Random essay on implementation of an alcohol tax in Australia

Consumption of alcohol in Australia is consistently rated as one of the highest per capita in the developed world (AIHW, 2011) The World Health Organisation estimates that harmful consumption of alcohol is the third leading risk factor for poor health globally – and one of the most preventable causes of death, disability and injury (NHMRC, 2009). Increasingly, there is evidence that even relatively modest amounts of alcohol consumption can cause adverse health outcomes to individuals including heart disease, gastro intestinal cancers and mental illness (Stockwell, 2012). Further, contemporary research has considered the cumulative effect of alcohol consumption on society more broadly and has found it to be deleterious to the community in a number of aspects (Laslett & Catalano et al 2010).  Given that this is the case, ideas and policy initiatives to broadly curb alcohol consumption have gained traction with clinicians, public health researchers, policy makers and advocacy groups. One of the ‘levers’ that governments have at their disposal in influencing alcohol consumption is to increase sales tax on alcoholic beverages. The nature and extent of alcohol related harm in Australia that has been documented in relevant literature allows a strong case to be made that the Australian Government should pursue a legislative change to increase tax on cheap alcoholic beverages.

It is not enough to focus purely on the efficacy of an increased sales tax; issues of equity and personal responsibility must also be incorporated (Etzioni, 2009).  In considering a thoughtful policy approach and appropriate public health response to alcohol consumption in the Australian context there are a number of important aspects that need to be addressed. Attention must be paid to whether or not there is evidence that there is in fact a ‘safe’ level of consumption of alcohol – both at an individual and population level. The social determinants of alcohol use and abuse must also be examined, as well as the ‘drinking culture’ in the Australian setting, where consumption of alcohol is consistently framed as a central component of the way in which people connect and socialise (NHMRC, 2009; Allsop 2013). This paper explores these ideas in more depth and also briefly examines the mechanisms by which the increased sales tax could be applied in the marketplace (WHO, 2010)

Alcohol consumption, like smoking and tackling rising rates of obesity presents an example of the complicated nature of government intervention into a health issue that is largely viewed as one of personal responsibility rather than a condition requiring a community wide response (Moodie, 2013). Compounding this is the fact that consumption of alcohol is ubiquitous in Australian society. Alcoholic beverages are a product that are very easily procured, legal (above 18+ years) and can be purchased and consumed at an uncapped amount. Even the fact that there are very few restrictions on advertising for alcoholic beverages contributes to its pervasiveness as a social norm (Allsop, 2013). The notion that an activity that is so normalised - drinking alcohol - could be detrimental to health and wellbeing even at low levels of consumption frustrates efforts to change patterns of behaviour both at an individual and community level (NHMRC, 2009). People simply do not believe that a product that is legal and available so readily could be all that harmful (Allsop, 2013). But it is harmful.

The role of alcohol in Australia is complex. Most Australians drink at levels that do not cause them immediate harm. Drinking is, for most, a pleasurable experience associated with socialising and relaxation (NHMRC, 2009).  Australian values and attitudes towards drinking have been shaped by the history of alcohol consumption. At the time of European settlement, heavy drinking was normalised (Lewis 1992). Whilst the British government was dealing with the ‘Gin Craze’ (drunkenness at almost epidemic levels brought on by the amount and price of gin available to working people following market deregulation), European settlers in Australia were being paid in rum (Lewis, 1992). During this time, two drinking practices were established that still persist today – one is the ‘shout’ where the group is supplied with a round of drinks by each person in turn, and the other is the phenomena that we now refer to as binge drinking  - a period of abstinence followed by a bout of heavy drinking. (Moodie, 2013)

