The Times Australia
The Times World News

.

Australia's system of taxing alcohol is 'incoherent', but our research suggests a single tax rate isn't the answer

  • Written by Ou Yang, Research Fellow, The University of Melbourne
Australia's system of taxing alcohol is 'incoherent', but our research suggests a single tax rate isn't the answer

The best word to describe the way Australia taxes alcoholic drinks is “incoherent[1]”.

It was the word used by the 2010 Henry Tax Review[2] to describe a system[3] in which some wine effectively faces no alcohol tax[4], expensive wine is taxed heavily and cask wine lightly, beer (but not wine) is taxed by alcohol content, brandy[5] is taxed less than other spirits, and cider[6] is taxed differently to beer.

Industry calculations suggest cask wine is taxed at as little as six cents[7] per standard drink, mid-price wine at 26 cents, bottled beer at 56 cents, and spirits at $1.24.

Australian Distillers Association[8] And yet it is cask wine that is often said to do the most damage[9]. The Henry Review recommended taxing all drinks containing more than a small amount of alcohol at the same rate[10] per unit of alcohol, regardless of type. It was a recommendation backed by specialists in Australia’s tax system[11]. Implicit, and largely unexamined, in these recommendations is the assumption that alcohol does the same damage in whatever form it is taken. Our new study[12], linking drinkers’ risky behaviours to the types of alcoholic beverages they mostly consume, finds this isn’t so. Using data from six waves of an Australian recreational drug survey[13], we find that regular-strength beer and pre-mixed spirits in a can rank among the highest in their links to both drink-driving and hazardous, disturbing or abusive behaviours. Mid-range are mid-strength beer, cask wine, and bottled spirits and liqueurs. At the bottom are low-strength beer and pre-mixed spirits in a bottle, which have the weakest links to risky and abusive behaviours when intoxicated. Probability of drink driving, by age and beverage type RSB = Regular-Strength Beer; LSB = Low-Strength Beer; MSB = Mid-Strength Beer; BW = Bottled Wine; FW = Fortified Wine; CW = Cask Wine; PMSC = Pre-Mixed Spirits in a Can; PMSB = Pre-Mixed Spirits in a Bottle; BS = Bottled Spirits and Liqueurs. Source: Economic Record[14] Some of the relationships vary with the type of damage. While bottled wine is linked to a moderate to high probability of drink-driving, it is also linked to a low probability of hazardous, disturbing or abusive behaviours. Pre-mixed spirits in a bottle are related to a low probability of both drink driving and hazardous, disturbing and abusive behaviours. But when account is taken of the gender of the drinkers (so-called alcopops are typically drunk by females), we find them no longer as safe. Probability of hazardous, disturbing or abusive behaviour RSB = Regular-Strength Beer; LSB = Low-Strength Beer; MSB = Mid-Strength Beer; BW = Bottled Wine; FW = Fortified Wine; CW = Cask Wine; PMSC = Pre-Mixed Spirits in a Can; PMSB = Pre-Mixed Spirits in a Bottle; BS = Bottled Spirits and Liqueurs. Source: Economic Record[15] Our study suggests that Australia’s haphazard system of taxing alcohol might have got some things right. Beer, which is typically taxed more highly than wine, seems to do more damage. But it has got some things wrong. Cask wine appears to be significantly undertaxed relative to the damage it does. More broadly, our findings suggest that if alcohol is to be taxed according to the damage it does, the tax system we adopt will need to be more complicated than a single rate for every unit of alcohol regardless of the form in which it comes. References^ incoherent (cdn.theconversation.com)^ Henry Tax Review (cdn.theconversation.com)^ system (www.aph.gov.au)^ no alcohol tax (www.ato.gov.au)^ brandy (www.thespiritsbusiness.com)^ cider (www.cideraustralia.org.au)^ six cents (australiandistillers.org.au)^ Australian Distillers Association (australiandistillers.org.au)^ do the most damage (www.news.com.au)^ same rate (cdn.theconversation.com)^ Australia’s tax system (doi.org)^ new study (doi.org)^ Australian recreational drug survey (www.aihw.gov.au)^ Source: Economic Record (onlinelibrary.wiley.com)^ Source: Economic Record (onlinelibrary.wiley.com)

Read more https://theconversation.com/australias-system-of-taxing-alcohol-is-incoherent-but-our-research-suggests-a-single-tax-rate-isnt-the-answer-195907

Times Magazine

Headless CMS in Digital Twins and 3D Product Experiences

Image by freepik As the metaverse becomes more advanced and accessible, it's clear that multiple sectors will use digital twins and 3D product experiences to visualize, connect, and streamline efforts better. A digital twin is a virtual replica of ...

The Decline of Hyper-Casual: How Mid-Core Mobile Games Took Over in 2025

In recent years, the mobile gaming landscape has undergone a significant transformation, with mid-core mobile games emerging as the dominant force in app stores by 2025. This shift is underpinned by changing user habits and evolving monetization tr...

Understanding ITIL 4 and PRINCE2 Project Management Synergy

Key Highlights ITIL 4 focuses on IT service management, emphasising continual improvement and value creation through modern digital transformation approaches. PRINCE2 project management supports systematic planning and execution of projects wit...

What AI Adoption Means for the Future of Workplace Risk Management

Image by freepik As industrial operations become more complex and fast-paced, the risks faced by workers and employers alike continue to grow. Traditional safety models—reliant on manual oversight, reactive investigations, and standardised checklist...

From Beach Bops to Alpine Anthems: Your Sonos Survival Guide for a Long Weekend Escape

Alright, fellow adventurers and relaxation enthusiasts! So, you've packed your bags, charged your devices, and mentally prepared for that glorious King's Birthday long weekend. But hold on, are you really ready? Because a true long weekend warrior kn...

Effective Commercial Pest Control Solutions for a Safer Workplace

Keeping a workplace clean, safe, and free from pests is essential for maintaining productivity, protecting employee health, and upholding a company's reputation. Pests pose health risks, can cause structural damage, and can lead to serious legal an...

The Times Features

Duke of Dural to Get Rooftop Bar as New Owners Invest in Venue Upgrade

The Duke of Dural, in Sydney’s north-west, is set for a major uplift under new ownership, following its acquisition by hospitality group Good Beer Company this week. Led by resp...

Prefab’s Second Life: Why Australia’s Backyard Boom Needs a Circular Makeover

The humble granny flat is being reimagined not just as a fix for housing shortages, but as a cornerstone of circular, factory-built architecture. But are our systems ready to s...

Melbourne’s Burglary Boom: Break-Ins Surge Nearly 25%

Victorian homeowners are being warned to act now, as rising break-ins and falling arrest rates paint a worrying picture for suburban safety. Melbourne residents are facing an ...

Exploring the Curriculum at a Modern Junior School in Melbourne

Key Highlights The curriculum at junior schools emphasises whole-person development, catering to children’s physical, emotional, and intellectual needs. It ensures early year...

Distressed by all the bad news? Here’s how to stay informed but still look after yourself

If you’re feeling like the news is particularly bad at the moment, you’re not alone. But many of us can’t look away – and don’t want to. Engaging with news can help us make ...

The Role of Your GP in Creating a Chronic Disease Management Plan That Works

Living with a long-term condition, whether that is diabetes, asthma, arthritis or heart disease, means making hundreds of small decisions every day. You plan your diet against m...