Estimated impacts of alternative Australian alcohol taxation structures on consumption, public health and government revenues.

Journal article

OBJECTIVE: To examine health and economic implications of modifying taxation of alcohol in Australia. DESIGN AND SETTING: Economic and epidemiological modelling of four scenarios for changing the current taxation of alcohol products, including: replacing the wine equalisation tax (WET) with a volumetric tax; applying an equal tax rate to all beverages equivalent to a 10% increase in the current excise applicable to spirits and ready-to-drink products; applying an excise tax rate that increases exponentially by 3% for every 1% increase in alcohol content above 3.2%; and applying a two-tiered volumetric tax. We used annual sales data and taxation rates for 2010 as the base case. MAIN OUTCOME MEASURES: Alcohol consumption, taxation revenue, disability-adjusted life-years (DALYs) averted and health care costs averted. RESULTS: In 2010, the Australian Government collected close to $8.6 billion from alcohol taxation. All four of the proposed variations to current rates of alcohol excise were shown to save money and more effectively reduce alcohol-related harm compared with the 2010 base case. Abolishing the WET and replacing it with a volumetric tax on wine would increase taxation revenue by $1.3 billion per year, reduce alcohol consumption by 1.3%, save $820 million in health care costs and avert 59 000 DALYs. The alternative scenarios would lead to even higher taxation receipts and greater reductions in alcohol use and harm. CONCLUSIONS: Our research findings suggest that any of the proposed variations to current rates of alcohol excise would be a cost-effective health care intervention; they thus reinforce the evidence that taxation is a cost-effective strategy. Of all the scenarios, perhaps the most politically feasible policy option at this point in time is to abolish the WET and replace it with a volumetric tax on wine. This analysis supports the recommendation of the National Preventative Health Taskforce and the Henry Review towards taxing alcohol according to alcohol content.

Authors: Doran, C; Byrnes, J; Cobiac, L; Vandenberg, B; Vos, T

• Journal: Medical journal of Australia
• Volume: 199
• Issue: 9
• Pages: 619-622
• Publication date: 2013-11-01
• DOI: 10.5694/mja13.10605
• EISSN: 1326-5377
• ISSN: 0025-729X
• Language: English
• Keywords: Alcoholic Beverages; Humans; Federal Government; Health Care Costs; Health Policy; Models, Economic; Taxes; Wine; Alcohol Drinking; Australia; Quality-Adjusted Life Years