Increasing the price of alcohol, particularly cheap wine and cider, would boost tax revenue by $2.
9 billion annually and be a boon to public health, says a new report.
The economic modelling found that a 10 per cent hike in all alcohol excise and the scrapping of the wine equalisation tax (WET) would lead to a 9.4 per cent cut in booze consumption and a corresponding cut in alcohol harms.
The extra tax revenue could be spent in the health system targeting chronic disease prevention and research, says the Foundation for Alcohol Research and Education (FARE).
Its Pre-Budget Submission 2016-17 proposal would see wine and cider taxed according to the volume of alcohol, as applies to beer and spirits, before a 10 per cent increase is applied on all alcohol excise.
The WET sees cheap wine and cider taxed at a lower rate than beer and spirits.
But wine currently makes up 40 per cent of all pure alcohol consumed while only delivering 15 per cent of alcohol tax.
Replacing it with a volumetric tax would ensure it paid its share of the resulting alcohol harms, says FARE.
“Reforming the alcohol tax system should be a no-brainer,” says chief executive Michael Thorn.
“In fact nine separate government reviews have recommended we do exactly that.
“Increasing taxes on alcohol would not only address the budget deficit but, as research shows, is also the most cost-effective way to reduce alcohol consumption and the resulting harms, particularly among young people and risky drinkers.”
Each day, 15 Australians die and 430 are hospitalised because of alcohol, while other far-reaching effects include family violence and Fetal Alcohol Spectrum Disorders, says FARE.
AVERAGE INCREASES UNDER PROPOSALS
* $5.25 for bottle of wine currently under $7
* $4.60 for $7-$15 bottle of wine
* $3.80 for $15-$20 bottle of wine
* 5.5 cents for a schooner of full-strength draught beer
* 16.7 per cent for a can of pre-mixed spirits.