Joining us at this year’s National Eating Disorders and Obesity Conference conference is Dr Lina Hua, Surgical Registrar (unaccredited) at SA Health who will present on ‘Obesity and Sugar – A Taxing Issue’.

1.3 million Australians are affected with Type II diabetes. Adverse health consequences from obesity related diabetes costs the Australian taxpayer $12 billion annually.

Recognising the association between sugar and obesity, various jurisdictions have imposed taxes on soft drinks containing sugar. Although well intentioned, the impact on consumption may be small since the price increase is modest. Additionally, it raises the drink cost for groups least likely to afford it and is likely to disproportionately impact the most socially disadvantaged.

This proposal uses the tax system to directly affect and incentivise businesses to reduce the promotion of soft drinks rich in sugar. Secondary affects would be a change in consumer behaviour.

Two changes are proposed to the taxation of the advertising budget of soft drink manufacturers:

1. That advertising and promotional expenditure is not tax deductible for manufacturers of soft drinks. This denial of deductibility would be applied in the same proportion as the revenue the company earns from the sale of non-sugar sweetened drinks. The greater proportion of low sugar products sold, the greater the deductibility. Thus, the policy is “Outcomes Focussed”, providing a strong incentive to the company to achieve a desirable social outcome.

2. The imposition of a tax equal to the size of the advertising budget. This would vary down in direct proportion to the value of non-sugar sweetened products sold. Potentially reducing to zero in the case of all revenue coming from non-sugar sweetened drinks.

Potential Outcomes:
Product mix revenue is based on sales from the prior tax year, but the deduction and (potential) tax penalty occurs in the current year. This provides a potent incentive for manufacturers to produce and promote low sugar alternatives and rewards them for doing so. This tax change is potentially a revenue neutral social policy.

Key Learnings:
1. Using the tax system to incentivise businesses to reduce the promotion of sugar rich soft drinks.
2. Encourage, via monetary benefits, for businesses to promote and develop low sugar soft drinks.
3. Influence a change in consumer behaviour towards choosing low sugar soft drinks.


Lina is a working as a surgical registrar in South Australia with interests in general surgery, medical education, and health advocacy.

For more information on the upcoming 2018 National Eating Disorders and Obesity Conference and to register your place please visit




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