Calls for tax on sugary drinks to curb health crisis

"The bigger context for all of this is this real crisis of preventable disease," the Grattan Institute's Peter Breadon, said.

The Grattan Institute report recommended a tier tax system where drinks with the highest levels of sugar would attract the highest level of tax. Those with little to no sugar would attract no tax.

This proposed system would encourage manufacturers to reformulate their recipes and promote healthier options to consumers, Mr Breadon said.

117 countries have implemented some form of sugar tax with the World Health Organisation calling for taxation on all sugar sweetened drinks.

Alcoholic drinks and juices would not be included in the proposed system although Mr Beardon did not rule that out as a recommendation in the future.

"We wanted to make it as straightforward as we could to get this over the line. There's no reason to think that down the track you can't think about sugary juices, sugary alcohol drinks and so on."

Mr Breadon acknowledged that Australians in lower socio-economic groups consumed more sugary drinks on average but said they were also more likely to suffer the ill-effects of poor health.

"An even bigger worry is that these groups have more disease, more disability, earlier deaths. That's a bigger attack on their life than our proposed sugary drinks tax."

"So the gains from the tax - the health gains - will disproportionately go to this group."

Mr Breadon calculated the cost of the proposed tax to be around 29 cents a week for the average Australian but said this would be "dwarfed" by the health gains.

Under the tier system, about half of all drinks and one fifth of drinks with added sugar would attract no tax, Mr Breadon said.

"This is one of the really important reasons we chose a tier tax design. We really thought it's important to maximise the choice available with no tax," Mr Breadon said.

The Australian Beverages Council has opposed the proposed tax saying similar taxes in other countries have not been shown to reduce obesity or diabetes.

Australian Beverages Council's Cathy Cook said encouraging consumers to drink fewer sugary drinks should be done through education.

"Would it reduce the sales of soft drinks if soft drinks had a tax on it? Yes. Is that going to curtail or cure or even slow obesity or diabetes? The world is telling us no," Ms Cook said.

"Whilst my sector takes responsibility for its role in dietary choices and the role of sugar in diet, we're not the only part of what people put in their mouth that is contributing to diabetes."

Ms Cook said reducing the number of sugary drinks Australians consumed should be done as part of a suite of measures educating consumers on a healthy diet.

"It's the right drink for the right occasion and it's making those good choices each time that matters along with choosing what else you eat and what else you drink," she said.