at one reason why a sugar tax was unpalatable to the Government.

It said one concern might be that the negative financial implications would be more significant for lower socio-economic.

POLITIK understands that food industry lobbyists made this point in submissions they made arguing against such a tax.

Treasury however took another view.


“This (a sugar tax)  this might also have a progressive impact on health outcomes given that there is a higher incidence of obesity-related disease within lower socio-economic groups and they generally consume more unhealthy foods.

Treasury says some opposition to a SSB tax could be expected from the beverage industry “and we have seen examples of this internationally.

This is something to be considered as part of further work on a SSB tax and this should involve working with and consulting industry.”

Treasury says other tax moves could include a saturated fat tax and the removal of GST on fruit and vegetables but “international evidence has shown these regulatory measures to be less effective and more complex to implement than a SSB tax.”

The paper also suggested that marketing to children has been clearly shown to influence parents’ and children’s food preferences and choices and also drove ‘pester power’ that could influence consumer behaviour.

“Currently, children in New Zealand are exposed to advertisements for many unhealthy snack foods, drinks and fast foods and 70 percent of advertising in children’s viewing times promotes unhealthy food products”.

It said regulations on advertising to children could n reduce exposure to, and therefore demand for, unhealthy foods.

“For example, a ban on television advertising directed at children in Poland was associated with reduced soft drinks sales.”

And Treasury also suggested making front of package labelling mandatory.

Currently it is voluntary in New Zealand.

“The system Cabinet agreed to in June (2014) is voluntary, so it may not be as effective as intended in influencing product reformulation and, subsequently, obesity rates,” it said.

But Government Ministers are defending the impact of the voluntary scheme.

More than 600 food products on New Zealand supermarket shelves are now displaying the Health Star Rating logo, according to Food Safety Minister Jo Goodhew who said in October that there was strong support from both private label and branded products.

“Over half the products on shelves with the Health Star Rating are supermarket-own brand products, which shows strong support from both manufacturers and retailers for this labelling system.

“This initiative is one of the ways we are working with the food industry to improve food labelling and make healthy choices easier for consumers.“

She said that members of the New Zealand Beverage Council had agreed to phase in the rating system as they updated their labels.

This would impact on more than 95 per cent of all juice and non-alcoholic beverages sold in New Zealand.

But despite this, it is clear from the treasury Paper that it was unconvinced a voluntary regime would work; that it favoured advertising restriction and that it had an open mind on a sugar tax.

The Government has subsequently rejected all of those ideas.