Alcoholism & Addiction

Australian Government Criticized for Removing Alcohol Tax Reform from Agenda

Australia’s federal government has been criticized for taking alcohol tax reform off the agenda despite community concern about the impact of alcohol-fueled violence. The AAP reports that the Alcohol Education and Rehabilitation Foundation said the decision to overlook the Henry review’s recommendation for tax reform ignored the enormous social and economic cost posed by alcohol abuse.

Foundation director David Crosbie said the decision was at odds with one of the government’s stated priorities in the area of preventative health.

"Alcohol abuse is second only to smoking in the number of preventable deaths caused by substance misuse," he said on Monday, adding it cost the economy more than $15 billion each year.

The Henry review had recommended a volumetric tax on all forms of alcohol, saying social costs of alcohol abuse were not effectively targeted by current tax and subsidy arrangements.

Under the present system, cheap wine is taxed at a much lower rate than other forms of alcohol.

The price of a two liter cask of wine (costing $10.99) includes roughly $1.59 of tax while the same volume of alcohol in full strength beer attracts $7.48 in excise, and in spirits the tax is about $16.45.

"The current system is grossly inequitable," Crosbie said.

Taxation was a powerful evidence-based strategy that was able to impact upon the harmful consumption of alcohol. "In over 50 peer reviewed studies around the world, taxation and price increases have been proven to lower consumption rates."

The government ruled out any immediate changes to taxes on alcohol, pointing to a wine glut and industry restructuring that was under way.

Winemakers predictably applauded the decision, saying any increase in taxes on wine would have devastated the industry amid its toughest period in more than two decades.
Chief of the Winemakers’ Federation of Australia, Stephen Strachan, said taxing wine in the same way as packaged beer would have seen 95 per cent of wine increase in price, sale volumes fall by 34 per cent and about 12,000 jobs lost.

"We don’t deny that alcohol misuse is a problem, but we have to target the causes, not make ordinary Australians pay because we can’t think of any better solutions," he said.


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