Official Information Act Response 20150441
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Reference: 20150441 12 November 2015 Thank you for your Official Information Act request, received on 14 October 2015. You requested the following: “This request for information is made under the Official Information Act. It relates to any work undertaken by The Treasury in relation to economic, financial and regulatory policy advice in the area of sugar taxes. The request seeks: 1. Copies of any Working Papers, commissioned by The Treasury relating to the issue of a sugar tax and or sugar sweetened beverages (SSB) tax for the 2014 and 2015 year to date. 2. Copies of any Analytical Papers of data and research undertaken or commissioned from internal or external authors by The Treasury on a sugar tax and or SSB tax for the same period. 3. Copies of any Policy Perspective Papers on a sugar tax and or SSB tax for the same period. 4. Copies of any communications received by The Treasury that seeks The Treasury’s modelling on a sugar tax and or SSB tax for the same period.” Information Being Released Please find enclosed the following documents: Item Date Document Description Decision 1. February 2014 Treasury Intern Research Report: Withhold junior official’s Regulatory Responses to address details under s9(2)(g)(i). the growing Obesity problem in New Zealand 2. 16 December Treasury Report: Options for Withhold junior official’s 2014 regulatory responses to the details under s9(2)(g)(i) and growing obesity problem personal contact details under s9(2)(a). 3. February 2015 (Incomplete Draft) Treasury Intern Withhold junior official’s Research Report: A Conceptual details under s9(2)(g)(i). Basis and Evidence Base for Health Tax I have decided to release the documents listed above, subject to information being withheld under one or more of the following sections of the Official Information Act, as applicable: • personal contact details of officials, under section 9(2)(a) – to protect the privacy of natural persons, including deceased people, and • names and contact details of junior officials and certain sensitive advice, under section 9(2)(g)(i) – to maintain the effective conduct of public affairs through the free and frank expression of opinions. It is worth noting that documents 1 and 3 are not Treasury opinion and that document 3 is an incomplete draft. The Treasury internship programme requires interns to produce a report on a topic supplied by the policy team they are assigned to. Alongside a mentor, they undertake their own research and engagements to feed into this report. The reports are high level and are sometimes not finished in the three-month time period they are limited to. Therefore, the reports do not represent a Treasury position and should not be taken as such. In making my decision, I have considered the public interest considerations in section 9(1) of the Official Information Act. Please note that this letter (with your personal details removed) and enclosed documents may be published on the Treasury website. This fully covers the information you requested. You have the right to ask the Ombudsman to investigate and review my decision. Yours sincerely Ben McBride Manager, Health 2 Information Being Released OIA 20150441 Doc 1 Page 1 Doc 2 Page 44 Doc 3 Page 53 Doc 1 Page 1 of 76 Released y r u s e a r T a n d l e a Regulatory responses to address Z the growing obesity problem in New w Zealand e N Withheld under s9(2)(g)(i) February 2014 i Doc 1 Page 2 of 76 Released i Doc 1 Page 3 of 76 Released I NTERNSHIP R ESEARCH Regulatory responses to address the growing obesity problem in P RO J E CT New Zealand M O N T H / Y E A R February 2014 NZ TREASURY New Zealand Treasury PO Box 3724 Wellington 6015 NEW ZEALAND Email [email protected] Telephone 64-4-472-2733 Website www.treasury.govt.nz DISCLAIMER The views, opinions, findings, and conclusions or recommendations expressed in this Policy Perspectives Paper are strictly those of the author(s). They do not necessarily reflect the views of the New Zealand Treasury. The Treasury takes no responsibility for any errors or omissions in, or for the correctness of, the information contained in these Policy Perspectives Papers. The paper is presented not as policy, but to inform and stimulate wider debate. Acknowledgements: Ministry of Health, Ministry of Primary Industries, Boyd Swinburn, Elaine Rush, Geoff Simmons, Tony Blakely, Jim Mann, and Louise Signal for their contributions to the paper. ii Doc 1 Page 4 of 76 Released Table of Contents List of Figures iv 1 Executive Summary 1 2 Introduction 3 3 Overview of the problem 4 3.1 Obesity in New Zealand 4 3.2 Factors seen to underpin the problem 6 3.3 Costs and impacts on Living Standards 7 4 Actions currently undertaken 11 5 Regulatory measures 13 5.1 Regulatory options considered 13 5.2 Criteria for assessing regulatory measures 14 5.3 Interpretive front of pack labelling 14 5.4 Regulation of marketing to children 17 5.5 Pricing mechanisms 19 5.5.1 Sugar-sweetened beverage tax 20 5.5.2 Saturated fat tax 22 5.5.3 Removal of GST from fruit and vegetables 25 6 Recommendations 28 6.1 Recommended approach 28 6.2 Areas of further work 29 6.2.1 Sugar-sweetened beverage tax 29 6.2.2 Regulation of marketing to children 29 6.2.3 Front of pack labelling 29 7 Appendix 30 8 Reference List 34 iii Doc 1 Page 5 of 76 Released List of Figures Figure 1: Overweight and Obesity in the OECD (Sassi, 2010) 4 Figure 2: Obesity trends in New Zealand 2006-2013 (Ministry of Health, 2013). 