By Ian Neubauer

A volumetric taxation system on alcohol is the most equitable and cost-effective way to reduce alcohol-related harm, according to new findings published by the Alcohol Education and Rehabilitation Fund (AER).

Volumetric taxation is calculated on the alcohol content of a product. It differs from the current taxation model that taxes beer, wine and spirits at different rates — a regime that has attracted widespread criticism following April’s 70 per cent RTD tax hike.

AERF chief executive, Daryl Smeaton, said the study provided further evidence for the need to overhaul the existing alcohol taxation system.

“We need a fairer system that taxes alcohol as alcohol, rather than having different rates for beer, wine or spirits. Volumetric taxation makes sense from an economic, health and community perspective and is a crucial first step that needs to be taken in order to change patterns of alcohol consumption,” he said.

“The fact is that the alcohol taxation system is broken. It does not achieve anything other than a revenue stream for government. I have no doubts that governments need to maintain revenue, but if we looked at the alcohol taxation system from a public health perspective, as well as from an economic perspective, then I think we could come up with a much better system that would serve Australia equally well in both areas”.

Under a volumetric tax regime, the tax on an RTD would fall more than 60 per cent while the tax on a four-litre cask of wine would increase by more than 600 per cent. The tax on a full strength draught beer bought at a pub would increase by more than 40 per cent.

AHA chief executive, Bill Healey, said there was some logic to volumetric taxation for alcoholic products but it was no panacea.

“We think that increased taxation really leads to substitution to other products or substances,” he said, referring to the growing popularity of bottled spirits following the RTD tax hike.

“But there should be reduced taxation for lower alcohol products. The growth of mid-strength products indicates that tax reductions should be looked at to promote responsible drinking.”

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