Lives saved and federal budget windfall from alcohol tax reform: New Australian research

The National Alliance for Action on Alcohol (NAAA) is urging the federal government to overhaul the broken alcohol tax system, following new research published today in the Medical Journal of Australia showing the potential health and economic gains from reform.

The article published from the new research, “Estimated impacts of alternative Australian alcohol taxation structures on consumption, public health and government revenues”, compares four options for alcohol tax reform and the health and economic benefits for Australia that would flow from each.

“Our findings show that any of the changes to the current alcohol tax system would be a highly cost-effective health care intervention. One of the most effective options is to abolish the Wine Equalisation Tax (WET) system and replace it with a volumetric tax on wine, which is how beer and spirits are already taxed,” said lead author of the research Professor Chris Doran at the Hunter Medical Research Institute.

This would increase federal government taxation revenue by $1.32 billion, save $820 million in avoidable health care costs, and save lives, he said.

Professor Mike Daube, Co-Chair of the NAAA and Director of the McCusker Centre for Action on Alcohol and Youth said, “This research shows that alcohol tax reform is a win-win for the federal government. Fixing Australia’s chaotic alcohol taxation system will yield much-needed revenue for the government and savings to the health and police systems; it will also prevent an enormous range of health and social problems”.

Todd Harper, Co-Chair of the NAAA and CEO of Cancer Council Victoria said, “Alcohol takes a massive toll on the community, causing mental illness, violence, child abuse, and diseases such as liver cirrhosis and several types of cancer that could be prevented through some obvious changes to the alcohol taxation system.”

The research found that the most effective change to alcohol taxation, of the options examined, is to replace the Wine Equalisation Tax on wine and cider products with a new volumetric tax equal to the current excise on low strength off-site (takeaway) beer.

International studies have also shown the effectiveness of taxation in reducing alcohol problems in the population. A consistent finding internationally is that when alcohol prices increase, overall levels of consumption are reduced along with rates of risky drinking and alcohol related harm.