The impact on productivity of a hypothetical tax on sugar-sweetened beverages

- A 20% tax on sugared sweetened drinks results in large productivity benefits.
- Productivity gains reached 1.9% of total annual health expenditure in 2010.
- Lifetime productivity gains in the paid sector amount to AU$751 million.
- Lifetime productivity gains in the unpaid sector amounted to AU$1172 million.
- We used an adapted multi-state lifetable Markov model.

ObjectivesTo quantify the potential impact of an additional 20% tax on sugar-sweetened beverages (SSBs) on productivity in Australia.MethodsWe used a multi-state lifetable Markov model to examine the potential impact of an additional 20% tax on SSBs on total lifetime productivity in the paid and unpaid sectors of the economy. The study population consisted of Australians aged 20 years or older in 2010, whose health and other relevant outcomes were modelled over their remaining lifetime.ResultsThe SSBs tax was estimated to reduce the number of people with obesity by 1.96% of the entire population (437,000 fewer persons with obesity), and reduce the number of employees with obesity by 317,000 persons. These effects translated into productivity gains in the paid sector of AU$751 million for the working-age population (95% confidence interval: AU$565 million to AU$954 million), using the human capital approach. In the unpaid sector, the potential productivity gains amounted to AU$1172 million (AU$929 million to AU$1435 million) using the replacement cost method. These productivity benefits are in addition to the health benefits of 35,000 life years gained and a reduction in healthcare costs of AU$425 million.ConclusionsAn additional 20% tax on SSBs not only improves health outcomes and reduces healthcare costs, but provides productivity gains in both the paid and unpaid sectors of the economy.