FARE is calling for reform of the alcohol taxation system in Australia to create a more equitable system that discourages risky drinking, addresses the costs of alcohol harm, and most importantly supports public health and wellbeing.
The main aim of alcohol tax reform is to raise the price of low-quality, high-strength wine to make it less affordable, and therefore reduce the amount that people consume. The best way to do this would be to tax wine based on its alcohol content – the same way as beer and spirits; the stronger the alcohol, the more tax paid.
This would ensure that the tax paid on alcohol is proportionate to the harm it causes. At present the wine tax inverts the relationship between tax paid and harm caused; the wine that causes the most harm is taxed the least.
FARE is not alone in calling for this reform. At least 13 government reviews have recommended a volumetric tax for wine. Alcohol industry businesses and representative bodies have also advocated for change.
FARE recommends a staged approach to alcohol taxation reform involving immediate action to move the WET to a differentiated or category-based volumetric tax rate, with the intention being to tax wine and other WET products at a rate that considers the alcohol content of the products.
This staged approach should also include a longer-term plan, based on clearly established public policy objectives that benefit the Australian community.
The Australian Government can no longer delay reform and ignore the negative impacts the current alcohol tax system is having on the community.