Health lobby groups in Australia have called for a ban on the advertisement of junk food to children and for the introduction of a "traffic light" labeling system on labels.

The Obesity Policy Coalition said the Australian government needed to act to halt growing obesity among children.

The group - representing the Cancer Council Victoria, Diabetes Australia (Victoria) and the World Health Organisation's Collaborating Centre for Obesity Prevention at Deakin University - also outlined plans to increase the tax levied on sugary breakfast cereals.

Jane Martin, a policy adviser for the coalition, said high-sugar cereals should be subject to a similar level to tax as cakes and pastries.

"Some cereals being marketed are up to 40 per cent sugar, which in reality is no different to the levels of sugar in some confectionery products and chocolate biscuits," Martin told The Australian newspaper.

Martin also reportedly criticised marketing campaigns for "influencing" children through TV, Internet and text message campaigns. Food labels, in their current form, also confused parents, she said.

"Consumers face a difficult task, because we know that they don't really understand very well the nutrition panel on the side of the pack and that's why we're proposing for something simpler to be implemented, which will help direct them to healthier choices," Martin was quoted as saying in The Sydney Morning Herald newspaper.

The coalition is believed to have held talks with both main political parties.

Health Minister Tony Abbott admitted childhood obesity was "a very important issue", but said product labelling should be left to the market.

"The Government doesn't have plans to impose any new taxes, and I encourage industry to continue prominent front-of-packet labelling of the energy content of food," Abbott said.