Australia’s obesity epidemic will cost nearly $90 billion a year in 10 years and crash productivity without government help, says a new bipartisan report.
Released on Monday, the report from the progressive McKell Institute and conservative Menzies Research Centre predicts that the economic cost of obesity will hit $87.7 billion a year by 2032 and $228 billion annually by 2060.
Obesity already costs the economy $39 billion annually and $320 million per year in unnecessary hospitalisations, it says.
The report says two-thirds of that cost will be linked to lost productivity, including absenteeism, reduced workplace performance and premature death.
Obesity’s link to diseases such as type 2 diabetes, cardiovascular disease and at least 13 cancers make obesity and overweight conditions make it the largest single driver of preventable health loss, the report says.
McKell Institute Chief Executive Officer Edward Cavanough says: “Obesity is undermining productivity, increasing healthcare costs and widening inequality”.
“Addressing this crisis requires a co-ordinated national strategy and serious policy leadership across all parties and governments.”
Menzies Research Centre Executive Director David Hughes says: “Obesity is not just a health challenge – it is an economic and social challenge as well.
“If we invest in preventative health now, we can reduce long-term costs to taxpayers, ease pressure on businesses, and build a healthier, more productive society.”
Click here to read about the national obesity strategy for 2022-2032
OBESITY REPORT FINDINGS
The report shows that two in three Australian adults are now overweight or obese, placing Australia among the worst-affected countries in the OECD.
It also found 1 in 4 children aged 5–17 years-old are overweight or obese and that 80% of obese adolescents become obese adults; more than one million Australians now have severe obesity.
Despite that, Australia spends only around 2% of its health budget on prevention, well below the OECD average.
The report calls for urgent action such as mandatory health labelling on packaged foods (currently only 36% of products carry the Health Star Rating but the target is 70% as well as encouraging businesses to invest in employee health programs.
It calls for a National Obesity Co-ordination Framework that has achievable targets, greater subsidies for new anti-obesity medications and more prevention funding to match OECD standards.
REGIONAL IMPACT
The report also says regional Australia has been hit harder due to a growing health and economic gap between city and country.
Regional towns and cities are more exposed to differences in health care, food availability and economic conditions.
“Obesity disproportionately affects socioeconomically disadvantaged groups and rural and regional populations, reinforcing health inequities,” the report says.
The research found children from lower-income households are nearly twice as likely to experience it as those in higher-income households, reflecting the broader link between health outcomes and economic disadvantage.
Cavanough says: “Australians living outside the major cities are often facing higher health risks while having fewer services available to help manage those risks.
“Addressing (it) is not just about individual behaviour; it requires policy responses that recognise the different challenges facing regional communities.”
Hughes says: “When obesity leads to poorer health and reduced workforce participation, regional communities can feel those effects very quickly.
“This is not just a health issue: it also affects productivity, economic opportunity and long-term prosperity.”
The report is the first time the Institute and the Centre worked together on a major research project.
