Overview of alcohol taxation in Australia
Australia has a huge history of implementing taxes on the intake of alcohol. This paper is going to provide a proper summary of the taxation on alcohol in the country of Australia along with a brief overview of the reasons for the taxation. The paper is going to report on the public policy debate on this particular issue especially when it comes to creating issues raised in the government’s tax discussion paper. This paper will point out the different trends as well as components of alcohol taxation in the present structure of the Australian taxation system.
The tax is the main source through which the Australian government tries to impact and influence the alcohol consumption of the citizens of the country. Australia has namely four different tax regimes which are for beer, spirits, instant drinking beverages, and finally wine (Vandenberg, Jiang & Livingston, 2019). The two different models of taxation which are excise duty as well as equalization tax are given up on these beverages. Beer is generally subjected to 8 different excise rates and brandy is generally taxed in a different way than in other states. Wine has its own tax arrangement which is different from the other spirits as well. Due to this, there is no proper policy instrument and instead, all the policymakers have to engage in different forms of diverse artificial as well as politically expensive policy-making processes in order to regulate just one product.
Alcohol usage as well as alcohol abuse has imposed a huge amount of health burden on the community in Australia. There are a lot of acute burdens of alcohol abuse which are felt especially by the youth and a diverse number of young people are killed due to accidents and injuries while they have consumed alcohol. Getting proper alcohol policies right and following congruent alcohol policies means getting the system of taxation in a proper structure (Voon & Fogarty, 2021). While there is a lot of complexity in the Australian system of taxation on alcohol which has been criticized for several years, there is a new study that has shown that the tax system is not capable of delivering a proper policy response to the problem of alcohol abuse by young people.
The evidence has suggested that alcohol taxation has been created as a means of increasing the price of alcoholic beverages so that it can act as an effective policy to intervene in the reduction of the rate of alcohol consumption and problems related to alcohol abuse. The taxation of alcohol in Australia is extremely huge because the country is trying to reduce the consumption of alcohol so that crime rates and traffic accidents can be avoided (Cobiac, Mizdrak & Wilson, 2019). Even if there is a very small increase in the cost of alcohol can have a huge impact on the consumption as well as the harm that is caused by the consumption. Even after the immediate need to have proper taxation policies in place, the reduction of alcohol-related harm has not been properly utilized in the taxation policies of Australia.
While the greater form of the significance of alcohol taxation has declined over time in the country, the complete Australian government alcohol taxation receipts have still remained very significant at around almost 5,000,000,000 which is 0.4% of the GDP from 2014 to 2016. The custom duties, as well as the excise receipts on alcoholic drinks, were at a rate of $4 billion in 2014 and 2015 which represents almost 1.37% of the Australian government receipts. Beer had also contributed almost $2.1 billion and spirits had raised almost $2 billion when it came to taxes (Clifford et al, 2021).
Public policy debate and issues raised in the tax discussion paper
The excise duty is a manner of taxation which is calculated by the volume that is given on domestic production of alcohol. All the alcohol products which are imported have to go through customs duty at a rate that is equivalent to the excise rate if the products were produced domestically (Jiang et al, 2020). Apart from all the positive aspects such as the decrease in tax on light as well as low-strength beer and a higher level of tax on carbonated drink products, the taxation on alcohol in the country of Australia is not improving from both public health perspectives as well as from the economic perspective. The National Preventive Health Taskforce has reported the fact that there are few positive aspects of the present alcohol taxation in Australia such as a lower rate of tax on lower alcohol level beer (Wall et al, 2018). The Australian review of the tax system has concluded that the present forms of taxes on beer, spirits, and wine are not properly placed. If the taxes on alcohol are to be made stronger in reducing any form of social or health harm then the taxation policies regarding wine, spirits and beer have to be reformed (Anderson, 2020). There is a huge amount of evidence of the public health positive aspects of taxation on alcohol according to alcohol content. The main purpose of putting taxes on alcoholic drinks is to reduce the drinking of alcohol so that the health hazards are also reduced with it.
It was seen that the effect of the RTD tax on the age groups of 25 to 69 was very distinguishable. The RTD tax had reduced the amount of alcohol consumption among people who are aged from 25 to 69 but it did not have any effect on the people who were under the age of 25. This clearly shows that there is a far stricter taxation on alcohol which is needed in Australia in order to reduce alcohol consumption in the country. The taxation has to be done in an intelligent manner so that there is no increase in domestic production of alcohol which can also pose a huge problem. If people have to pay more taxes for imported alcohol, they will want to consume alcohol that is produced domestically which is going to increase the health hazards and not decrease anything (Jiang et al, 2019). Therefore, the taxation system of Australia regarding alcohol needs to have stronger policies in place in order to reduce the consumption of alcohol. Alcohol abuse imposes a huge amount of burden on the whole community and it can not only decrease the health of the youth but can also pose a problem for the healthcare system (Meyer et al, 2019).
