Cheap Wine To Rocket Up By 235 Percent Under New Alcohol Tax Model

08/03/2016 3:36 PM AEDT | Updated March 8, 2016 15:36
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The price of schooies, bevvies, frothies and even Cold Ones would rise under a proposal to reform Australia's alcohol tax arrangements, in an attempt to raise government funds and reduce consumption.

Modelling commissioned by the Foundation for Alcohol Research and Education (FARE) sets out how Australia would look with a new framework for taxing alcohol, which would include an overhaul of how wine is taxed and adding 10 percent to current excises. FARE’s Pre‐Budget Submission 2016‐17 would see wine and cider taxed in the same way as beer, based on the volume of alcohol rather than the current situation where wine and cider is taxed based on its selling price.

"Replacing the way in which wine is taxed in Australia would ensure a fairer tax system where wine, which currently represents 40 percent of all pure alcohol consumed but only 15 percent of alcohol tax collected, pays for its share of the resulting alcohol harms," FARE said in a statement.

"Economic modelling by ACIL Allen Consulting and commissioned by FARE, forecasts such a change would generate $2.9 billion in revenue while reducing the total alcohol consumed by 9.4 percent."

The report sets out several hypothetical models of alcohol tax, including a volumetric tax that levels an excise of $56.46 per litre of alcohol, with the first 1.15 percent to be excise-free.

Under such a system, domestic cask wine could rocket up in price by up to 235 percent, while cheap bottled wine may shoot up by 100 percent; bad news for uni students everywhere.

At the pub, under FARE's proposals, a schooner of regular beer -- which, for argument's sake, we'll say costs around $5 -- would set you back another five cents. Packaged beer would rise by up to 3.4 percent, while spirits and ready-to-drink beverages would increase by six percent and 4.75 percent respectively.

The proposals were warmly welcomed by other Australian alcohol advisory bodies.

"Australia’s current system for taxing alcohol is incoherent and flawed from both a public health and economic perspective: it favours the production and consumption of cheap alcohol, contributes to the growing burden of alcohol-related harms, and does not recoup the costs of these harms across the Australian community,” said Dr John Crozier, Co-Chair of the National Alliance for Action on Alcohol and Chair of the Royal Australasian College of Surgeons Trauma Committee.

"This modelling demonstrates that alcohol tax reform is both an economic and health imperative, with the potential to reduced alcohol-related harms, offset the economic costs that result from these harms, and contribute to Government revenue."

Also in favour was Public Health Association of Australia CEO Michael Moore.

"There are three main areas where alcohol policy can be improved – pricing, availability and marketing. Pricing will play the most significant role. A change in the tax regime increasing alcohol excise by ten percent will reduce availability, have an impact on chronic disease and reduce alcohol-fuelled violence," he said.

"Younger people are more likely to be involved in alcohol-fuelled violence. By increasing the price of alcohol, teenagers and young adults will be less likely to consume large amounts of alcohol leading to violence."

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