A sugar sweetened beverage (SSB) tax has been shown to be effective in reducing consumption of SSBs and increasing government revenue, but the fairness of such a policy should also be considered. We assess the cost-effectiveness of a SSB tax of 20% for Australia with explicit inclusion of equity through the distribution of health gains and the financial impacts by socioeconomic position (SEP) subgroup.
Cohort models were used for each Socio-Economic Indexes for Areas (SEIFA) quintile to estimate the impact of the tax on body mass index (BMI) for the 2010 Australian population. The health-adjusted life years (HALYs) and health care costs averted were estimated as a result of the changes in BMI resulting from the predicted decrease in SSB consumption, taking into account the diseases that have a demonstrated significant contribution to risk of excess weight. SEP specific inputs included baseline BMI and SSB intake, price elasticities, incidence and prevalence of disease and mortality. We also estimated quintile specific changes in expenditure on SSB, tax burden and tax revenue raised.
Application of a 20% SSB tax across the Australian population will lead to improvements in HALYs and considerable health care cost savings across the Australian population, with the greatest gains in the lowest SEP group. We estimate the increase in annual expenditure on SSBs to be around $4 higher in the lowest quintile compared to the highest (around $11 compared to $7). Total tax revenue resulting from this policy is estimated to be $610m.
A SSB tax can bring substantial health and health care cost savings, especially to those in the lowest SEP group. The tax revenue could potentially fund interventions that further reduce rates of obesity and or reduce the obesity disparities between SEP groups.