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A 20 per cent subsidy on fruit and vegetables, combined with a consumer tax on the saturated fat, salt and sugar content of foods would bring major health gains, a trans-Tasman research team says.

Researchers from Otago, Auckland and Melbourne Universities have developed a model to estimate health gains and cost savings to the New Zealand health system through the combined tax and subsidy scheme.

Their peer reviewed simulation modelling has been published in The Lancet Public Health today (1 July).

In their model, fruits and vegetables were subsidised by 20 per cent, junk food was taxed at eight per cent, and additional taxes were applied to saturated fat, sugar, and salt.

Lead author Professor Tony Blakely, who is an Honorary Professor in Public Health at the University of Otago, and Professor at the University of Melbourne, said there would be large potential health gains from such a scheme, which would be cost neutral for consumers.

“They range from 212 health-adjusted life years gained per 1,000 New Zealanders for the fruit and vegetable subsidy, up to 361 health-adjusted life years for the saturated fat tax, 375 health-adjusted life years for a salt tax, and 581 health-adjusted life years for the sugar tax.”

“A food tax and subsidy scheme would also contribute to closing health inequalities by bringing greater per capita gains for Māori.

“A tax on sugar alone could save the health system NZ$14.7 billion over the lifetime of New Zealand’s 2011 population.”

Blakely said with obesity being one of the leading causes of health loss and health system costs, the health gains from a tax and subsidy regime would be larger than those projected for a 10 per cent a year increase in tobacco tax between 2011 and 2025.

“All the interventions we modelled led to notable reductions in most chronic disease rates – the largest being a one quarter to one third reduction in the incidence of diabetes in 30 years’ time.”

Blakely conceded the downsides to food taxes and subsidies include administrative and other costs. “Nevertheless the health gains and cost savings from food taxes and subsidies require serious policy consideration and public discussion.”

Paper co-author Dr Cristina Cleghorn from the University of Otago said food taxes and subsidies are some of the most powerful tools which can be used to improve health.

“Mexico, for instance, introduced an eight per cent tax on junk food in 2014, which reduced purchasing of these foods by six per cent. These measures are both feasible and effective.”

Cleghorn said there were environmental gains to be had as well, considering food production and distribution are a major source of greenhouse gas emissions.

To estimate the potential health gains, the researchers used simulation modelling of the entire New Zealand population until their death under a ‘business-as-usual’ scenario.

They then layered on the impacts of food taxes and subsidies on the rates of 17 diet-related diseases to estimate the changes in health-adjusted life years and health system expenditure over the 2011 New Zealand population’s remaining lifespan.

While the researchers suggest the scheme could improve public health, particularly for Māori, by reducing the rates of diet-related diseases, they said that decisions on food taxes and subsidies should not be made based only on simulation modelling studies.

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