5 Figure 3: Attributable burden for selected risk factors 2006 (Ministry of Health, 2013). 8 Figure 4: Treasury Living Standards Framework (Treasury, 2014) 9 Figure 5: Policy options, goals and desired outcomes 13 Figure 6: Example of Traffic Light labelling UK (Food Standards Agency Scotland, 2013). 15 iv Doc 1 Page 6 of 76 Released 1 Executive Summary This report assesses the regulatory responses appropriate for New Zealand to employ in order to address the growing problem of obesity. In 2013 the New Zealand adult obesity rate was 31 per cent, with a further 35 per cent overweight (Ministry of Health, 2013). This rate has increased threefold since 1977 representing an escalating problem. Obesity has significant impacts upon health and productivity costs, with the growing problem having serious implications for future economic growth and sustainability. It is important to understand how improvements in health outcomes can provide benefits to population wellbeing. Obesity is a complex problem with a number of inter-related causes, which are still not completely understood. The current problem in New Zealand is generally seen to stem from an obesogenic environment: an environment that facilitates and promotes weight gain. The current policy approach to obesity in New Zealand focuses on initiatives that aim to support and encourage individuals to lead healthier lifestyles and encourage the food industry to provide healthier products and inform consumers. The purpose of this paper is to investigate the role and effectiveness of a range of regulatory measures that the government could implement in response to the growing obesity crisis. The options considered are: • An interpretive front of pack labelling system • Regulation of marketing to children • A sugar-sweetened beverage tax • A saturated fat tax • Removal of GST from fruit and vegetables. The options focus on targeting the price and information aspects of the obesogenic environment. The tax and GST options have been analysed from a health policy perspective, rather than focusing on the precise mechanism (for example, excise tax vs. sales tax). Each measure has been selected due to international application and substantive evidence. From analysis, it is evident that promising areas for further work include a sugar-sweetened beverage tax, an interpretive front of pack labelling system, and regulation of marketing to children. A sugar-sweetened beverage tax would lead to a reduction in the consumption of sugar- sweetened beverages. According to Briggs et al. (2013) a 20 per cent tax on sugar- sweetened beverages could reduce consumption by 16 per cent. A UK study found a 20 per 1 Doc 1 Page 7 of 76 Released cent tax on sugar-sweetened beverages in the UK would have a 1.3 per cent reduction in the prevalence of obesity (Briggs et al., 2013). It would also have a number of health benefits, with a particular benefit on diabetes rates and dental health. There are concerns that the tax would have greater financial implications for lower socio-economic groups. However, some have suggested that this would be progressive in terms of health outcomes as low socio-economic groups have a higher incidence of obesity. There are a number of areas for further work, such as the mechanism by which the tax could be introduced, and a number of policy formulation and implementation issues to consider. Interpretive front of pack labelling is a policy that would provide the population with greater information about food composition and would therefore drive behavioural change among consumers to reduce consumption of products high in sugar, fat and salt. Evidence shows there can also be an effect on producers in the space of product reformulation. The main drawback of this policy is the impact on producers. A strong industry push back is to be expected due to producer losses, product reputation and reduced sales of foods; however, the gains in health impacts are seen to outweigh the costs. An area requiring further work in this policy is defining the optimal interpretive system of front of pack labelling for New Zealand, such as the ‘Health Star Rating’ or ‘Traffic Light’ systems.