Post by Chips on May 2, 2008 11:14:54 GMT 9.5
Increase tax on premixed, and drinkers just swap to cheaper alcohol
The facts are all too often thrown out the window when the issue of alcohol taxes is up for debate.
The Federal Government's claim that a 70 per cent increase to the excise applied to premixed or ready-to-drink (RTD) alcohol products will reduce consumption among young Australians and raise a further $2 billion in taxes over the next four years is fundamentally flawed.
Let's deal with the facts.
The level of alcohol consumption in Australia has not changed over the past 20 years - even among young drinkers; the majority of RTD consumers are not teens, but aged in their 30s and 40s; RTDs were already taxed at rates significantly higher than beer and wine; and drinkers facing price rises revert to cheaper alternatives.
International experience predicts a dismal failure for this regressive tax. In 2004 the German Government increased its RTD tax, yet by 2007 the number of German youths consuming alcohol had increased above 2004 levels.
Young German drinkers simply bought cheaper alternatives, namely beer and wine. This will be the case in Australia.
The Distilled Spirits Industry Council of Australia seeks to work in partnership with government to reduce excessive alcohol consumption.
However, one must conclude from the claim by the Health Minister, Nicola Roxon, that there will be a $2 billion windfall, that she also acknowledges there will be no reduction in the level of RTD consumption.
The big question is why the tax increase is being applied only to RTDs? What about beer and wine?
These products are taxed at considerably lower rates than premixed alcohol products - 14 times lower in the case of cask wine. The time has come for this Government to treat all alcohol equally and accept alcohol content as the defining factor for taxation, regardless of whether the product is brewed, fermented or distilled.
It is also time for Australians to accept that a tax on RTDs of 84 cents a standard drink - which is 47 to 78 cents a standard drink higher than the tax applied to beer and wine - is illogical and will achieve limited, if any, long-term community benefit.
Gordon BroderickExecutive director, Distilled Spirits Industry Council of Australia
The facts are all too often thrown out the window when the issue of alcohol taxes is up for debate.
The Federal Government's claim that a 70 per cent increase to the excise applied to premixed or ready-to-drink (RTD) alcohol products will reduce consumption among young Australians and raise a further $2 billion in taxes over the next four years is fundamentally flawed.
Let's deal with the facts.
The level of alcohol consumption in Australia has not changed over the past 20 years - even among young drinkers; the majority of RTD consumers are not teens, but aged in their 30s and 40s; RTDs were already taxed at rates significantly higher than beer and wine; and drinkers facing price rises revert to cheaper alternatives.
International experience predicts a dismal failure for this regressive tax. In 2004 the German Government increased its RTD tax, yet by 2007 the number of German youths consuming alcohol had increased above 2004 levels.
Young German drinkers simply bought cheaper alternatives, namely beer and wine. This will be the case in Australia.
The Distilled Spirits Industry Council of Australia seeks to work in partnership with government to reduce excessive alcohol consumption.
However, one must conclude from the claim by the Health Minister, Nicola Roxon, that there will be a $2 billion windfall, that she also acknowledges there will be no reduction in the level of RTD consumption.
The big question is why the tax increase is being applied only to RTDs? What about beer and wine?
These products are taxed at considerably lower rates than premixed alcohol products - 14 times lower in the case of cask wine. The time has come for this Government to treat all alcohol equally and accept alcohol content as the defining factor for taxation, regardless of whether the product is brewed, fermented or distilled.
It is also time for Australians to accept that a tax on RTDs of 84 cents a standard drink - which is 47 to 78 cents a standard drink higher than the tax applied to beer and wine - is illogical and will achieve limited, if any, long-term community benefit.
Gordon BroderickExecutive director, Distilled Spirits Industry Council of Australia