Australia Needs to Reform Alcohol Taxes
CANBERRA – Alcohol consumption in Australia could be lowered if the taxes on cheap wines are raised to the same level as applied to other alcohols.
The government of Australia could raise its tax revenues by AUD 1.3 billion, slash health care spending by AUD 820 million, and also reduce alcohol consumption levels in the country by 1.3 percent by overhauling the national system for taxing alcohol, according to new research published on October 28th in the Medical Journal of Australia.
Currently the taxes applied to the sale of beer and spirits in Australia is based on the type of alcohol and the alcoholic strength of the drink, while wine is taxed according to its retail value.
The results of the research showed that under the present system, the taxes applied to high-quality and premium wines is much higher than the taxes levied on the sale of low-cost high-volume wines, with the average bottle of wine being taxed at AUD 0.33 per standard drink, while a 4 litre cask of low-quality wine being taxed at AUD 0.08 per standard drink.
In comparison, most beers in Australia are taxed at between AUD 0.30 to AUD 0.45 per standard drink, while spirits and pre-mixed spirit-based drinks are taxed at almost AUD 1 per standard drink.
The authors of the report suggested that the taxation of wine be switched to a volumetric system like beer and spirits, with drinks being taxed at a rate corresponding to their alcohol content.
Moving to a volumetric approach will boost the tax take from alcohol sales, while discouraging binge drinking and alcohol abuse, as consumers will no longer have access to overly cheap wines.
The call to overhaul the taxation of alcohol was met with immediate support from health groups in the country, with the National Alliance for Action on Alcohol, a coalition of 70 health groups, saying that the move was an obvious change which will have a tangible effect on the toll that alcohol takes on the community.
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