Second opinion: Taxes should be high enough to change bad health habits

Adding a few cents to tobacco and alcohol products rakes in revenue and does nothing to change bad health habits. Budget 2014 can do so much more.

Adding a few cents to tobacco and alcohol products rakes in revenue and does nothing to change bad health habits. Budget 2014 can do so much more.


WILL TODAY’S budget be good for health or another lost opportunity? Every year the government tinkers with taxation, adding a few cents to the cost of cigarettes and alcohol. Sometimes the tax changes make no sense from a health point of view.

The Finance Bill 2012 changed the definition of bread. Forty years ago bread was assigned a zero tax rate provided fat and sugar levels did not exceed 2 per cent of flour weight. Now bread, including bagels, scones, blaas and pittas, can contain three times the amount of fat and sugar as previously and still qualify for a zero VAT rate. This was and is bad news for obesity.

The Royal College of Physicians of Ireland has called for a 20 per cent tax on sugar sweetened drinks (SSDs) to tackle obesity. A compelling case can be made for taxing all drinks containing sugar, fructose and fruit juice concentrates.

A 2012 report from the Institute of Public Health, Proposed Sugar Sweetened Drinks Tax: Health Impact Assessment, shows that “SSDs are a source of energy intake with little or no other nutrient contribution to the diet”. In Ireland 83 litres of SSDs are consumed per person every year, contributing hugely, pardon the pun, to our obesity epidemic.

According to the Yale Rudd centre for food policy, taxing SSDs is considered “to be one of the best strategies to improve the nation’s nutrition, raise revenue for health programmes, and recover the medical costs of treating diet-related diseases”. The most important thing is to impose a high enough tax to affect consumer behaviour. The centre recommends a tax of one cent per fluid ounce, adding 20 cent to the cost of a standard sugary drink. In Ireland this would raise nearly €150 million every year.

More taxes should also be levied on tobacco and alcohol products. Minister for Health James Reilly recently launched Tobacco Free Ireland which promises to increase annual excise duty on tobacco products over a continuous five-year period.

Tobacco products will also be removed from the consumer price index and a tobacco industry levy or similar mechanism will be imposed which can be used for health promotion purposes. This is very good news for population health. As with sugary drinks, the most important thing is to levy a high enough tax increase to influence smoker behaviour. Last year’s budget added a mere 10 cent to the cost of 20 cigarettes when it should have been at least 80 cent.

Investing in Mental Health: Evidence for Action (2013), published by the World Health Organisation, recommends restricting access to off-licences, enforcing bans on alcohol advertising, and raising taxes on alcohol as being affordable, feasible and very cost-effective measures to stop problem drinking and improve mental health. Again the trick is to levy a high enough tax to influence drinking behaviour. A 10 per cent tax increase on all alcoholic beverages is associated with a 32 per cent decrease in alcohol-attributable deaths. Last year’s budget added 10 cents to the cost of a pint and standard spirit measure when it should have been at least 50 cent.

Fiscal policies are the most powerful of all public health measures. They are so effective that they are fiercely resisted by vested interests.

All kinds of arguments are put forward as to why the government should not levy heavy taxes on alcohol, tobacco products and SSDs. One is that these taxes are regressive and disproportionately hurt poor people who can least afford to pay. Another argument is that the government should not act as a nanny and should stay out of the private choices people make about their health behaviour.

The food and drinks industries say their products are not the problem and individuals are making bad personal decisions. These arguments can be dismissed.

All chronic diseases already disproportionately affect those in lower socio-economic groups. We expect the government to exercise its role as protector of public health when there are crises affecting the nation. Major government interventions have already improved health such as banning smoking in public places, immunisations and road safety laws.

Adding a few cents to tobacco and alcohol products rakes in revenue and does nothing to change bad health habits. Budget 2014 can do so much more.

Imposing high enough taxes to influence smoking, eating and drinking behaviour might even raise enough revenue to revert the previous cuts to carers’ allowances and services for people with disabilities.

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