A volumetric alcohol tax in Australia, which applies the same rate of tax per litre of alcohol across all beverages, would provide greater health benefits and cost savings to the health sector than the existing taxation system, according to research published in the Medical Journal of Australia.

However, further research is needed to examine whether alcohol-related health effects vary by the type of alcoholic beverage independent of the amount of alcohol consumed to provide strong evidence for alcohol taxation policies, the study authors said.

Joshua Byrnes, senior researcher at the National Drug and Alcohol Research Centre, and co-authors estimated the public health benefits and costs of a volumetric alcohol tax in Australia. Currently, beer is taxed according to alcohol content above a 1.15 per cent tax-free threshold, spirits are taxed at a higher rate, and wine is taxed as a percentage of the wholesale price.

A volumetric tax that is deadweight loss-neutral (maintains the current difference between the amount of tax collected and the loss in consumer benefit) would result in an estimated annual increase in taxation revenue of $492 million and a 2.77 per cent reduction in annual consumption of pure alcohol, Mr Byrnes said.

The estimated net health gain would be 21,000 disability-adjusted life-years (DALYs), with potential cost offsets of $110 million per annum.

A rate that maintains existing taxation revenue would result in a 0.05 per cent decrease in consumption (380 DALYs), and a tax on all alcohol equal to the existing rate applied to spirits would reduce consumption by 23.85 per cent (170,000 DALYs) and increase revenue by $309 million, according to the authors.

Mr Byrnes said the results indicated that an equalised volumetric alcohol tax was a cost-effective policy that would deliver significant health gains compared with existing taxation in Australia, which applied inconsistent rates per litre of pure alcohol.

"However, the potential for different alcoholic beverage types to have different impacts necessitates caution in interpreting our results [and] ... research that focuses on specific beverage types is required," he said.

He said the recent change in tax rates applied to pre-mixed alcoholic drinks highlighted the Australian government's motivation to adopt evidence-based policy in public health, but that vocal opposition from the alcohol industry demonstrated that such political hurdles remained the largest barrier to be overcome in reforming alcohol taxation.

The Medical Journal of Australia is a publication of the Australian Medical Association.

Source
Medical Journal of Australia