Appetite for sugar tax to fight diabetes and obesity

A 20 per cent tax on all sugar-sweetened drinks should spearhead efforts to stem Australia's diabetes epidemic, a parliamentary inquiry has found.

The year-long inquiry into the nation's fastest-growing chronic disease made 23 recommendations aimed at strengthening the government's response to diabetes and obesity.

Committee chair and Labor MP Mike Freelander said the report tabled in federal parliament this week aimed to improve health outcomes for the 1.5 million Australians affected by diabetes, by seeking to raise awareness of major risk factors such as obesity.

A overweight person walking in a street.
Being overweight can increase a person's risk of developing diabetes later in life. (AP PHOTO)

"The committee heard about ways the Australian government can improve access to new diabetes technology and life-saving medications for people living with different forms of diabetes," Dr Freelander said.

"There are also many ways that we can support Australians to prevent, delay the onset of, and better manage this condition."

A central plank of this strategy is a tax on all sugar-sweetened beverages including soft drinks, cordial, energy drinks, sports drinks, fruit drinks and flavoured mineral waters.

This includes water-based beverages with added caloric sweeteners such as sucrose, high-fructose corn syrup or fruit juice concentrate.

It does not include alcoholic drinks or artificially sweetened (diet) drinks.

The Parliamentary Budget Office estimates that after allowing for collection costs and a drop in GST revenue, a tax on sugar-sweetened beverages introduced on July 1, 2025 would raise almost $1.4 billion in the following two financial years.

However, the financial implications were uncertain and sensitive to the response of customers and manufacturers to the price increase, the office found.

Australians drink at least 2.4 billion litres of sugary drinks every year, with the average 375ml can of soft drink containing about 12 teaspoons of sugar.

The Australian Medical Association said it was "100 per cent behind" the tax.

"Our modelling shows we can prevent thousands of cases of diabetes if we act," the association's president Steve Robson said.

Bottles of soft drink
The report takes aim at water-based sugary drinks but not those containing artificial sweeteners. (Dan Peled/AAP PHOTOS)

"A sugar tax would have a huge impact on Australia's health system and the AMA's modelling suggests a sugar tax could result in government revenue of $4 billion across four years, which could be used to fund further preventative health activities."

In a dissenting report, coalition committee members said they weren't convinced a tax would be an effective or targeted measure, or that it could be implemented without a disproportionate impact on the community.

"Coalition members hold concerns that with a cost of living crisis, which shows no signs of abating, a proposal for a new tax applied to sugar-sweetened beverages would hit hardest those who can afford it the least," they wrote.

As well as a tax applied according to a drink's sugar content, the committee recommended:

* An economic analysis of the direct and indirect cost of all forms of diabetes

* Food labelling reforms to help consumers identify added sugar content via front-of-pack labelling.

* Regulating the marketing and advertising of unhealthy food to children

* An expedited review of Australian Dietary Guidelines

* National screening programs for all forms of diabetes alongside a public health campaign

* Expanding subsidised access to insulin pumps for all Australians with Type 1 diabetes.

Type 1 diabetes is an auto-immune disease, but type 2 diabetes - which accounts for more than 1.3 million cases - is largely preventable, with obesity the strongest risk factor.

an insulin injector
Type 1 diabetes has many symptoms, including fatigue, and mainly requires insulin therapy treatment. (AP PHOTO)

There has been a 32 per cent rise in cases in the decade since 2013.

Adopting the recommendations would make a difference after decades of calls for more prevention, Diabetes Australia Group CEO Justine Cain said.

"This report includes a comprehensive package of measures that can really make a difference, and we need to see them implemented together," she said.

"There is no single solution; we need strong action on all fronts."

The committee also recommended equitable access to diabetes health care through longer, subsidised appointments and telehealth services.