The federal government is being called upon to consider a 20 per cent tax on unhealthy items, such as soft drinks, confectionery, biscuits, pastries, ice cream and processed meat, while redistributing that revenue to bring down the cost of healthy foods.
About 212,000 premature deaths related to diabetes and cardiovascular diseases could be averted, saving $15 billion in healthcare costs over the lifetime of the current adult population, according to modelling from the George Institute for Global Health.
Subsidising fruits and vegetables using the tax revenue could also prevent 45,000 deaths and 191,000 cases of type-two diabetes.Â
The research found a broader unhealthy food tax, costing the average Australian an extra $140 in tax each year, would be seven times more effective than previously advocated soft drink taxes.
"Using a combined tax-subsidy package could tilt the playing field in terms of food prices and help improve our diets in Australia," lead researcher Tazman Davies told AAP.
Only four per cent of Australian adults consume the recommended amount of fruit and vegetables, while two-thirds are overweight or obese.
Rather than a universal subsidy, Mr Davies said it would be more feasible to target measures at lower income Australians who face the highest impact from the tax, but bore the greatest burden of diet-related disease due to structural inequalities.
These include expanding the Low Cost Essentials Subsidy Scheme, where the government caps the cost of certain goods in remote Indigenous communities, school feeding programs, healthy food vouchers, or prescriptions for healthy food where a food-insecure person could get prescribed healthy options by a doctor.
The researcher conceded the likelihood of the government adopting the proposal was low, but said it was an excellent conversation starter as more than 100 nations have already implemented varying taxes on junk food.
"The momentum is building, and that will continually put pressure on Australia to consider similar policies," Mr Davies said.
The federal government is working with the processed food industry to reduce the amount of sodium, sugar and saturated fat across a range of products and has exempted fruit, vegetables, and other core foods from the GST, a spokeswoman for Health Minister Mark Butler said.
Food ministers will also consider preparations for mandating the health star rating system.
Taxing unhealthy items alone would not be a silver bullet, with Mr Davies urging a comprehensive nutrition strategy that included mandating the health star rating, restricting junk food advertising and limiting sugar and salt in products.
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