EMMA ALBERICI. Sugar tax and the power of big business: How influence trumps evidence in politicsJan 26, 2018
Australia markets itself as a liberal democracy committed to the principles of equality and fairness. But in practice, those with clout or money or both can influence public policy in a way other members of the public cannot.
Take the tax being proposed for sugary drinks. Despite the mountains of evidence pointing to the public health benefits of adopting this fiscal approach, powerful vested interests have muddied the waters and convinced politicians to go against the prevailing evidence.
According to the World Health Organisation, a sugary drinks tax would work much the same way as tobacco excises have — as a price signal designed to discourage a behaviour the WHO says is a leading cause of obesity and type-2 diabetes.
One 375ml can of soft drink contains 10 teaspoons of sugar — four more than the WHO says is the optimum daily intake.
There is no nutritional value whatsoever in soft drinks and so-called energy drinks despite the nonsense sometimes printed on the cans and bottles.
Since 1980, the obesity rates in Australia have just about tripled (from 10 per cent to 28 per cent).
The Grattan Institute estimates obesity is now costing Australian taxpayers more than $5 billion a year in healthcare costs, welfare expenditure and lost income taxes (heavier people work less).
Over the past four years, 20 countries have introduced a sugar tax including six US cities. Mexico was the first in 2014.
Since then, sales of sugary drinks have seen a sustained drop of about 8 per cent per year. The fall in consumption among poorer communities, known to be the biggest consumers of sugar sweetened drinks, has been much higher.
This year a sugar sweetened drinks tax will be levied for the first time in the UK, Ireland, South Africa, Estonia and the US city of Seattle.
Announcing the new sugar tax in London, Chancellor George Osborne said: “I am not prepared to look back at my time here in this Parliament, doing this job and say to my children’s generation: I’m sorry. We knew there was a problem with sugary drinks. We knew it caused disease. But we ducked the difficult decisions and we did nothing.”
The peak body for GPs — the Australian Medical Association — and countless others whose job it is to look after Australia’s collective wellbeing are in favour of this new tax and an Essential Poll shows 53 per cent support it too, including a majority of Coalition voters.
Against all that evidence and popular support, it beggars belief that a government mired in debt and deficit would reject a new $500 million tax, out of hand.
A spokesman for Health Minister Greg Hunt said the Government didn’t want to be responsible for lifting the grocery bill for Australian families.
As rural health minister, former senator Fiona Nash went further and said she wouldn’t even discuss the matter.
Deputy Prime Minister Barnaby Joyce thinks we should go for a run and not in the direction of the ATO when looking for a way to solve our obesity crisis.
It’s no surprise that the two most senior National Party figures are opposed to taxing what’s been dubbed a sweet poison. Such a move would be political poison in Queensland where 95 per cent of our sugar is grown. The industry employs 16,000 people and raises $2 billion in export dollars.
But there’s more to it than appeasing an important local industry.
Companies and their representatives have made an art form of subverting democracy with their disproportionate influence over government decision making.
Sure, our elected representatives must weigh the pros and cons of things like new taxes but they’re not helped in the nutrition space by a deliberate global campaign to seed doubt about the health risks of sugar, not dissimilar to the big polluters who’ve worked tirelessly to confound the public about the risks of climate change.
When Mr Joyce says people are better off putting on a pair of joggers than relying on Government to help them kick the soft-drink habit, he seems to be singing directly from the Big Soda songbook.
Coca-Cola has spent millions funding researchers to tell the public a lack of exercise is worse for you than sugar despite the growing chorus of cardiologists, GPs and independent nutrition scientists advising overweight people against trying to run off a bad diet.
For seven years, the University’s Professor Jennie Brand-Miller has argued that there was an inverse relationship between Australians’ sugar consumption and obesity between 1980 and 2010.
She continues to promote this “Australian Paradox” despite the fact that her own graphs show the very opposite to be true. Sugary drink sales were up 30 per cent not down 10 per cent as she wrote in her report.
When the ABC questioned her about the false claim, she told us that what she’d actually meant to note was that Australians had been consuming less sugar per drink through new products like Pepsi Next and Coke Life. The problem was that those drinks weren’t produced until after 2010 so could not be used to support her argument.
Like so many other nutrition scientists around the world, it would seem Professor Brand-Miller has allowed her work to be compromised by junk food and drink companies.
Her foundation at Sydney University accepts about $6,000 each time it adds a low-GI tick to foods and drink. It even marks sugar itself as a kind of healthy food despite the WHO declaring that “nutritionally, people don’t need any sugar in their diet”.
Researchers from the University of California, San Francisco, published data in the Annals of Internal Medicine revealing that of the 26 studies of nutrition showing no link between sugar and obesity, all were funded by the sugary drinks industry. Of the 34 studies that found the opposite to be true, only one received industry funding.
In its 2016 annual report, the Beverages Council revealed that it had “devoted significant resources to keeping a tax off the policy table”. It named Ms Nash, Nick Xenophon and Labor’s Health spokeswoman Catherine King as “key politicians” it had successfully lobbied.