These two culturally ingrained practices in particular are problematic because of the resultant confusion about what constitutes a ‘safe’ level of consumption (Allsop, 2013). The convention of ‘shouting’ dictates that if there are six people in the group, every person will consume six drinks – each person buying a ‘round’ in turn (Moodie, 2013).  Recent guidelines from the National Health and Medical Research Council state that “for healthy men and women, drinking no more than two standard drinks on any day reduces the lifetime risk of harm from alcohol-related disease or injury, [and that] drinking no more than four standard drinks on a single occasion reduces the risk of alcohol-related injury arising from that occasion” (NHMRC, 2009). However in our hypothetical group of six persons, it rapidly becomes apparent that consuming only two, or even four drinks, is both culturally and practically fraught. Persons that decline participation in ‘shouts’, depending on the time point at which they opt out will invariably be labelled alternately ‘wowsers’ (to use a somewhat antiquated term meaning boring or conventional) or cheap (Lewis, 1992). Evidence suggests that binge drinking culture is of particular concern in the 15-25 age group (Allsop, 2013, Room & Mäkelä, 2000). Not only has drinking to intoxication at a young age been associated with physical injury, risky sexual behaviour, adverse behavioural patterns and poorer academic outcomes, it has also been linked with continuing heavy drinking in adulthood (NHMRC, 2009). While binge drinking is perceived as a particular problem for young adults, a 2004 study by Jefferis et al highlights this type of drinking is often continued into adulthood. In particular, men who continue to binge drinking in later life tend to suffer lifelong physical and social consequences.(Jefferis et al 2004). This Australian drinking culture that is so pervasive is not without significant negative consequences – and young people are most susceptible to them.  A 2013 report from the Foundation for Alcohol Education and Research stated that ‘In 2010, one in five Australians 14 years of age or over drank at levels that placed them at lifetime risk of alcohol-related disease or injury. This equates to 3.7 million Australians drinking at long-term risky levels, compared to 3.5 million Australians in 2007” (FARE, 2013).  Framed in this way, and given that the vast majority of alcohol related harm is preventable, acting to curb consumption via mechanisms such as increasing the sales tax on the price of alcohol to seem not only prudent but necessary.

Public health policy, in particular government intervention into certain aspects of health, necessitates careful navigation of the tension between libertarian ideas of individual rights and responsibilities and the social, economic and environmental determinants of ill health in the population (Armstrong, 2007; Bayer, 1986){C}{C}. These considerations are of course familiar. Reform of sale, consumption and marketing of tobacco provides a useful case study in balancing individual rights and responsibilities and population health (Bayer, 1986). However additionally, attempts to curb alcohol consumption not only must navigate the usual tensions, but also the historical aspects of the temperance movement and prohibition – over consumption of alcohol is viewed not only as a health issue but also reflection of an individual’s moral values (Dorsey, 2010). A primary argument against government intervention is based on ethical considerations: the claim that such taxes are unfair, discriminatory, and restrict an individual’s freedoms - paternalistic policy that seeks to impose its values on a certain segment of the population (Dorsey, 2010). Why shouldn’t individuals be allowed to drink to excess regularly if they so choose without incurring a cost impost from sales tax? Should government, albeit somewhat indirectly be interfering with an individual’s choice about whether to drink or not?  (Room et al 2000). To answer this question we need to consider the broad impact of alcohol consumption. Many Australians require medical treatment, and some die, as a result of their own drinking or that of others. There is a not insignificant burden placed on the health system due to alcohol consumption and alcohol related harm which results in an increase in expenditure by hospitals and health services that is potentially preventable. Chikritzhs et al. (2003) and the Australian Burden of Disease study (Begg et al., 2007) outline the broad impact of alcohol consumption and Collins and Lapsley (2008) calculate the cost to the health system from alcohol. In making decisions about alcohol policy, shouldn’t we examine the effects at the population level? What is the impact on the community more broadly from alcohol consumption?

In their 2010 study Laslett and Catalano considered these kinds of questions and set out to quantify, for the first time, the ripple effects of alcohol use and misuse. They considered not just the acute health effects for the individual, but the burden borne by the community in many iterations – ranging from intimate partner violence, to noise and nuisance, to motor vehicle accidents. The authors assert that “seventy per cent of Australians have been affected by strangers’ drinking” (Lasset & Catalano, 2010). The report was commissioned by the Foundation for Alcohol Research and Education -  a body whose primary objective is to change the drinking habits of Australians, which whilst it is important to note when critically evaluating their research, the robustness of the data makes a compelling case that alcohol related harm has wide ranging and often severe effects.  Treatment of individuals that have experienced alcohol related ill health is borne by the public hospital system, funded from tax revenue. Similarly to taxes applied to tobacco products – there is an inherent argument that individuals that consume alcohol and then experience poor health as a result should contribute to the costs of that treatment, given that it is a preventable condition.


