Why don’t we tax all the corporate causes of ill health at their source? The revenue we currently extract from the tobacco and alcohol industries doesn’t offset the health costs of drinking and smoking: in fairness it should. And is there a good reason why we wouldn’t line up unhealthy food and unhealthy non-alcoholic drinks for a punitive level of tax as well?

Here’s how I see it.

These companies spend a lot of money persuading consumers to buy their products. The results of their marketing are increased profits for them and a substantially increased load on the health system for everyone else. In effect taxpayers subsidise the profits of companies which reduce average life expectancy, diminish quality of life and inflate the health vote. Isn’t it logical that targeted taxation should be used to dampen demand and recoup some of the additional health costs?

Logical, yes. Politically palatable, not so far.

Self interest

We’re all consumers and we’re all voters. Individual politicians may personally be prepared to pay more for unhealthy food and drinks, but they know it’s not a vote winner. They also know how inevitably and effectively lobbyists against the policy would frame it as a negative to those who would ultimately benefit most from it.

Education is the most effective tool for shaping and supporting political will. Before we can contemplate the introduction of a tax on the health impacts of alcohol, junk food and soft drinks, those products need the same type of education programme already provided for tobacco. Such an education programme includes the cessation of advertising and the presentation of the real facts.

Philosophy

For thirty years we’ve been told that giving market forces a free reign will produce better and fairer outcomes for everyone. It’s a nonsense: market forces merely ensure the survival of the fittest. Government is tasked with providing equitable outcomes for the whole population, including those most vulnerable to the predations of market forces.

Taxation can be both a powerful and a subtle component in the arsenal of policy makers, but we’ve largely turned our backs on it in obedience to the market forces mantra of a level playing field. We’re left with the blunt instrument of legislation, and well meaning but ineffectual media campaigns intended to modify behaviour. Both are too easily influenced by moneyed interest groups.

It’s time we took stock of the last thirty years, not in terms of commerce but in terms of the wider social indicators. There is a place for targeted taxation to achieve policy goals.

Complexity

It’s commonly believed that the cost of collecting a targeted tax is disproportionate to the revenue achieved. This is not as true as it once was: technology makes the tracking of individual product sales straightforward. Compliance costs will not be unreasonable for retailers if the new taxes are implemented within existing tax structures.

We can expect that retailers will respond to the imposition of taxes by modifying existing products and creating new alternatives to keep below the tax threshold. These outcomes are to be applauded. That the retailer must include additional tax in the pricing of one item but not another doesn’t represent any significant difficulty, and the price difference helps the consumer make healthy choices.

Liability

Alongside our mindless obeisance to market forces we’ve come to regard a network of free trade agreements as the holy grail that will sanctify New Zealand’s economic future. We should be careful here. All international treaties have conditions, and some of those conditions may make it difficult for future governments to act in the best interests of its citizens.

Specifically, the proposed Trans Pacific Partnership allows overseas companies to take on the New Zealand government in overseas courts if they believe they’re disadvantaged by our actions. Such a possibility may have a chilling effect on the policies needed to redress the harm caused by unhealthy food and drink – while targeted taxation would be even-handed, the largest players in these market sectors are overseas companies.

Sovereignty should be unalienable. We must retain the right to act in our country’s best interests in all policy areas.

There may be obstacles to overcome, but a targeted tax on unhealthy food, unhealthy non-alcoholic drinks, tobacco and alcohol is a reasonable and prudent response to the high and increasing health costs they generate. Not only will such a tax encourage a shift in consumption patterns; the resulting revenue can be targeted at the specific health issues these products cause. The outcome will be a healthier, happier, more productive New Zealand.