A new economic analysis has put a price tag on Australia’s approach to obesity – and the figure is confronting.

The ‘Cost of Inaction in Treating Obesity in Australia’ report, published by GlobalData and commissioned by Lilly Australia, reveals that overweight and obesity cost the Australian economy US$45 billion every year – equal to US$123 million every single day. That’s 1.7% of gross domestic product (GDP) and a recurring annual drain on productivity, healthcare budgets, and household incomes, that will only grow if left unaddressed.

Behind that number are 13.7 million Australian adults – two in three – who are living with overweight or obesity. The report finds that the financial toll on individuals and families reaches US$13.7 billion a year, as a result of reduced earnings, out-of-pocket medical costs, and the economic value of lives being cut short. Obesity-related conditions push people out of the workforce earlier, increase reliance on disability support payments, and generate healthcare costs that accumulate over a lifetime. The burden is not evenly shared: it falls heaviest on those with the most severe forms of the disease, and on communities where prevalence is highest and access to care is most limited.

The report is the most comprehensive analysis of its kind conducted in Australia. It quantifies that obesity is now Australia’s leading contributor to disease burden, having recently overtaken smoking. It is a chronic, progressive disease, and its economic consequences reach into every corner of the national economy.

Where the money goes

Of the US$45 billion cost to the economy, US$10.5 billion is consumed by direct medical costs, covering treatment for type 2 diabetes, cardiovascular disease, musculoskeletal conditions, and cancers that are caused by excess weight. That figure alone represents 3.6% of projected national health spending in 2025.

But the larger story sits outside the hospital system. Productivity losses account for US$34.5 billion annually, driven by reduced workforce participation, absenteeism, and presenteeism (the lost output that occurs when people are at work, but unable to perform at full capacity due to ill health).

Almost 240,000 fewer Australians are in the workforce as a direct consequence of obesity, and 22.4 million workdays are lost each year. For employers, the cost is US$20.4 billion annually in lost output. For government, the fiscal burden reaches US$21.2 billion when program costs and forgone tax revenue are combined.

"The question for policymakers is not simply what it costs to address obesity, but what it costs not to. Our analysis shows that inaction carries its own significant and ongoing price tag.”

Tim Dall

Consulting Executive Director at GlobalData, Study author

A burden that doesn’t fall equally

The report reveals sharp differences across states, industries, gender, and severity of disease. Among industries, healthcare and social assistance bears the highest presenteeism costs, followed by education and construction.

One of the report’s most striking findings concerns gender. Women account for 88% of workforce departures attributed to obesity. Employment losses for women are more than seven times those for men, and earnings losses are five times higher – a disparity compounded by the absence of federal discrimination protections based on weight.

“We often underestimate the hidden cost of living with obesity. It’s not just about healthcare expenses – it can affect career choices, confidence to pursue opportunities, and missed experiences.”

Dr Steven Lu,

GP

Prevention and treatment – not one or the other

The report’s authors are direct in their assessment: Australia needs a dual strategy. Prevention efforts are essential to slow rising incidence, but they cannot address the 6.6 million adults already living with obesity today. Treatment – including behavioural interventions, pharmacotherapy, and surgery – must be expanded, made affordable, and matched to individual clinical needs. The health risks reinforce the urgency: obesity substantially increases the likelihood of developing type 2 diabetes (by up to 12 times), cardiovascular disease, and multiple cancers, with risks rising at each stage of severity.

The report’s recommendations include:

  • A call for measurable targets for treatment uptake
  • Stronger coordination between Federal and State Governments on funding and service delivery
  • Sustained investment in Australian-specific research to ensure policy decisions are guided by local evidence
  • Deliberate action on equity and inclusion – particularly for First Nations communities, women, and populations in remote and lower socioeconomic areas, who carry a disproportionate share of the burden.

The cost of doing nothing

The title of the report is itself the argument. Every year that obesity goes undertreated, Australia absorbs a US$45 billion hit – not as a one-off shock, but as a quiet, compounding pressure on hospitals, workplaces, public budgets, and the daily lives of millions of people.

The evidence assembled in this report points in one direction: treating obesity as a national priority is not an expense. It is an investment in healthier people, stronger communities, and a more productive economy. The real cost is in choosing to wait.

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