“The board will attest that our engagement with these politicians was lively, honest and open and beneficial for all parties concerned,” it said.
“On reflection some of the support the industry received during the subsequent calls for a soft drink tax as mentioned above we like to think was due in part to the positive outcomes from this meeting in Canberra.”
In big tobacco’s footsteps
Big tobacco once deployed similar tactics to confuse politicians and the public about just how dangerous their products were. But the Australian Parliament did not hesitate to raise tobacco excise last year and will do so again this year.
At $40 a packet, our cigarettes are now among the most expensive in the world. Lifting the price has been hugely successful in bringing Australian smoking rates down from 24 per cent in 1995 to 14 per cent in 2015.
Last week, the former New York mayor Michael Bloomberg and Larry Summers, the ex-US Treasury secretary, joined forces to announce a new global group to advocate for sugar taxes to improve public health.
The group includes the President of Uruguay, a former New Zealand prime minister as well as leaders from Britain, China and Nigeria.
“Generally, I think sugar is where tobacco was in 1973,” Mr Summers says.
“We’ve recognised how serious it is as a public health problem. There are initiatives, and the tide is rolling in. But it takes a long time.”
When contributions aren’t donations
The influence of powerful individuals and companies on Australian politics extends well beyond the health portfolio.
A Senate committee, which is due to report in March, is examining the potential for donations to obscure due process across all sectors of policymaking.
Led by Greens leader Richard Di Natale, the Senate Select Committee into the Political Influence of Donations is looking at some of the ways people are forking out tens of thousands of dollars to gain access to politicians. Its final public hearing is in Sydney next week.
Submissions have now closed and they make for curious reading. The documents reveal the ways in which money paid to political parties is being obscured by various questionable but entirely legal means.
For example, the Macquarie Group declared that it handed over $250,550 to the Liberal and Labor parties in 2016/17. In its letter to the committee, the bank’s head of communications, Paul Marriott makes the point that Macquarie isn’t required to disclose donations below a threshold of $13,500.
Mr Marriott notes that of the bank’s “political contributions”, just 7 per cent ($17,538) are in the form of donations to both major parties. The other $233,000 Macquarie gave to the Liberals and Labor last year is explained as “membership fees” paid to join “business forums” which give Macquarie and others the opportunity to share a table and dine with politicians.
Groups like the Progressive Business Association (Labor), Enterprise Victoria (Liberal) and the Platinum Circle (LNP) are advertised as business forums organising events that offer direct access to politicians.
Macquarie’s Paul Marriott writes that: “Macquarie provides financial support to the Government and Opposition, primarily through paid attendance at events and membership of government and Opposition business forums.”
Exactly what goes on at these events is left to the imagination but they’re considered such good value for money that Woodside, the country’s biggest oil and gas producer, abandoned all direct political donations choosing instead to pay for membership of these business forums.
For companies and political parties, having money paid to Labor and Liberal business forums instead of directly to the party, is a win-win in terms of avoiding scrutiny.
The company is under no obligation to specifically declare the payment as a political donation (Macquarie calls them political “contributions”) and there’s no requirement for the entity to list its members which makes it nigh impossible to determine who might be gaining access to politicians, when, why and for what intended benefit.
There doesn’t appear to be anything stopping a property developer in NSW signing up for membership to such forums in an effort to circumvent state laws prohibiting political donations by property developers.
A letter from Brian Jeffriess, chief executive of the Australian Southern Bluefin Tuna Industry Association in South Australia, tells us what we already suspected: businesses make political donations because they expect a policy outcome in return.
The Southern Bluefin Tuna Industry wrote to the Senate committee about its $320,000 donation to the Liberal Party — a sum they’d given in the vain hope of influencing decisions about measuring the Australian share of the international fishing quota:
“We are part of the deep frustration in the community about political parties breaking promises. In our case we, naively, took out our frustration with a donation — and we should have known better … Obviously it was an impulsive mistake”.
One thing is certain, money talks or at the very least in Australia it gives you the opportunity to talk to power.
We saw it with the multi-million-dollar union campaign against Work Choices in 2007 and a similar investment by the resources industry in its attacks against the mining tax in 2009/10.
Clubs and pubs proved so effective in their campaign against poker machine reforms that former PM Julia Gillard reneged on a deal with Andrew Wilkie and was then forced to install Peter Slipper as speaker to shore up her numbers in the hung Parliament.
It’s happening everywhere
This kind of soft power is undermining democratic processes the world over. Last year, the United States lost its status as a full democracy after The Economist Intelligence Unit’s Democracy Index listed it as a flawed democracy for the first time in history.
The authors didn’t blame Donald Trump for the negative assessment. They said public trust in political institutions had been in decline for some time.
And is it any wonder when the US President can sell the opportunity to attend a dinner later this month at Mar-a-Lago in Florida to celebrate his first year in office.
For the princely sum of $125,000 a couple can dine with Mr Trump and have their photo taken with him.
For $250,000, they can sit and engage in a roundtable discussion with him.
So much for that Athenian political principle that’s supposed to work in the best interests of the majority.
This article first appeared on ABC News.
Emma Alberici is the economics editor of the ABC