A more sophisticated structure of policies regarding alcohol tax is needed in the country. In the introduction of the RTD tax Australian government was thinking about protecting the youth of Australia. This taxation would help the youth reduce their amount of alcohol consumption because the prices of alcohol will get higher due to the tax. The Australian government still needs to take more sophisticated and proper policy approaches to the subject matter of alcohol taxation. The current system of alcohol taxation only benefits the political parties at the expense of public health (Ngo et al, 2021). The Australian government has to consider different forms of taxation modeling scenarios so that public health becomes the main priority. One of the possible scenarios is to take the place of the wine equalization tax on wine and cider with any form of volumetric excise rate which is equal to the present excise tax following beer. The second possible policy to increase taxation on alcohol is to apply an excise tax rate to all beverages which are equivalent to a 10% hike in the present excise tax which is applicable to alcohol. If there is an application of a universal tax rate on alcoholic drinks which is equivalent to a 10% increase in the present excise tax then there will be a production of the biggest amount of health as well as economic gains. If this was put into place, the overall consumption rate of alcohol good decrease by almost 11%. This in turn would help in the reduction of alcohol-related injuries and diseases and would save the healthcare system almost $2 billion over the life of the whole population.
Complexity and criticism of the Australian taxation system
Therefore the analysis of the paper has given the fact that the alcohol taxation system of Australia needs a lot of policy changes in order to be properly effective. The government is definitely trying its best in order to increase the costs of alcohol in the country but there has to be a concise structure of taxation on alcohol so that it can bring economic gain as well as protect the youth of Australia from diseases due to alcohol. The taxes on alcohol are generally kept so that the alcohol consumption by the people of a country is not rampant. The main reason for increasing the tax on alcohol is to protect people from health hazards. Therefore it is crucial that there is a more sophisticated approach to taxation policies of alcohol in Australia. This increase in taxation has to be done in the right way because if it is done in an improper manner it can encourage excessive domestic production of alcohol which will not benefit anyone in the country. It would not help in the reduction of health hazards due to alcohol because people will keep on consuming domestically created alcohol.
References
Anderson, K. (2020). Wine tax: Wine consumer tax in Australia-a comparative perspective. Wine & Viticulture Journal, 35(2), 57-62.
Clifford, S., Smith, J. A., Livingston, M., Wright, C. J., Griffiths, K. E., & Miller, P. G. (2021). A historical overview of legislated alcohol policy in the Northern Territory of Australia: 1979–2021. BMC public health, 21(1), 1-18.
Cobiac, L. J., Mizdrak, A., & Wilson, N. (2019). Cost-effectiveness of raising alcohol excise taxes to reduce the injury burden of road traffic crashes. Injury prevention, 25(5), 421-427.
Jiang, H., Livingston, M., Room, R., Callinan, S., Marzan, M., Brennan, A., & Doran, C. (2020). Modelling the effects of alcohol pricing policies on alcohol consumption in subpopulations in Australia. Addiction, 115(6), 1038-1049.
Jiang, H., Room, R., Livingston, M., Callinan, S., Brennan, A., Doran, C., & Thorn, M. (2019). The effects of alcohol pricing policies on consumption, health, social and economic outcomes, and health inequality in Australia: a protocol of an epidemiological modelling study. BMJ open, 9(6), e029918.
Meyer, S. B., Foley, K., Olver, I., Ward, P. R., McNaughton, D., Mwanri, L., & Miller, E. R. (2019). Alcohol and breast cancer risk: Middle-aged women’s logic and recommendations for reducing consumption in Australia. PloS one, 14(2), e0211293.
Ngo, A. P., Wang, X., Slater, S., Chriqui, J. F., Chaloupka, F. J., Yang, L., … & Shang, C. (2021). Alcohol excise taxes as a percentage of retail alcohol prices in 26 OECD countries. Drug and Alcohol Dependence, 219, 108415.
Vandenberg, B., Jiang, H., & Livingston, M. (2019). Effects of changes to the taxation of beer on alcohol consumption and government revenue in Australia. International Journal of Drug Policy, 70, 1-7.
Voon, D., & Fogarty, J. (2021). Role of alcohol taxes in moderating alcohol consumption: Current and future potential impacts. Drug and alcohol review.
Wall, M., Casswell, S., Callinan, S., Chaiyasong, S., Viet Cuong, P., Gray?Phillip, G., & Parry, C. D. (2018). Alcohol taxes’ contribution to prices in high and middle?income countries: Data from the International Alcohol Control Study. Drug and alcohol review, 37, S27-S35.
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
