Alcohol tax reform is a major public health and social policy issue

The National Alliance for Action on Alcohol (NAAA) will use tomorrow’s Alcohol Tax Forum in Canberra to call on the Government to adopt a more consistent approach to alcohol taxation that will contribute to more responsible alcohol consumption and help reduce the health and social harms that are caused by alcohol.

The NAAA Forum will be attended by leading public health experts, health economists, and politicians including Greens Health Spokesperson Senator Richard Di Natale and the Labor Member for Fraser Dr Andrew Leigh, a former Professor of Economics at ANU, both of whom have a special interest in alcohol taxation.

AMA President, Dr Steve Hambleton, today questioned why the Government was reluctant to approach alcohol taxation reform and why it had excluded alcohol tax from next month’s Tax Forum.

“The Government has a strong record in public health with tobacco plain packaging and the alcopops tax, and it should be building on this momentum,” Dr Hambleton said.

“The evidence for the need for alcohol tax reform is considerable and beyond challenge. Most Australians drink alcohol in moderate amounts but many, including teenagers and young Australians, drink excessively at times and put themselves and others at risk of serious harm.

“The way that alcohol is currently taxed helps to sustain alcohol related harms by making it cheap and easy for people to drink excessively.

“The price of alcohol plays a big role in how much alcohol people consume, particularly for teenagers and young people. The cheaper it is, the more available it becomes.

“Forty per cent of red wine and 36 per cent of white wine sold through bottle-shops and liquor wholesalers is sold for less than $6 a bottle.

“Taxation isn’t just about raising money for the Government. It is a very effective way of encouraging people to change their behaviour, especially the harmful social and health behaviours that affect them, their family and friends, and others in the community,” Dr Hambleton said.

Chair of the NAAA, Professor Mike Daube, said the NAAA believes that all alcoholic drinks should be taxed – and priced – on the basis of the amount of alcohol in the drink.

“The higher the alcohol content, the higher the price – that is how it should work. The price of alcohol should track its potential to be harmful,” Prof Daube said.

“Urgent reform is needed to address the $36 billion in social and health costs that excessive alcohol use causes each year.

“Getting alcohol tax policy right is especially important if we are to change the drinking culture that has so many young people drinking to get drunk. What kind of signal does it send out to young people when they can get wine for less than $2 a litre – cheaper than bottled water?

“The Henry Review recommended a new approach to alcohol taxation based on volumetric or alcohol content-based tax and the Government’s own Preventative Health Taskforce has also called for taxes on alcohol to be overhauled.

“The NAAA has more than 50 member organisations, all of whom see the need for reform. We intend to send a strong message to the Government tomorrow that alcohol taxation reform is a major public health and social policy issue in this country and urgent action and leadership is required to improve health, restore quality of life, and save lives,” Prof Daube said.

The NAAA notes the call this week by the two large wine companies, Premium Wine Brands and Treasury Wines Estates, for the abolition of the Wine Equalisation Tax (WET) and the introduction of modified volumetric taxation, which is at odds with the views of Winemakers Federation of Australia.

The NAAA notes also the comments yesterday from Finance Minister Penny Wong. In relation to the Government’s budget strategy, the Minister told reporters in Canberra that: “…It also means understanding the longer term pressures, pressures in health, pressures in social security, pressures that will have to be dealt with by governments of all political persuasions in the decades ahead …

“But … tax reform is never finished, it is something you have to keep continuing …”

Background:

  • About 10 per cent of all Australians put their health at long-term risk by drinking too much, and 20 per cent drink at a level that is risky in the short term;
  • Each week, on average, 60 Australians die and a further 1,500 are hospitalised as a result of excessive alcohol consumption;
  • Excessive consumption fuels violence and significantly contributes to crime;
  • In 2007, one-third of 12-15 year old Australians and nearly 80 per cent of 16-17 year olds had drunk a full-serve of alcohol;
  • 80 per cent of alcohol consumed by people aged 14-24 is consumed in ways that put the drinker’s (and others’) health at risk;
  • Alcohol has been causally linked to more than 60 different medical conditions, including cirrhosis of the liver, inflammation of the gut and pancreas, heart and circulatory problems, sleep disorders, male impotency, eye diseases and conditions, and alcohol dependence; and
  • Alcohol consumption raises the overall risk of cancer, including cancer of the mouth, throat and oesophagus, breast cancer and bowel cancer.