Advocates say a 20 per cent tax on sugary drinks will save 1,600 lives over 25 years, while reducing the social costs of diabetes, heart disease and stroke.

But the soft drinks industry says nothing would happen, because people would just replace soft drinks with other sources of sugar or fat.

Health groups, including the Obesity Policy Coalition, the Cancer Council and Diabetes Victoria, have released modelling to show what a soft drink tax could achieve in Australia.

The experts found that a 20 per cent tax on soft drinks would drive down consumption, while raising $400 million a year for obesity prevention.

The study said the tax could save the health system $29 million a year.

“There would be a 12.6 per cent decrease in consumption and the flow-on effects from that relatively small decrease across a population over time would result in fewer cases of diabetes, heart disease and stroke and over time it would also save lives,” says Jane Martin from the Obesity Policy Coalition and co-author of the study.

“Around 1,600 lives potentially would be saved over 25 years.”

Previous studies have shown that a 20 per cent tax could reduce total energy consumption by about 10,000 kilojoules per person per year, which would lead to weight loss of about 0.93 kilograms.

“With one-in-four children and 67 per cent of adults now overweight or obese, we need decisive action by government to address the growing health burden of overweight and obesity in this country,” Ms Martin said.

“Even a small change in consumption can have a big impact over time; a small change in body mass index and weight can have a big impact on someone's health outcomes.

“This would have a bigger impact on people who are high consumers, so particularly young people, and they're more price sensitive.

“The potential to change behaviour in adolescents ... who are high consumers, drink a lot of soft drink, that can be very impactful because that can take them through the rest of their life and change habits early.”

Australia’s top sugary drinks lobby - the Australian Beverages Council – says it is impossible to make conclusions about soft drink taxes.

“There is no discernible impact on obesity from a soft drink tax,” beverage council chief Geoff Parker has told the ABC.

“Because sugar, and sugar in soft drinks, is not a unique contributor to overweight [sic] and obesity.

“People who consume more kilojoules than what they burn throughout the course of the day are going to put on weight regardless of where those kilojoules come from.”