FARE has called for changes to Australia’s alcohol tax regime, a call which has received support from health stakeholders.
The Foundation for Alcohol Research and Education says the changes would deliver a $2.9 billion dollar revenue boost to the Government, and an even greater windfall for the health of the nation.
New economic modelling has found that a 10% increase to all alcohol excise, combined with changes that would tax wine more equitably, would result in a 9.4% reduction in alcohol consumption, with a corresponding reduction in alcohol harms, FARE says.
These alcohol tax changes would further reduce the growing burden of chronic disease.
FARE’s Pre-Budget Submission 2016-17 proposal would see wine and cider taxed according to the volume of alcohol, bringing wine into line with beer and spirits; before applying a 10% across-the-board increase on all alcohol excise.
The existing Wine Equalisation Tax would be replaced with a volumetric tax on wine and cider at a rate of $56.56 per litre of pure alcohol (halfway between full-strength draught beer and spirits), and the WET rebate scheme would be abolished.
Replacing the way in which wine is taxed in Australia would ensure a fairer tax system where wine, which currently represents 40% of all pure alcohol consumed but only 15% of alcohol tax collected, pays for its share of the resulting alcohol harms, says FARE.
Economic modelling by ACIL Allen Consulting and commissioned by FARE, forecasts such a change would generate $2.9 billion in revenue while reducing the total alcohol consumed by 9.4%.
“Reforming the alcohol tax system should be a no-brainer,” says FARE Chief Executive Michael Thorn.
“In fact nine separate Government reviews have recommended we do exactly that. Increasing taxes on alcohol would not only address the budget deficit but, as research shows, is also the most cost-effective way to reduce alcohol consumption and the resulting harms, particularly among young people and risky drinkers.
“Reform of Australia’s alcohol tax regime is long overdue and by wisely directing a proportion of that revenue we can start to address the high social cost of alcohol in this country; we can reduce the high levels of alcohol-related family violence, we can reduce the incidences of Fetal Alcohol Spectrum Disorders, and we can start to tackle this preventable health burden that is currently shouldered by the entire nation,” Thorn says.
The Public Health Association of Australia supported the call.
“This change could bring major benefits to Australia’s public health resources. Even modest increases in prices of alcohol can be expected to reduce violence and other related problems,” says PHAA CEO Michael Moore.
He cited Australasian College for Emergency Medicine data that shows alcohol is still having a disproportionate impact on Emergency Departments: for example, te ACEM survey conducted on Australia Day 2016 showed 15% of patients visited the emergency department due to alcohol related injuries.
“Younger people are more likely to be involved in alcohol-fuelled violence. By increasing the price of alcohol, teenagers and young adults will be less likely to consume large amounts of alcohol leading to violence,” says Moore.