Opinion: Taxing calories a dangerous trend

Not so sweet: Treats like this could come at an increased price with the introduction of a sugar tax. But such a measure could affect more than your wallet and waistline. It could be disastrous for the New Zealand economy.

A RECENT report in the United Kingdom has claimed that a meat tax is globally inevitable. In Germany, there's already debate on imposing additional taxes on certain meats and cheese, because of their impact on the environment and human health. In a number of countries, sugar taxes have already been implemented, for similar reasons.

So far, New Zealand hasn't imposed these kinds of taxes. However, there is a well-organised political campaign being run out of the Universities of Auckland and Otago pushing the introduction of a sugar tax. In April, the New Zealand Dental Association publicly called for a sugar tax. In June, celebrity chef Jamie Oliver attacked the New Zealand Government for their lack of action in taxing sugar.

Introducing a sugar tax would be a mistake.

First and foremost, that's because these taxes have been shown to be ineffective where they've been tried. In Mexico, the initial introduction of a sugar tax only reduced the average caloric intake for Mexicans by 6 to 7 calories. That's the equivalent to walking an extra two minutes a day. Denmark abolished plans for a sugar tax in 2012, after their fat tax, only introduced a year earlier, was shown to be a dismal failure.

However, what's much more important for New Zealand is the trend a sugar tax represents. The justifications for these kinds of taxes can be, and already are, used for an array of taxes, that even five years ago, we would have laughed at.

Meat will be taxed to encourage people to eat chickpeas. Butter and cheese will be taxed for containing too much fat. Milk will be taxed for hurting the environment, and containing more calories than a healthier alternative, like water.

The imposition of any of these taxes would be disastrous for the New Zealand economy.
The same justifications currently being used to lobby for a sugar tax, can and will be used for a fat tax overseas. If New Zealand accepts that we should tax sugary drinks, despite the cost it will impose on households, particularly those which are poorer, dairy farmers will be right to be concerned that butter will be next.

A free-trade agreement with the European Union would be watered down significantly if they imposed a tax on butter and cheese as many there are calling for. Our beef and lamb sector would face huge problems if there's a global push for a tax on meat.

It's imperative that the Government fights for our interests on these issues. The agricultural sector is still the backbone of our economy, and thanks to innovation in the sector, that's unlikely to change any time soon. Ninety-five per cent of our dairy production is exported, contributing $13.6 billion in revenue last year. Any change to the international tax treatment of dairy products would cause huge problems for growth and employment.

To have any credibility on this issue, we have to be consistent. That means steering clear of calorie taxes at home.

■ Joe Ascroft is an economist at the New Zealand Taxpayers' Union, which lobbies for lower taxes, limited and accountable government, and taxpayer rights.