Impact of fat tax on Australian economy

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Australia is now considered as one of the most obese countries in the world, with 63% of Australians being either obese or overweight1. To counteract this, there has been speculation over whether to introduce a fat tax. This tax would specifically target foods high in fats and sugars, such as; soft drinks and deep fried takeaways. The logic behind such a tax is that an increase in price would lead to decrease of demand similar to that of the alcohol and cigarette taxes respectively, in order to improve our country’s health as a whole. The advantages and disadvantages of the fat tax can potentially help foresee the effect on the Australian economy. The effectiveness and consequences are also aided by the views gained from the implementation of a fat tax by the Danes in 2011. With Australia’s current federal debt at two hundred and forty seven billion dollars , the added burden of twenty one billion dollars a year of debt from diseases associated with unhealthy foods1 being decreased would be a welcomed relief to the federal government. This coupled with the influx of tax revenue from a successfully implemented fat tax would lead to a hefty sum of tax payer money of which the government can use. The advantages of this to the Australian economy would be immense as the money would hopefully go to funding the agricultural section. Australia’s agriculture section, in accordance with Australian Bureau of Statistics contributed $48.7 billion dollars towards Australia’s total gross domestic product (GDP) . The added government stimulus from the fat tax could contribute greatly to increasing the GDP. The stimulus would help conquer the water shortages farmers face every year, as well as increasing efficiency enabling the purchase of modern agriculture capital, hereby increasing economic efficiency. This increase in agricultural revenue could have a positive effect on jobs as farming becomes a more financially appealing career choice. However, consequences of this could...
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