Australia Fat Tax: Aussies Tax Junk Food To Fight Rising Obesity Rates

The French government was trying to impose a higher tax on sodas, Denmark chose to go even further.

The country became the first in the world to introduce a tax on fat. The reports explained on May 8, that Australia is now eyeing their own fat tax.

Presented as a measure to fight against obesity, it will increase the prices of junk foods. "We think unhealthy foods should be taxed and the funds raised used to subsidies healthy food for people on a low income," Jane Martin, the senior adviser with pressure group Obesity Policy Coalition said.

The tax will apply to all products containing more than 2.3% of fatty acids of meat in butter through oils, cheeses, creams and processed products.

As retailers are rubbing their hands, consumers are frowning upon the upcoming fat tax. There is even talk of an "administrative nightmare."

The Australia fat tax will indeed require producers to claim statements not only on the amount of saturated fat in the product, but also how much is used in its preparation.

Similarly, updating computer systems will require many hours of overtime for producers and retailers. All this has a cost that will be passed on to consumers. Many are lashing out against the Australia fat tax. Some are say they don't believe that this will have a positive impact on health, while others think it is simply an additional fee.

The Economics Student Society of Australia, ESSA, recently published their assessment of the fat tax. ESSA points to the difficulty in defining what is fat, appropriately taxing fatty foods to correct market pressures, and implementing the fat tax without a high administrative cost. Essentially, they consider Denmark to be a warning to other nations that fat taxes do not work.