Treasury's advice on soft drink tax revealed

The Government was criticised by the Green Party and some public health specialists for not including a tax on sugary drinks as part of its major anti-obesity plan unveiled last month. Photo / iStock

Treasury told Government ministers a tax on soft drinks was one of the "most promising" options to cut high obesity levels, newly released documents show.

However, later advice by officials said there was still some doubt about a tax and it warned that the measure could simply shift consumers on to other unhealthy alternatives.

The Government was criticised by the Green Party and some public health specialists for not including a tax on sugary drinks as part of its major anti-obesity plan unveiled last month.

Health Minister Jonathan Coleman said at the time that there was no conclusive evidence for a tax on soft drinks.

The Treasury has now released the advice it gave to ministers on possible anti-obesity measures.

In a report produced in February 2014, officials said the most promising regulatory responses to New Zealand's obesity epidemic were a sugar-sweetened beverage tax, regulations on marketing to children, and a front-of-pack labelling system.

The report said a sugar-sweetened beverage tax would lead to a fall in consumption and health benefits including a reduction in diabetes and improved dental health.

The proposed policy would hit poorer families harder, but some studies said this would be "progressive in terms of health outcomes" because poorer groups had higher rates of obesity.

Officials recommended further research to work out how a tax could be implemented and what products it might capture.

In a briefing paper in December 2014, Treasury passed the findings on to Finance Minister Bill English. Officials said a tax on soft drinks was among "the most promising regulatory approaches to explore further".

The paper pointed to international evidence which had shown these taxes were effective in reducing consumption in France and Hungary. It also warned noted that evidence for its health benefits was "mixed" and consumers might simply shift to other high-calorie products if a tax was introduced.

A further Treasury report in February 2015 concluded that there was still "great contention" over health taxes and said they needed to be considered carefully.

"There is generally not enough of a clear direction in whether a tax would be an effective solution, especially in the substitution patterns," the report said.

The Government's final anti-obesity package did not include a tax on sugary foods or drinks and focused instead on a new health target for childhood obesity, a review of the advertising of food to children, and a nationwide anti-obesity campaign.

The Labour Party also opposes a sugar tax. But it promised at its annual conference that it would make food manufacturers reduce sugar content and clearly display sugar levels on packaging.