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May 31, 2013

Get Fact: did the alcopops tax curb teenage drinking?

When the government introduced a 70% tax hike on alcopops, it promised the measure would fill public coffers and limit teenage quaffers. Crikey intern Shaun Ewart reports the actual result was different.

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“I have no doubt in my mind that this will target consumption by a group of people who are engaging in drinking practices that are undesirable for them, and for the country.” — Wayne Swan on the “alcopops” tax in 2008.

“We know young people do change their habits depending on price. We think that this measure will have a health impact. That’s why we’ve introduced it.” — Nicola Roxon in 2008.

In 2008, the then Rudd government announced its first tax hike to an apprehensive public. Amid political doubt the federal Labor government proposed a large tax increase on pre-mixed alcoholic beverages in an effort to dissuade the youth of Australia from binge drinking.

Nicola Roxon, the health minister at the time, explained how raising the price on the preferred alcoholic drink for young people would be an effective way to reduce the harm caused by youth binge drinking. The federal government increased the tax on pre-mixed alcoholic beverages by 70% in April of 2008.

The “alcopops” tax was born. Despite the original legislation failing to pass, “validating” legislation was passed by Parliament to allow for the collection of the increased tax revenue.

Critics of the scheme argued Labor was more interested in the prospects of a higher tax income than the health of young Australians. Opposition Leader Tony Abbott said at the time he wouldn’t criticise the plan but did think “at least part of [Labor’s] motivation would be to get in the extra money”. The tax was initially forecasted to net $2 billion in revenue over four years.

Distilled Spirits Industry Council spokesman Steve Riden said at the time “if the purpose of the tax is to decrease the amount of binge drinking, I think it’s going to be a sad failure. It’s not going to have an impact. Teenagers are just going to swap what they drink.”

Nearly five years since the introduction of the alcopops tax, a recent study has shown the number of young people with alcohol-related injuries has not declined. Researchers from the University of Queensland evaluated 87,665 alcohol-related admissions to emergency departments in hospitals on the Gold Coast over a three-year period.

The number of people aged 15 to 29 who were admitted to hospital as a result of binge drinking did not change following the increased tax on pre-mixed alcohol in 2008.

Australians are forecast to spend $1 billion in alcopop taxes in the 2014-15 financial year. However, the tax collected from the past three years has fallen more than $400 million short of previous budget estimates.

Lead researcher Professor Steve Kisely said the tax had failed to have an effect on youth binge drinking because it was too specific.

“Based on findings from this region, changes in taxation of ‘alcopops’ did not decrease alcohol-related emergency department presentations. Targeting specific drinks is no substitute for a comprehensive approach to tackling binge drinking in young people.”

Australian Bureau of Statistics data shows that our consumption of pre-mixed alcohol declined by 31% from 2008 to 2011. However, the sale of straight spirits, which are often mixed stronger than the pre-mixed alternative, went up by 20%.

The data also shows that Australians have consistently spent more money on alcohol each year after the tax was introduced.

So it wasn’t exactly last drinks on alcopops. We’re judging the initial claims as rubbish.

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10 comments

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10 thoughts on “Get Fact: did the alcopops tax curb teenage drinking?

  1. Bradley Woods

    In 2008 when the Commonwelath delivered their failed Alcopop Tax policy the Australian Hotels Association was highly critical.

    We argued that as a strategy to curb binge-drinking and alcohol abuse in young people, raising the excise on a pre-mixed alcohol products was naive at best and negligent at worst. The policy was suggested to the Government and championed by the tax payer funded anti alcohol wowser health lobby.

    We said at the time that the Commonwealth should be applauded for initiating the salvos in the war on binge- drinking, but there needed to be an acknowledgment that that simply raising taxes on pre-mixed alcohol products was a ridiculous strategy to try and cure society’s inebriated ills. In isolation, it was a cynical measure that insulted those who do not have an issue with alcohol consumption, particularly the consumption of pre-mixed products, and one which was simply shifting the focus of binge-drinkers onto straight spirits and wine-based products.

    Instead there was a significant opportunity for the Commonwealth, the community and the industry to work together in partnership to target binge-drinkers of any age, hotel patrons and society in general to define and implement clear social, behavioural guidelines for generations to come.

    We argued that collectively, we should be initiating short, mid and long-term strategies that realign the behaviour of an at-risk minority with the overall expectations of society.

    To date the Rudd and Gillard Government’s approach to the binge-drinking issue has been disappointing. Instead of placing the binge-drinking agenda on the table of every liquor producer, distributor and industry body through a coordinated process of consultation – a process which could have resulted in a strategy that had the wholesale support of the industry – the Commonwealth Government chose to try and tax a social problem out of existence.

    This ‘initiative’, which was dressed up and sold to the Australian society in the guise of targeting binge-drinking and being in the best interests of the nation’s health, was a cynical and failed social and revenue policy spearheaded by the tax payer funded anti alcohol wowser health lobby. It’s about time their failed policies be recognised for what they are.

    Bradley Woods
    CEO Australian Hotels Association (WA)

  2. mikehilliard

    Judging by the rather wordy comment above this article has appealed to it’s target audience.

  3. Jon Mewett

    Is it a rubbish on the fibomatic? Or were they just wrong?

  4. David Coles

    So many young people did what most others would. They changed from alcopops to some other form of alcohol. Tax that option more and they will switch again. There will never be success using short sighted simple strategies.

  5. iggy648

    From 2005-6 to 2009-10, there was a roughly 70% increase in non alcohol related presentations for both age groups, and for alcohol related presentations in the 15-29 year old group. However, there was a 100% increase in alcohol related presentations in the older group. Any ideas why the older group got worser faster? Are older people stupider, or is it just a statistical blip? And 70% increase in 4 years? I that just due to massive population growth?

  6. mook schanker

    The never ending aimless taxing the bejesus out of alcohol just drives people to other vices where no taxes are realised, especially younger people with limited social funds…

  7. iggy648

    Done me own stats. Population of the Gold Coast was around 466000 in 2006 and 527000 in 2010, an increase of about 61000, or about 13%. So how do you account for a 100% increase in alcohol related presentations in the older group over the same period? Anybody? And why was the younger group’s growth rate of alcohol related presentations 43% less? Anybody?

  8. iggy648

    Come on Shaun. Investigate. What’s the real story?

  9. iggy648

    Or take the average of the alcohol related admissions for the three years before (6913 and 12268 resp.) and for the two years after (10738 and 21028 resp.) and you have a 55% increase for the young group and 71% increase for the older group. The increase for the younger group was 22% less than the increase for the older group (or the increase for the older group was 29% more than the increase for the younger group).

  10. iggy648

    And that 16% difference amounts to 3,400 young people not admitted to ED who would have been if their behaviour had worsened as quickly as the older group. If not due to the alcopops tax, isn’t it worth looking at the reasons? Or are 3,400 people just a statistical glitch?

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