It seems Fairfax journos want to make everything more expensive except their employers’ share price. Take the case of “Econogirl” Jessica Irvine, who once again takes up the topic of weight loss – a subject she considers important, because it happened to her, and related to economics because she once read a copy of Freakonomics, and hey, that really made her like, think, you know?
On one level, it’s just a typical Irvine effort: the re-hashed press release, the casual Gen-Y phraseology betraying the lack of any grown-ups in the Herald newsroom (“Why do we eat so much crap?” “How’s that working out for us?” “Competitive group sports … sucked”), and so on. But then this:
A green paper released this week by the federal government on its National Food Plan hints at one reason. Obviously we eat lollies, burgers and chips because they taste great. But we also eat them because they are readily available and, wait for it, cheap.
”Analysis of Australian food expenditure data suggests a substantial proportion of the Australian population is severely restricted in its capacity to make healthy food choices and achieve a healthy lifestyle. Compounding the situation is evidence that the cost of healthy (low energy-density, high nutrient-density) foods are increasing disproportionately when compared with the cost of higher energy-density, relatively nutrient-poor foods.”
Too much cheap food: a problem every generation in history prior to ours would have – and in many cases did – kill for.
And the solution?
One obvious solution from economics would be to increase the cost of fatty, sugary or excessively calorie-dense foods. In Britain, the opposition Labour Party is considering a policy of taxing sugary drinks. Last year, Denmark became the first country to impose a ”fat tax” of about $3 per kilo of saturated fat, levied on producers and sellers and passed on to some degree to customers through higher prices.
Could the hip-pocket nerve be the solution to our expanding waistlines?
You betcha! Irvine hedges her bets a bit…
All taxes impose some cost on society in terms of administration. Can we prove that the benefits through improved health would outweigh those costs?
No, nor can we even be sure all this nannying would save us money. In fact, some studies suggest just the opposite. Irvine then goes on to shoot her argument squarely in the foot (hey, if her panic-mongering is to be believed, diabetes would have gotten it eventually) by saying such a tax could be modelled on the (wait for it!) carbon tax:
Governments could use the revenue from a fat tax to compensate the low income earners, who would still find fatty foods relatively more expensive. Sound familiar? It’s the same logic as the carbon tax. Even if you compensate people for the full effect of higher prices, by raising the relative price of a good, consumers will want to consume relatively less of it. That people respond to prices and incentives is one of the most basic concepts of economics.
Is Jessica Irvine the last person who believes the carbon tax is anything but a big, bureaucratic engine to move money from the relatively prosperous to the poor? Apparently.
Of course, virtuous St Jessica never needed such a fat tax to drop her extra baggage:
Having battled the bulge myself, with some success …
It’s a shame we’re not all as smart and wise as Ms Irvine.