Abolish the alcopops tax

Abolish the alcopops tax - The Australian Taxpayers' Alliance

Repeal the alcopops tax introduced in 2008/09 by the Rudd government.

Background

In April 2008, the newly elected Rudd government introduced legislation to increase the tax on so-called ‘alcopops’ beverages by 70 percent. Alcopops are alcoholic beverages manufactured to combine soft drink or fruit juice with a high strength alcohol, such as spirits or wine. Public health campaigners have long argued that alcopops encourage and facilitate drinking amongst teenagers, so the government saw this as an opportunity to combat underage drinking. The government claimed that by increasing the cost of alcopops, teenagers would find them less affordable, and therefore cut down their consumption of alcohol. However, this knee-jerk policy proposal has failed in its stated goal, with evidence showing it has instead encouraged drinkers to switch to other, sometimes less safe alternatives.

Why it must be repealed

The Australian Taxpayers’ Alliance has been heavily involved in advocating for the repeal of the alcopops tax, with education campaigns designed to increase knowledge of the consequences of unnecessary taxes such as these.

As the evidence shows, the alcopops tax has not only failed to achieve any public health benefits, it has worsened the problem it attempted to fix. Excessive alcohol taxes have led young people to engage in risky drinking behaviour. Illicit drugs have become a common replacement for expensive alcohol. And there have been no reductions in the consequences associated with alcohol, such as hospital admission rates and injuries.

A policy that was supposed to resolve a problem has failed, and should be repealed before the situation worsens.

         i.            The law has failed

In a study for the Medical Journal of Australia, Professor Kisely and his research team at the University of Queensland delved into the effects of the alcopops tax, examining hospital records spanning two years prior, and one year after the introduction of the tax. By examining data from emergency departments and the Queensland Trauma Register, the team attempts to see if the increase in tax on alcopops had any effect on the number of 15-29 year olds treated for incidents of alcohol-related harm — such as alcohol poisoning, alcohol-related injuries, fights, and traffic accidents. After analysing 87,665 alcohol-related visits to hospital emergency departments over three years, the team concluded that the tax had made no difference to these incidents.The proportion of alcohol-related presentations had not significantly fallen after the introduction of the alcopops legislation.

       ii.            The substitution effect

According to the Australian Bureau of Statistics, the consumption of pre-mixed drinks fell 31 percent between 2008 and 2011 (after the tax was introduced). However, there was a 20 percent increase in the consumption of pure spirits over the same period.

As critics of the tax predicted, the increased price of alcopops has only forced consumers to substitute alcopops with other drinks that are cheaper, such as cask wine and spirits. Young people have substituted pre-mixed, low alcohol content alcopops, with privately mixed spirits that can vary widely in strength, thereby increasing the risks of unsafe drinking.

With price being such an important factor, research from Victoria has revealed three-quarters of Victorian young people load up on alcohol before going for a night out at a venue where alcohol is served. Participants of the study explained that they pre-drink because it’s cheaper than buying alcohol they enjoy whilst out, such as alcoholic-energy drinks, wine, and alcopops.

Not only are consumers substituting alcopops with stronger alcoholic drinks, they are also moving to drugs like ecstasy — as seen in one  study conducted by the University of Queensland’s Alcohol and Drug Research and Education Centre. The study found that a lot of young people are making the choice to switch between alcohol and ecstasy as a direct response to the high tax rate on alcohol. A student from the study, aged 22, said pills were affordable and pre-mixed drinks at music festivals were ''sugary'' and very expensive. A subsequent study from Deakin University also concluded that, “should taxes increase sufficiently on alcoholic products, consumers will substitute for ecstasy or marijuana”.



Help Us Share Our Message

Share our message of less taxes, regulation and
wasteful spending