In considering the implementation of a sales tax on alcoholic beverages, policy making must be underpinned with an acknowledgement of the social determinants of health to allow full exploration of equity issues (Bayer, 1986). The 2009 NHMRC “Australian Guidelines to reduce health risks from Drinking Alcohol” provide evidence that individuals that misuse or abuse alcohol are more likely to be poorer, less educated and more geographically isolated than the broader community(NHMRC, 2009). In the Australian context, it is well established that Aboriginal Australians have poorer health outcomes across a number of measures due to cyclical poverty, displacement and institutional racism. The NHMRC have found that “whilst in fact Aboriginal and Torres Strait Islander peoples are less likely to drink alcohol than other Australians, they are more likely than other Australians to drink at levels above the NHMRC 2001 guidelines if they do drink”(NHMRC, 2009). Given that those most affected by alcohol addiction issues are likely to have a lower socioeconomic status - the brunt of the cost impost of the tax is borne by those who can least afford it. For example, very heavy drinkers and those on low incomes, including young people, the older persons and Aboriginal persons feel price increases more acutely (CCA, 2011). This is an equity issue and is acknowledged as such by advocates lobbying for increasing the sales tax on alcoholic beverages. Both the Australian Medical Association (AMA - the peak professional body for medical doctors) and the Cancer Council of Australia (the peak cancer advocacy, education and support body) in advocating a sales tax suggest that revenue raised from its introduction are hypothecated for treating addiction, preventative programs for alcohol misuse and early intervention (AMA, 2012; CCA, 2011).


There is strong evidence that increasing tax on alcoholic beverage is an effective measure in curbing consumption of alcohol. Elder & Lawrence et al, make an assessment of the efficacy in of alcohol tax policy via a systematic review of the relevant literature, and found that even allowing for age, gender geographic location and study design differences, nearly all studies, stated that the introduction of a tax and (subsequent price increase of alcohol) resulted in an inverse relationship with excessive drinking or alcohol-related poor health outcomes. Importantly, they also found that young people were particularly susceptible to price increases. As discussed earlier in this paper, young people who binge drink in adolescence and young adulthood tend to carry this behaviour forward into later life with far more serious health consequences given the cumulative damage that is done by alcohol misuse (Jefferis, 2004). Importantly, we are also able to ascertain from the literature that the expectation is that the impact of the application of a tax is proportional to its percentage increase – allowing for factors such as demand elasticity and availability of disposable income (Elder & Lawrence, 2010).



The mechanisms by which the increased sales tax could be applied in the marketplace vary. Currently an excise tax is applied all alcoholic beverages produced or imported into Australia. The “rates of excise duty on tobacco, spirits, beer, and other excisable beverages are increased in February and August relative to CPI” (ATO, 2013) The AMA advocates taxing alcohol products on a volumetric basis – that is products with higher alcohol content will be taxed at a higher rate. They also note the potential that a volumetric alcohol tax has to influence and incentivise manufacturers to produce lower alcohol products (AMA, 2012). Relatedly, the AMA also suggest that “licensed premises should be compelled to set a ‘minimum floor price’ for alcohol to disallow alcohol promotions involving free or heavily discounted drinks”. The World Health Organisation has suggested other mechanisms such as incentivising production and sale of for non-alcoholic  beverages; and a reduction or discontinuation of subsidised production of alcohol (WHO, 2010).

In conclusion, it is worth noting that many ethical assumptions underlie public health approaches to reducing alcohol consumption. Although the impact of both the health of individuals and the broader societal consequences are explored in detail in the literature, what is less prominent is the pleasure many people derive from alcohol consumption, particularly as it relates to social settings. Policy in this area very much emphasises harm minimisation which is justifiable given that individuals have agency over their decisions about their level of consumption of alcoholic beverages. The govern­ment’s responsibility is to ensure the health and well-being of the community minimizing harm related to consumption (Room & Hall 2012). An increased tax on alcoholic beverages borne by the consumer is an effective method of acting to prevent harmful consumption of alcohol whilst still allowing people the individual freedoms to determine their own level of consumption.



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