Fat Chance of Fat Tax

By Jim McVeagh 12/07/2010 3


Apparently there is a war on obesity. Trouble is, there does not seemed to be a well-defined enemy in this war. Is it the fast food industry? Perhaps it is the actual fat in foods? Maybe it is the obese person themselves? Or their wicked, neglectful parents? Or perhaps it is carbohydrates, not fats, that make you fat?

All this uncertainty make one thing completely certain. No government in the world is going to make any inroads on tackling the problem, regardless of how much of our money they want to throw at it. Politicians are a simple breed and need a simple target and plan. Unfortunately, the temptation to give politicians a simplistic answer is simply too great for some weight zealots.

Doctors in the UK are demanding action from their government. It seems as though they have settled on the enemy – junk food – and the method – tax. It also seems that their agenda involves the eventual banning of junk food (despite prohibition being a consistent failure). Sadly, I can predict that there will be little agreement amongst them as to what constitutes junk food. Remember, doctors are the people who told you that eggs (probably the most nutritious cheap food on the planet) were an evil collection of cholesterol that would kill you faster than Jack the Ripper. Expect only confusion and knee-jerk politics from this lobby-group.

Presumably this excitement from the UK has sparked a reciprocal shrill cry from anti-obesity groups in this country. Evidently there are a number of “experts” (in what?) who believe that the government is not doing enough.

Amazing. It seems that my weight problem is all Tony Ryall’s fault. And I thought it was something to do with the fact that pizza and beer is my favorite meal and that I get as much exercise as an arthritic sloth…

A health committee inquiry into obesity and type-2 diabetes in 2007 said the obesity epidemic threatened to overwhelm the health system without a concerted government-led response.

Recommendations included restrictions on advertising, improving health promotion and changing food labelling.

The National Government has ruled out a tax on fatty foods, or regulating food advertising.

So, if I understand the above correctly, changing food labeling and taxing fatty foods will make me thinner? Suddenly it is all clear to me now. My obesity has been caused by bad food labeling, not by “death by chocolate” desserts! With another government pamphlet in my hands, I could lose 10 kilos overnight! As long as I never see another KFC advert, I will morph into a svelte waif and live forever!

There has got to be a Tui advert in there somewhere.

Absurdly, all of these things have been tried by other governments, without a lot of success. There is absolutely zero evidence that any of them will work, with the exception of a tax on food. The problem here will be to decide which food to tax. Will you tax KFC (fried chicken) but not Nandos (grilled chicken)? Is the fat in a bag of potato chips any worse than the sugar in tomato sauce? Which is the worst part of my staple diet, pizza or beer?  Are you going to tax things made with butter but not things made with olive oil?

How will you handle the deleterious effect of such a tax on the poor? Obesity is especially prevalent in poorer households for multiple reasons, not the least being that more expensive, healthier food tend to be markedly less satisfying. Poorer families fill up on bread and fatty cuts of meat. A tax on these staples will see such families simply eat less of these – not more of expensive, healthier foods – often to the detriment of their overall nutrition. Attempting to mitigate this through subsidies will, of course, be entirely self-defeating, unless those subsidies are directed at the healthier foods. Unfortunately, this is a recipe for complex, ineffective government intervention (politicians like simple, remember) and unintended, but entirely predictable, consequences.

The central problem behind this conundrum of obesity is that neither fat nor carbohydrates are by any means bad for you. It is overconsumption of fat and carbohydrates that make you fat, not the food itself. As this is an entirely volitional problem, it is not something that a government can solve, even if it wanted to. Only a society as a whole, mainly by peer pressure, makes a difference to a person’s free choice.

While the banning of advertising, control of  labeling and restriction of use have all had some part to play in the reduction of smoking, none of this would have been achieved without a real change in the attitude of the general public towards smoking. However, there is no way that we can produce the same sort of result for obesity. While a smoker can quickly put his cigarettes aside and become “normal” again, there is no way an obese person can temporarily dump 20 kg of fat. We simply cannot produce the level of disapproval required to make inroads on obesity without cruelly discriminatory behaviour. This is clearly not an acceptable proposition.

This is one area that any government would be well advised to step away from. This kind of intrusive social engineering is not well tolerated in New Zealand society. I suspect Tony Ryall understands this. Which is why a Fat Tax is a non-starter.

Besides, the so-called obesity epidemic is not an epidemic at all. Estimates of the cost of obesity to the health system almost entirely fail to account for the fact that the vast majority of obese people have mild to moderate obesity, which has minimal health consequences. It is only when you start to carry more than 50% above your expected weight that you develop serious health consequences. There is not really a lot of evidence that an extra 10 – 15 Kg makes a whole heap of medical difference, particularly if you otherwise exercise and eat well. Thus statements like this…

Experts believed obesity was the biggest health problem facing the nation, with a cost to the health system estimated at $500 million a year.

…are wildly exaggerated for effect. It should be obvious to the “expert” quoted above that accidents are the biggest health problem facing the nation – after all ACC spends three billion a year on them. And it is highly unlikely that obesity alone accounts for $500 million in expenditure. This is almost certainly a composite figure that includes estimated contributions of obesity to heart disease and diabetes. The problem here being we have no idea how many people classified as obese are sufficiently overweight to increase their chances of heart disease and diabetes, so this figure is little more than a guess.

Of course, this wouldn’t be the first time a government has found a non-functional solution to a dubious problem that is constructed almost entirely of conjecture and guesswork, wouldn’t it?

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3 Responses to “Fat Chance of Fat Tax”

  • We did a briefing on this issue this morning at the SMC. The discussion there was about whether removing GST on healthy foods like milk, vegetables and lean meats would encourage consumption of healthy foods. So a removal of tax on healthy rather than a tax fat on unhealthy food. Here’s the audio from the briefing…
    http://www.sciencemediacentre.co.nz/2010/07/09/should-we-scrap-gst-on-healthy-food/

    SHOP trial by University of Auckland has some interesting info on this issue.

  • The chief difficulty of removing GST on certain foods is the complexity of it. If the government excluded fresh vegetables and fruit and resisted the temptation to exclude frozen, dried and tinned veggies and fruit, the veggies in pre-prepared meals, rice, fruit in breakfast cereal and nut bars etc,etc, I would have little difficulty with it. Not much chance of that though…

  • What is the actual problem that removing GST on some foods is trying to solve? What other solutions might there be? What evidence is there for each possible solution? What are the costs of each possible solution? Could we get more bang for our buck by applying this cost to solve some other problem?

    Can we try to be a little bit scientific in this?