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

Christopher M. Doran, Joshua M. Byrnes, Linda J. Cobiac, Brian Vandenberg, Theo Vos

Research output: Contribution to journalArticleResearchpeer-review

22 Citations (Scopus)

Abstract

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, disabilityadjusted 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.

Original languageEnglish
Pages (from-to)619-622
Number of pages4
JournalThe Medical Journal of Australia
Volume199
Issue number9
DOIs
Publication statusPublished - 4 Sep 2013
Externally publishedYes

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