Economic Cost of Obesity in Australia

Obesity imposes a major economic burden on Australia. According to The Economic Costs of Obesity, an executive summary prepared by Access Economics for Diabetes Australia, obesity cost the Australian economy an estimated $3.767 billion in financial costs in 2005, with the total rising to $21 billion when lost wellbeing was included. This page explains the report’s main findings and links to the downloadable PDF.

The report estimated that 3.24 million Australians were obese in 2005, including 1.52 million males and 1.72 million females. It also noted that obesity affects both adults and children, with more than 280,000 Australians aged 5 to 19 classified as obese at the time.

What the report says about obesity in Australia

The executive summary defines obesity as excessive body fat, measured for adults here as a body mass index of more than 30. The report focuses on obesity rather than the broader category of overweight, meaning its estimates do not capture the full economic cost of all excess body weight.

It also warned that obesity prevalence appeared to be increasing. Under a baseline projection, 4.2 million Australians were forecast to be obese by 2025. If historical growth rates continued, that figure could rise to 7.2 million.

Health problems linked to obesity

The report linked obesity to a higher risk of serious chronic disease and premature death. Conditions associated with obesity included type 2 diabetes, cardiovascular disease, osteoarthritis, and several cancers including colorectal, breast, uterine, and kidney cancer.

Its estimates suggested that in 2005 obesity contributed to 102,204 cases of type 2 diabetes, more than 379,000 cases of cardiovascular disease, more than 225,000 cases of osteoarthritis, and 20,430 cases of cancer in Australia.

Economic costs of obesity

The report broke the financial cost of obesity into several components. Productivity losses were the largest category at $1.693 billion, followed by health system costs at $873 million and carer costs at $804 million. Deadweight loss from transfers was estimated at $358 million, with other indirect costs adding a further $40 million.

When these direct financial costs were combined, the total came to $3.767 billion in 2005. The report then placed a further $17.246 billion value on the burden of disease and lost wellbeing, bringing the total cost to just over $21 billion.

Who bears the cost

The report found that the financial costs of obesity were spread across individuals, families, governments, employers, and the wider community. Of the financial cost alone, individuals bore 29.1%, family and friends 16.4%, the Federal Government 37.0%, State Governments 5.0%, employers 0.1%, and the rest of society 12.4%.

When lost wellbeing was included, the burden shifted much more heavily toward individuals because of the personal impact of disability, reduced quality of life, and premature death.

Why this report still matters

Although this executive summary was published in 2006 using 2005 estimates, it remains useful as a reference point for understanding how obesity affects not just health outcomes but also national productivity, public spending, care needs, and quality of life. It shows that obesity is not simply an individual medical issue. It has broad economic and social consequences across Australia.

Download the executive summary PDF

You can access the original document here:

Download The Economic Costs of Obesity Executive Summary (PDF)

This PDF is the executive summary of the report prepared by Access Economics for Diabetes Australia in October 2006.

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