In its 2026–27 Pre-Budget Submission, the AMA says obesity has now overtaken tobacco as the leading risk factor for disease burden in Australia. It argues that reducing sugary drink consumption is one of the most effective prevention measures available.

Australians currently consume more than 2.4 billion litres of sugary drinks each year. The AMA says regular intake is linked to poor dental health, obesity, and other chronic diseases.

The proposal suggests a tax of 50 cents per 100 grams of sugar in selected beverages. This would add around 20 cents to a standard 375ml soft drink and encourage both consumers and manufacturers to reduce sugar intake.

The AMA estimates the measure could cut sugar consumption by about 2kg per person each year, generate around $3.6 billion in revenue over four years, and drive product reformulation by industry.

The organisation says international evidence supports such taxes, with more than 130 jurisdictions already implementing similar policies. It also points to support from health experts and previous parliamentary inquiries into diabetes.

The AMA says the upcoming federal budget is a key opportunity for the government to adopt stronger preventative health measures to reduce long-term pressure on hospitals and primary care services.