19 March 2016

White coal

English food person Jamie Oliver believes that because his country is taxing sugar added into processed foods, Australia should as well. He put out a statement on his Facebook page, and Fairfax superjourno Latika Bourke thought she was doing some journalism by copying it and doing a quick Google search on sugar. Some people regard this as Excellent Journalism That Must Be Preserved but I disagree.

There was the expected backlash from big processed food producers, inevitably to be copied here but with added surprise even from journos with Google access; but that isn't the reason why a sugar tax won't work in Australia.

First of all - Australia is one of the last countries in the developed world that doesn't have a bill of rights, same-sex marriage, or a tax on carbon emissions. What makes anyone think we are ready for a sugar tax? The Treasurer is actively looking for ways to cut taxes rather than raise them, even with a supposedly massive and unsustainable debt.

Second, and more importantly, the reason why we won't have a sugar tax in Australia is because of the sugar seats.

Most famers vote Coalition and get taken for granted. Sugar farmers tend to be different, voting for parties that best represent their interests at a given election (i.e., swinging voters), as Tony Windsor would have all farmers do. Sugar cane is grown not in lush, rich soils, but on marginal lands where margins are thin and a break in government policy can mean the difference between surviving or going under. This has seen major parties offer subsidies and other largesse - sweeteners, if you will - to sugar farmers.

Australia has a significant domestic market for sugar, which arguably has peaked. Australian companies producing sugar (such as CSR, founded as the Colonial Sugar Refinery) have exited the market, beset by low and unpredictable profits and high transport costs. Sugar processors that were set up as farmers' co-operatives, like Tully Sugar or the early distillers of Bundaberg Rum, have sold out to foreign-owned conglomerates. There is a large and growing market in Asia for sugar; except for a heavily-subsidised sugar cane industry in the south-eastern US, most sugar-producing countries are developing countries that undercut Australian producers on price.

The free market is bracing for the sugar farmer. The (increasing) threat of cyclones hits them first and hardest in their communities, and they are among the last producers to recover when the debris is cleared away. Combined with wildly fluctuating profit margins, sugar farmers can find it difficult to get insurance or other support for long-term production - which is where the politicians come in.

Here is a map of where sugar is grown and processed in Australia. The federal electorates covering that area are:
  • Page (NSW)
  • Richmond (NSW)
  • Fairfax (Q)
  • Wide Bay (Q)
  • Hinkler (Q)
  • Capricornia (Q)
  • Dawson (Q)
  • Leichhardt (Q)
Flynn and Kennedy (Q) would be included were it not for their significant beef and mining hinterlands, which dilute the impact of the sugar-farming vote. You have to draw the line somewhere.

Those electorates have as much in common/are as diverse as the much-vaunted seats of western Sydney.

In that list of electorates above, all bar one (Richmond) was won by the Coalition in 2013. People with short political memories may be tempted to simply regard the rest as Coalition heartland, but all of those seats* had been held by the Labor Political Party when it was in government and it would be crazy not to have some overarching strategy for winning them back.

The Leader of the Nationals Political Party, who is also Minister for Agriculture, almost certainly has feelings for and on the sugar industry too. George Christensen, who holds a sugar seat, has been courting the dormant One Nation vote with his culture-war efforts; he would sooner have people pay zakat than a sugar tax. Any concerted effort for a sugar tax by an unlikely and unsustainable alliance of health policy wonks and small-government fetishists simply has no chance against major political parties backed by processed food industry donors/lobbyists. Besides, the small government fetishists have sold themselves out to the gigantic bludge that is their Northern Australia Dreaming.

This effect is felt at state level too. In 1998 Queenslanders sent 11 One Nation MPs to their state parliament: half were from sugar seats.

Media organisations other than the ABC are cutting back their coverage of regional areas. The 2016 election will see regional electorates play a more decisive role than any election since 1961. This is further proof that major media organisations are run and staffed by idiots. When you have to do your own political background on the events of the day, you realise just how grievously political journalism has failed, and how impertinent is the demand that those who have faile be maintained in the manner to which they've become accustomed.

The very idea that government might levy a tax on the sugar industry is frankly unbelievable. A reduction in their subsidies would have the same fiscal effect as a tax, but that won't happen either.

* Allowing for boundary changes etc over time


  1. christensen (could ever a politician have been less well surnamed?) is the living(?) breathing (apparently) example of why Australia needs a sugar tax.

    Unfortunately, as you have explained, the probability is down there with buckley's.

  2. "[Christensen] would sooner have people pay zakat than a sugar tax." That's very naughty, Andrew, and extremely funny. (I had to look it up, btw.)

  3. Fairfax processes sugar? The mill was bought by a Belgian company and one day it shut up shop. (Typically the site is now a Coles!) The local council for years distorted the land market by not allowing cane growing land to be subdivided. Cane farmers turned to growing mulch,etc. One loopy local councillor wants to run the cane tram (that for years ran through town even when the Bruce ran down the main street of Nambour) as a "historic" link between Aldi and Coles.

    1. And the growers were blocked from buying Nambour's mill as a co-operative. All good though, Coles, has the old mill site now.

  4. From the article by Bourke
    "Because sugar has no nutritional value and is linked to obesity, it is becoming an easier political target, but politicians are still cautious of going down this road because those on lower incomes tend to eat more sugary foods compared to those on higher incomes."

    Sugar adds flavor to cover up the crap taste of lower quality ingredients, and is a natural preservative also, it clearly has nutritional value because it makes you fat... it is literally fuel for your body, we are designed to store excess energy in case of leaner times ahead.
    Honestly reading that made me feel dumber, not informed at all. It's barely high school level analysis imo.

    Laughable to think that the Coalition would have any hard targets in this budget such as new taxes, they want to get re-elected not be "courageous" as the saying goes.

  5. "Nanny state" complaints annoy me, but frankly a sugar tax crosses that line to me where the government is simply punishing life choices. What I eat is not the government's business. The government doesn't reward me for exercising but wants to punish me for enjoying something sugary?

    I don't even drink sugary soft drinks and I still think this is silly. Why single out sugary soft drinks but not fried donuts and such? I can't approve of the precedent such a tax would set. Feels like soft-target revenue raising to me that crosses the line of what government should be doing.

  6. Yeah - looking forward to your take on the latest development


  7. Most (80%+) of the sugar grown here is exported. A tax probably wouldn't hurt growers much.


    Now, if we refined it into ethanol....

  8. John Wilkins24/3/16 3:34 am

    "He put out a statement on his Facebook page, and Fairfax superjourno Latika Bourke thought she was doing some journalism by copying it and doing a quick Google search on sugar."

    Latika Bourke is now living in London, reporting on #Auspol from the UK. You can expect more of this sh*t as she seeks to fit round British issues into square Australian ones.

  9. This comment has been removed by a blog administrator.