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September 2, 2008
Experts Discuss the Effectiveness of Increased Tax on Premixed Spirits
September 10, 2008
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Will Australia’s tax cut on alcohol curb teen drinking?

The move of the Australian government to increase the tax on pre-mixed spirits by 70% in order to curb teenage binge drinking have earned both raves and criticism across different sectors of society. In the recent edition of the The Lancent, two authors laid down their opinions on the possible effect of new tax law and as well as some suggestions for the government.

Dr. Christopher Doran and Dr. Anthony Shakeshaft, both of the National Drug and Alcohol Research Center of the University of New South Wales in Sydney noted that the new tax law which increased excise duties on pre-mixed drinks from AU$39.36 per liter to $66.67 per liter is only taking the battle against excessive and binge drinking “part of the way.” According to the two, the newly imposed increase on tax duties merits the exploration of whether the usual consumers of premixed drinks a likely to switch to unmixed drinks or other cheaper beverages. The two doctors note that even if such switch is to happen, the resulting figures are still not as outstanding since consumers of premixed spirits are a minority (30%) in the first place, especially when compared to beer drinkers (60%). They also pointed out that the young people which the tax law targets are still unlikely to switch to cheaper beverages since figures consistently showed that spirits are the choice drinks of most teenage drinkers in Australia even though these were more expensive by the liter.

The two authors, however, are quick to clarify that they do not view the new tax law as a wrong move on the part of the Australian government. What they want to emphasize, they say, is that it is only a partial move. The overall rates of drinking, both the usual and binge episodes in not likely to fall given the rather small market share of spirit consumers. The authors do, however, recognize that the ‘principle of a standardized tax rate is sound’ while emphasizing the role of governments in improving public health.

As conclusion, Dr. Doran and Dr. Shakeshaft urge the government to ‘adopt a battery of strategies ‘ which could include provisions on giving incentives that will encourage manufactures to sell mid to low-strength beer, the imposition of certain restrictions that will control the availability of drinks with high contents of alcohol, and better regulation of the codes of advertising practice.