Pricing and Taxation

The Foundation supports pricing policies that prevent alcohol-related harms. Alcohol pricing policies, particularly taxation reform, is consistently shown to be one of the most effective ways to reduce alcohol-related harms.

The current alcohol taxation system was described by the Henry Review as ‘incoherent.’ Government reviews dating back to 1999 recommend the reform of alcohol taxation in Australia, based on the alcohol content of products. The most recent of these reviews are the Henry Tax Review and the National Preventative Health Taskforce.

The current alcohol taxation system is complex and inequitable.  Alcohol products are taxed differently based upon their type, the way they are packaged, their alcohol content and their cost. The greatest discrepancy in the current alcohol taxation system is the wine equalisation tax or WET.  The WET results in wine being taxed according to its retail price rather than its alcohol content. This means that cheaper wine attracts less tax.

The Foundation’s position

The Foundation believes that alcohol taxation should be applied to products based on their alcohol content. This would best target the policy relevant costs that result from alcohol-related harms.

We support a transition to a taxation system where all alcohol products are taxed according to their alcohol content. Like the Henry Review, we support reforming the WET first by moving it from a tax based on value to a tax based on alcohol content. The current alcohol taxation system encourages the production of cheaper wine products, some as low as $2 a bottle.

We support reform to alcohol taxation that adopts a considered, planned policy approach which moderates alcohol’s negative health and social impacts.