FORGET budget cuts - the real way to save the nation some serious cash is to drink more milk.

According to research conducted by the University of South Australia, the potential health-care savings associated with consuming the recommended amount of dairy are about $2 billion.

Researchers from the university's health economics and social policy group reviewed the benefits of dairy consumption and calculated the health-care expenditure in Australia due to low dairy consumption.

It is estimated 65 per cent of Australians consume less than the recommended serves of dairy foods.

"The largest health-care savings were associated with the maintenance of a healthy body weight," study co-author Prof Leonie Segal said.

"Other calculated health-care savings came from dairy's beneficial effects on type 2 diabetes, heart disease, stroke, hypertension and osteoporosis."

This research was presented at the Nutrition Society conference in New Zealand last week. It found a strong justification for developing policies to increase dairy consumption to reduce the costs of diet-related disease.

Dairy Australia dietitian Glenys Zucco said the study reinforced the understanding that dairy foods had far-reaching benefits.