Australian Alcopop Tax Debate Reaches Senate

by Mary Swire, Tax-News.com, Hong Kong

12 March 2009

Australian Senators are poised to question a range of experts from the medical and alcohol industries as the debate over the increase in alcopop tax reaches court.

Although the government imposed the 70% tax increase on pre-mixed alcoholic drinks last April, it still needs to gain further Parliamentary approval by March 19. If it fails, all taxes collected so far will have to be reimbursed to the country's distilling companies.

The introduction of the tax has sparked a large-scale debate amongst health officials and government ministers. Many have challenged the government's justification for the tax, claiming that it has done little to diminish the country's binge-drinking culture.

Late last month, Australia's Family First Senator, Steve Fielding, revealed that he is considering withdrawing his support for the tax.

Mr Fielding made his comments after a report commissioned by the Distilled Spirits Industry Council of Australia (DSICA) claimed that the tax increase had had no significant impact upon the country's binge-drinking culture.

Voicing his concern on his official blog, Mr Fielding explained:

"Figures are emerging which confirm my worst fears that alcohol related hospital admissions have not gone down since the alcopop tax was introduced. It’s obvious that the government is not doing enough to help people drink responsibly."

However, whilst Mr Fielding's opinions are reflected in the views of the country's Independent Distillers Australia, who agree that it is doing little to reduce binge-drinking, the government's Preventative Health Taskforce has commended the government for taking a proactive approach.

The Taskforce's Chairman, Rob Moodie, stated:

"A multi-pronged approach is absolutely essential but things have to start somewhere."

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