Exclusive: A healthier society is a more productive society. Governments know that. It’s time they started acting on it.
“Prevention is better than cure” is an axiom as accurate as it is enduring.
Never more so than as the nation’s decision makers at the Economic Reform Roundtable wrestled with the many reasons their policies have underperformed so drastically that their legacy could well be to bestow lower standards of living, health and wellbeing on our children.
It is understandable that the big focus for the Roundtable should have been productivity, budget sustainability and tax reform.
On each front, our governments have failed us for years.
In 2022, the Albanese government launched Australia’s first national wellbeing framework, Measuring What Matters. If we are serious about improving wellbeing alongside productivity and GDP, then boosting investment in prevention must be a priority.
Despite being a key pillar of the Productivity Commission’s five inquiries into boosting Australia’s productivity, health was largely missing from the discussion in the lead up to the Roundtable – even though the evidence is that the healthier we are, the more productive as a community we will be.
According to the Commonwealth Department of Health, Disability and Ageing, nearly 40% of disease could be prevented by reducing risky lifestyle factors. Every dollar invested in preventive health yields around $14.30 in healthcare savings and broader economic benefits.
Despite this, Australia currently invests just 2% of our health budget on prevention – significantly less than comparable nations like the UK and Canada – undermining progress towards national health targets.
And we know prevention works.
Take a look at any picture of a sporting crowd from the 1970s – nobody is wearing a hat against the summer sun. “Slip, slop, slap” had remarkable success in addressing the risks of over-exposure to the sun.
As yet, we have not had the same success in addressing some of the most influential determinants of health.
Obesity rates in Australia have tripled since 1980; the prevalence of diabetes has nearly tripled since 2000 and excessive consumption of sugar – much of it from sugar saturated drinks – is a key driver.
Apart from the personal consequences of ill health, spending on chronic disease is reliably estimated to cost no less than $82 billion a year, nearly half of all total health expenditure, as well as having a significant impact on productivity.
The Australian Institute of Health and Welfare estimates that lost labour force participation from chronic diseases will cost $67.7 billion by 2030, representing 459,000 lost productive life years.
The Productivity Commission has estimated that GDP could increase by $4 billion a year if the health of people in fair or poor health could be improved.
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So, what are we waiting for?
The Economic Reform Roundtable has provided opportunity for the Australian government to increase much-needed investment in preventive health through evidence-based measures like sensible tax reform.
The introduction of a sugary drinks reformulation levy would follow the lead of more than 130 countries and recommendations of the Public Health Association of Australia, ACOSS, the AMA and many more.
Such levies have led to reductions in obesity rates and decreased hospital visits for dental surgery among children. The UK levy has seen soft drink manufacturers reduce sugar levels by nearly 50%.
Last year, the House of Representatives Standing Committee on Health, Aged Care and Sport, of which I was a member, recommended a 20% levy on sugar-sweetened beverages, which would have enormous health benefits, and according to AMA modelling, would return $4 billion a year to the government for investment in preventive health initiatives.
In the same way, introducing a national gambling profits levy on gambling operators would generate substantial revenue to fund harm minimisation and treatment programs, directly tackling the root causes of gambling harm.
This was a key recommendation of the Standing Committee on Social and Legal Affairs report – “You win some, you lose more” in 2023.
Gambling is a significant public health issue we are not effectively addressing. Australians lose more than $31 billion a year on gambling – the highest per capita gambling losses in the world. Gambling harm damages families, relationships, physical and mental health, employment and productivity.
This has to change.
Alcohol consumption also has significant health and economic costs. The AIHW estimated the social cost of alcohol use in Australia was nearly $67 billion in 2017–2018. Of this, $4 billion were workplace costs.
Our Wine Equalisation Tax currently under-taxes cheap, high-strength wine, encourages excessive consumption and undermines national efforts to reduce alcohol-related harm and costs to the health system.
As recommended by the Productivity Commission, the Foundation for Alcohol Research and Education and PHAA, switching to a volumetric tax model would align with the government’s commitment to preventive health by supporting better health outcomes and bring Australia into alignment with international best practice.
Making a strategic, well-resourced investment in prevention through such policies is not only a public health imperative, it is a smart economic choice.
The experts acknowledge that a healthier society is a more productive society.
So should the recommendations of the Economic Reform Roundtable.
Dr Sophie Scamps MP is the Independent Member for Mackellar.