Preventing Alcohol-related Harm in Australia - Department of Health

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While increasing the price through taxationis likely to lead to a reduction in per capitaconsumption, increasing the price of individualproducts may not necessarily achieve this goal.In some cases, product-based changes cancreate opportunities for new products anddrinking patterns that increase levels of harm.[68] In this context, it is important to recognisethat the production costs of alcohol productsvary considerably between product types(eg spirits are relatively inexpensive tomanufacture compared to beer and wineproducts) which in turn has a bearing on thecost price to consumers.Australia’s alcohol tax system can best beunderstood as a constantly changing reflectionof the history of alcohol consumption in Australia,and the status of various alcohol products.It also reflects changing powers of taxationbetween state and territory governments andthe Australian Government. As a consequence,different products – wine, spirits, beer, ciders,fortified wines – are all taxed differently. Theexcise duties arrangements can generally bedescribed as a volumetric tax system, becausethe amount of excise duty depends on thevolume of alcohol contained in the particularproduct. Wine equalisation tax can be describedas an ad valorem tax system, because the rateof tax depends on the value of the retail sellingprice of the particular product. Customs dutiesare a combination of both volumetric and advalorem systems. GST is set at a fixed rate of 10%of the product price, on top of all other taxes(see Table 7).Within some categories there are variousconcessions and exceptions. Smaller wineries,for instance, are largely exempt from their valueadded tax (the Wine Equalisation Tax) for allcellar door sales.Recent estimates show that the AustralianGovernment will collect over $6 billion as aresult of the production and consumption ofalcohol during the 2008/09 financial year.[68, 4]However, a substantial disparity exists betweenthe amount of tax revenue received by theAustralian Government from risky drinkingcompared with the overall amount spent inattempting to prevent harmful consumptionof alcohol. For example, it has been estimatedthat Australian adolescents (aged 12–17 years)spent approximately $217 million on alcoholicbeverages in 2002, netting the AustralianGovernment approximately $112 million in taxrevenue.[69] This means that for every dollarspent on alcohol interventions aimed atadolescents, the government receives around$7 in alcohol tax revenue.[69]The current taxation rates translate into a widevariety of taxation per standard drink of alcohol(see Fig. 13). For those who argue that alcoholshould be taxed according to the amount ofalcohol in each product and container, thecurrent system represents a massive distortionof this principle.Table 7: Summary of the types of alcohol taxesapplied by category of alcohol productBeer Spirits & RTDs Wine CiderGST Yes Yes Yes YesExcise duty Yes Yes No NoWET No No Yes YesCustoms duty (ad valorem) No Yes (imported) Yes (imported) NoCustoms duty (volumetric) Yes (imported) Yes (imported) No No24
$1.00$0.90$0.81$0.87$0.87Excise or WET payable per standard drink:$0.80$0.70$0.60$0.50$0.40$0.30$0.20$0.10$0.04$0.05$0.16$0.17$0.19$0.26$0.28$0.32$0.39$0.52$-Light beeron tapCask Wine Port, Sherry Mid strengthbeer on tapPackagedlight beerBottled Wine1Full strengthbeer on tapPackagedmid strengthbeerPackagedfull strengthbeerBottled Wine2BrandyPre-mixedspirits /RTDsWhistky,Rum,Vodka,LiqueursTypical ABV:2 12.5 20 3 2 14 5 3 5 14 37 3.0 - 9.0 22 - 43Figure 13: Tax payable per standard drink*of alcohol, various products, Australia, as at1 August 2008*Note: *Includes a 1.15% ABV excise-free concession for beer. WET payableper standard drink of wine is based on a four-litre cask of wine sellingfor $13 (incl. GST) [‘Cask Wine’], a 750ml bottle of wine selling for $15(incl. GST) [‘Bottled Wine 1’], a 750ml bottle of wine selling for $30(incl. GST) [‘Bottled Wine 2’] and a 750ml bottle of port selling for $13(incl. GST) [‘Port, Sherry’]. A standard drink is equal to 0.001267 litres or10 grams of pure alcohol.As noted above, Australia has been througha continuous process of change in relationto the taxation and pricing of various alcoholproducts. There are three changes that areparticularly interesting to note. In the late 1980s,states and territories adopted various formsof licensing for all alcohol sales. As part of thissystem, most jurisdictions offered low-alcoholbeer (less than 3.5% alcohol by volume) fora significant concession in fees. The licensefee concession translated into cheaper lowalcoholbeer and, in combination with intensemarket competition in the beer market andthe introduction of harm-reduction measuressuch as random breath testing, createdan ideal environment for low-alcohol beer.Producers recognised the benefit of investingconsiderable developmental and marketinginvestment into low-alcohol beer.As a consequence, low-alcohol beer increasedits sales very significantly and capturedapproximately 20% of the total Australianbeer market.[70]The Northern Territory’s ‘Living with Alcohol’program provides another example of howchanges in price through government taxationincreases contributed to a reduction in percapita consumption. In 1992, the NorthernTerritory government used a hypothecationapproach by placing a levy of 5 cents perstandard drink on the sale of alcohol productswith more than 3% alcohol by volumeand used the revenue to fund a range ofalcohol-prevention measures in the territory.[71] Evaluations of the ‘Living with Alcohol’program found that the increase in price hadcontributed to a major reduction in the levelof alcohol-related harm within the NorthernTerritory.[72, 73]Over the last 15 years, there have been a seriesof changes in the level of excise and taxationapplied to various forms of the ready to drink(RTD) product segment of the Australianalcohol market.25
Page 1: Preventative Health TaskforceNation
Page 4 and 5: Contents1 Introduction: changing th
Page 6 and 7: 1. Introduction:changing thedrinkin
Page 8 and 9: ModifiableDeterminants:Cultural Pla
Page 10 and 11: 2. Key trends in alcoholconsumption
Page 12 and 13: Figure 3: Drinking at risky/high ri
Page 14 and 15: 2.4 Alcohol prices andconsumer spen
Page 16 and 17: More males than females died from b
Page 18 and 19: Families and childrenIt is a realit
Page 20 and 21: Young AustraliansRates of risky dri
Page 22 and 23: Table 5: Key to the rating scales s
Page 24 and 25: 4.2 Regulating the physicalavailabi
Page 26 and 27: The distinction is important becaus
Page 30 and 31: These changes have resulted in majo
Page 32 and 33: 4.5 Treatment and early interventio
Page 35 and 36: number of RSA training programs hav
Page 37 and 38: Table 8: Alcohol advertising in Aus
Page 39 and 40: nThe effectiveness of the current s
Page 41 and 42: 5. Policy imperatives5.1 The state
Page 43 and 44: Table 10: Cost-effectiveness (avera
Page 45 and 46: There are some specific challenges
Page 47 and 48: thousands of Australians at the ear
Page 49 and 50: 21. Chikritzhs T, Catalano P, Stock
Page 51 and 52: 63. Gruenewald P, Freisthler B and

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