Taxing junk foods and reducing the cost of fruit and vegetables would save the health system billions of dollars, say Melbourne researchers.
It could also add more than two years to the lives of Australians.
A new study by researchers at the University of Melbourne suggests a package of subsidies for healthy foods and taxes on products high in salt, sugar and saturated fats would save $3.4 billion over many decades.
Importantly it wouldn't change how much the average household spends and big health gains would be made, claim the authors.
According to the modelling, published in journal PLOS Medicine, the package would result in an additional 2.1 years of healthy life for every 100 Australians alive in 2010.
Just a tax on sugar in foods like confectionery and ice cream would result in 1.2 additional years of healthy life.
Co-author Professor Tony Blakely from the Centre for Public Health Policy says with obesity estimated to cost the country up to $5 billion a year, the introduction of a sugar tax - that has wide support from the medical and health industries - would be a good "first step".
"Critics often say taxes on unhealthy food make life tougher for low socio-economic households, but we've demonstrated that the right structuring of incentives means the financial impact on households is negligible, while their health improves," Professor Blakely said.