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Australia's bottom line suffers under weight of obesity

The world of Extreme User Pays: It starts with higher premiums for fatties, and ends with higher school fees for stupid kids, and a beauty-parlour loading system for the ugly.

The world of Extreme User Pays: It starts with higher premiums for fatties, and ends with higher school fees for stupid kids, and a beauty-parlour loading system for the ugly. Photo: Jenny Evans

I don’t want to lie to you. Releasing a book on weight loss in the same month you conceive your first child is not the best idea I’ve ever had, as my recent royalty statements from my publisher attest.

Who could have predicted readers would be more interested in the economics of zombies and bananas than in the weight loss advice of a puffed up pregnant economics journalist with cankles​ to rival the width of the oldest trees in the Daintree? And why didn’t you tell me before I went to the trouble of penning a second book?

But economics has emerged as the newest ally in the fight against Australia’s growing obesity epidemic.

A new report by PricewaterhouseCoopers for Obesity Australia published this week makes the economic case for tackling obesity.


It finds that, without action, one in three Australians will be obese by 2025, up from about one in four.

What surprises me about that figure is that it is not higher.

Structural changes in our economy have seen the rise of powerful food companies producing highly calorie, dense and cheap processed foods which are available 24/7.

Meanwhile, the rise of car ownership and desk-bound jobs has reduced our daily need for calories.

Obesity is a complex issue and a highly personal one. But from a high level analysis, this dramatic increase in calories in versus calories out more than explains our obesity crisis.

The effects are being felt far and wide.

PwC estimates the cost of obesity in Australia — both direct and indirect — will weigh in at $88 billion over the coming ten years.

The direct costs are clear: increased trips to the GP and specialists for weight-related illness, higher use of pharmaceuticals to manage obesity related health conditions, higher hospitalisation rates and the growing bill for private and publicly funded weight loss interventions like bariatric​  surgery.

Combined these direct costs of obesity add up to $3.8 million a year.

The indirect costs are less visible but even more sizeable.

Obesity, and its related medical conditions like diabetes, heart disease and hypertension, impact a person’s ability to work. People with obesity were found to be 17 per cent more likely to be absent from work than non-obese people. They were also less likely to be able to fully function when at work, representing an indirect cost to employers.

Governments shoulder the burden of indirect subsidies, including disability payments, higher carer costs and unemployment benefits.

But by far the biggest indirect cost the report found, draining government coffers of $3.4 billion a year, is foregone tax revenue from the fact that people with obesity work less.

According to the 2011-12 Australian Health Survey, unemployment rates for obese and non-obese people are similar.

However, people with obesity have, on average, 4.4 per cent lower labour force participation rates and 4.2 per cent lower employment rates than non-obese people.

People with body mass indexes that put them in the severely obese categories have particular trouble finding work.

These indirect costs were found to cost the economy $4.8 billion, giving a total economic cost of obesity of $8.6 billion a year.

And that is a conservative estimate.

It doesn’t include the cost to individuals of foregone earnings (estimated at around $11.8 billion)  or the hard to quantify effect on wellbeing, which the Herald/Age Lateral Economics Index has put as high as $120 billion in lost collective wellbeing a year.

Nor does it include the cost to individuals of mental ill health or premature death. People with obesity are twice as likely to suffer depression as those who are not obese, although the direction of causation is not clear, and probably runs both ways.

And sadly, obesity was responsible for about 9500, or 7.2 per cent, of deaths in 2003. How do you put an economic value on life?

But it’s not all bad news.

The most powerful finding of the PwC report is that spending money on tackling obesity actually saves money in the long run.

In the economist’s lingo, spending on obesity prevention and treatment has a benefit cost ratio of 1.7 — for every dollar you spend, you get back $1.70.

PwC has costed​ a list of obesity interventions that would cost $1.3 billion over 10 years but ultimately save $2.1 billion for society.

They include parental and school education programs, publicly funded bariatric​ and pharmaceutical treatments, incentives for the reformulation of processed foods to be less sugary, salty and fatty, better uptake of the government’s voluntary Health Star Rating System and new taxes on unhealthy foods.

Even with theses interventions, we won’t achieve the World Health Organisation goal to freeze obesity levels at 2010 levels. But we could prevent a quarter of a million Aussies from being obese by 2025.

Unfortunately there are no easy answers when it comes to solving our obesity epidemic. 

Calls for a holistic, multifaceted approach to tackle environmental, epigenetic and lifestyle factors aren’t very sexy. They certainly don’t fly off the bookshelves.

Obesity Australia, the lobby group which commissioned the PwC research, wants a National Obesity Strategy to tackle the issue, plus more research into the crucial area of preventing weight re-gain.

But our battle against the bulge must continue. Our waistlines, and the economy, will thank us for it. 

Twitter: Jess_Irvine

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