“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.