In this week’s installment of citizen journalism, Taylors Wine managing director, Mitchell Taylor, presents research that shows increased taxation on alcohol does not translate into increasing public spending on alcohol abuse.
“The decision to increase tax on any alcoholic beverage is short-sighted and will not address the problem of alcohol abuse within minority groups. It is a populist reaction from the Government in order to appear to be doing something about the problem but it is a façade that will not deliver any productive results or long-term solutions.
A recent report by Collins and Lapsley* showed the revenue raised through alcohol tax already exceeds the amount spent on dealing with alcohol abuse:
Alcohol taxes thus more than pay for the social costs of alcohol abuse, by a considerable margin, each year. Moreover, taxation of alcohol, increased from $3.37 billion in 1998/99 to $5.11 billion in 2004/05, a 52 per cent increase (8.6 per cent per annum) greatly exceeding population or consumption growth.
The Rudd Government needs to work closely with the alcohol industry and consult with its members to develop measures that can improve alcohol abuse in the community.
A change in tax on wine would have a devastating impact on the industry. The Australian wine industry is a regional employer that manufactures and exports wine to the value of $2.6 billon per year.
We are already the highest taxed wine producing country in the world and the Australian wine industry is experiencing a very tough time with drought, high exchange rates and an oversupply of grapes.
The Australian wine industry successfully competes internationally and has a true comparative advantage globally. It is a success story for all Australian agricultural and manufacturing industries to aspire to and we need to support it as best we can.”
* Source; Access Economics — Collins and Lapsley report review