Sunday, April 27, 2008

Increased tax on alcopops

The Australian Government's decision to increase the excise on so-called alcopops by 70% is excellent news. These sweet flavoured alcoholic concoctions are intended to create another generation of heavy drinkers in the face of a steady state decline in the demand for booze.

The industry is targeting kids who will suffer permanent brain damage from excessive alcohol use. This tax - which will add about $1 to the price of this rubbish - will help combat this.

The liquor industry ranks with the tobacco vendors as one of the most immoral in our society. Anything that damages their profitability and long-term prospects advances the social welfare. It is also useful that shareholders in these nasty businesses wake up to the long-term difficulties that these firms seeking to create alcohol dependencies will experience. You were warned!


Slim said...

Finally! Rudd scores a point!

But seriously, it's good to see you giving economic gravitas to support good social policy.

Can't imagine it would win you many fans among conservatives. Tony Abbott always seems to put the rights of unscrupulous operators to exploit vulnerable markets before the impact on the intended victims or the wider society - i.e. junk food advertising during children's TV programming. He, and the libertarians, say that it is the responsibility of the parents, and if their kids get fat then it's their own fault for being bad parents. Yet he presumed to advise the public on matters of sexual morality.

The message seemed to be that it's OK to screw people over, but not actually screw them (unless you're married to someone of the opposite sex).

Sinclair Davidson said...

How do you know there is a decline in the demand for booze?

Slim - placing a tax on alcohol (in these circumstances) is a standard economic solution to a problem. Harry, also, is a conservative so he has no problem slapping a tax on alcohol, or anything else he would deem to be anti-social.

Yobbo said...

Harry never saw a tax or ban he didn't like.

You're such a hypocrite, Harry. Wine (which you enjoy) is fine and shouldn't be taxed more. Pre-mixed spirits (which you apparently don't drink) on the other hand, are the devil!

hc said...

Sinclair, Consumption has remained about stable in terms of pure alcohol consumed per year. Risky drinking has increased 50% over the past 10 years.

Yobbo, There is no question that alcohol is neurotoxic and there is strong evidence it imposes especially heavy costs on those under 25.

There are lots of taxes I dislike but I do want a decent supply of defence services and public goods such as education, health as well as private supplies.

I dislike taxes that have harmful effects on work effort and savings. I like taxes that help prevent young kids doing themselves brain damage, which prevent traffic congestion and which limit greenhouse gas emissions.

My own drinking habits are irrelevant to the case against booze. Hypocrisy is not an issue.

Spiros said...

This fight between the conservatives and the libertarians is very exciting. Who needs mixed martial arts when you've got this? Go get 'em Harry!

robert merkel said...

Harry, might this just provoke a switch to other drinks, given the almost negligible cost of, say, cask wine?

Spiros said...

Robert, cask wine tastes yucky, is not cool and has little appeal to yoof.

hc said...

Robert, Almost certainly it will cause substitutions towards cheaper grog. Its the basis of proposals to tax volumetrically on the basis of alcohol content.

I think Spiros has a point. Developing a taste for wine takes time. The alcopops are a painless way of moving youth towards drinking regular wines and spirits.

conrad said...

If its the ABS figures for binge drinking you are quoting, then it is misleading -- if I remember correctly the problem is binge drinking is set at 5 standard drinks (i.e., 3 beers across a night). This is hardly risky behavior.

You also see a main effect across age groups -- so my bet is that what is happening is that people are simply substituting wine for beer, and drinking more as a result.

Anonymous said...

There was no good reason to treat alocopops more favourably than other alcohol by having a lower volumetric tax. So the new policy gets a tick from a pure tax policy point of view. As I understand it, a uniform volumetric tax would mean an increase in the tax on wine.

But I do not think that there is much of a link between taxes on alcohol and problems of alcohol abuse. It seems to be more a cultural factor. Some European countries have very low alcohol taxes, relatively cheap alcohol, and very low levels of problem drinking.

Mark U

pcsolotto said...

If im in the situation of the owner of this blog. I dont know how to post this kind of topic. he has a nice idea.

Anonymous said...

Instead of taxing the drinks we should look at reducing the trading hours of clubs and bars. you can now get a drink 24/7 if you want.

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