Economists call for 'fat tax' on food

Published: 7:28PM Tuesday May 03, 2011 Source: ONE News

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A group of economists is urging the government to tax unhealthy foods in order to fight what they call a "diabetes tsunami".

New Zealanders have heard it all before, but the proposed "fat tax" on salty, sugary and fatty foods is being proposed by the economist group, The Morgan Foundation.

As well as taxing unhealthy foods, the foundation wants to introduce fruit and vegetable vouchers, the foundation's economist Geoff Simmons says.

"Baby boomers right now looking forward 10 years and wanting a hip or knee operation? Tough luck. The hospitals are going to be filled with diabetics," he said.

Simmons is proposing a two-stage response to New Zealand's obesity epidemic by first, making changes to food labels in order to make it easier to recognise unhealthy foods.

Secondly, he wishes to see tax rates go up on those foods.

"As soon as there is public acceptance of the fact we need to act, then we can start changing the prices," said Simmons.

Arguments such as freedom of choice have been brought to the surface, but there is also a silver lining for food lovers as the tax collected on the junk foods would be used to make healthy foods cheaper.

"For the same price as taking GST off fruit and vege, you could actually give all parents five dollar vouchers, per child, per week. And that would really encourage them to put fruit and vegetables on the table, in front of the kids."

According to another economist, Brian Gaynor, this is a logistical nightmare and just not salvageable.

"It's going to be in the practical implementation that the politicians will say, this is going in the 'too difficult' basket," he said.

Health Minister Tony Ryall and the government have already made clear they're not all that interested in the 'fat tax' idea, stating the cost of living is already high enough.

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