ADCA writes to Treasurer Chris Bowen re tobacco and alcohol taxation

Posted on: January 30, 2018, by :

Dear Treasurer,

The Alcohol and other Drugs Council of Australia is concerned that the Federal Government is ignoring the cost of alcohol to society by zeroing in on smokers in an attempt to cut its budget deficit.

ADCA believes that the cost of alcohol and tobacco to the nation’s well-being warrant consideration of both in any taxation review. You would be aware of the well-documented adverse effects of alcohol on the nation’s health, which makes ADCA wonder why the government hasn’t singled out alcohol for special treatment.

For several years, ADCA has supported the introduction of a volumetric tax on alcohol. Most recently, I wrote to the Prime Minister a fortnight ago, urging him to review the existing alcohol taxation regime. Neither the Prime Minister, nor his predecessor nor the Leader of the Opposition have responded to that approach.

I understand the harm tobacco causes but feel that it is time governments acknowledged the $36 billion annual cost of alcohol to society; this figure is remarkably similar to that the Prime Minister used to justify the need for action on tobacco yesterday. We can’t ignore the simple premise that, as is the case with tobacco, we need to cut back on alcohol consumption by addressing issues of price, availability, promotion and advertising.

Several areas of the alcohol industry support volumetric taxation; brewing and distilled spirits interests favour scrapping the wine equalisation tax (WET) and the adoption of an industry-wide volumetric model.

ADCA’s concern lies in alcohol’s ubiquitous presence in all areas of society – most notably in the sporting arena. Your government obviously acknowledges that this needs to be addressed, with the Australian National Preventive Health Agency’s (ANPHA) Be the Influence campaign backing sporting codes to step away from alcohol sponsorship. This is part of the Australian Government’s National Binge Drinking Strategy and ADCA urges ongoing government support for the codes that have made the move.

Research worldwide shows that raising the price of alcohol drives down consumption. Reforming the alcohol taxation regime would thus be doubly attractive, reducing harm from alcohol abuse or misuse and providing government with extra resources to drive campaigns like Be the Influence. This and other programs are an investment in preventive health which would result in far greater savings through addressing the cause rather than treating the after-effects.

ADCA believes also that liquor industry promotion and marketing is far too hard sell, targeting young people who governments recognise shouldn’t even be drinking. ANPHA has addressed this issue.

The liquor industry has its own advertising and promotion code of conduct which has neither sanctions, nor is it mandatory – a laughable situation and one that government desperately needs to address.

Currently, we pour money into the consequences of alcohol misuse – disease, injury, illness – without seriously trying to stop the problem at the outset. Where’s the sense in that?

In 2009, the Prime Minister observed that the lion’s share of health spending goes toward curing our ills – rather than avoiding them in the first place. It wasn’t long after the Prime Minister’s observation that researchers published their findings on the cost effectiveness of a volumetric alcohol taxation system in Australia. Their estimates of potential revenue over a range of scenarios varied between nearly $500 million and $3.1 billion annually, with a net health gain of 21 000 disability-adjusted life-years (DALYs) and potential cost offsets of $110 million a year. These are figures that can’t be ignored.

If the Rudd government is so concerned for Australians’ well-being, will it also review the alcohol taxation regime?

Yours sincerely

David Templeman
Chief Executive Officer

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