Should our wine be taxed? 8



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There’s nothing better than drinking a glass of red with a lovely home cooked dinner, but soon that could become an unreachable luxury for so many, if the Foundation for Alcohol Research and Education’s latest $3.9 billion proposal passes.

The Foundation wants the Federal Government to use the Budget to overhaul the way wine is taxed and impose a 10 per cent increase in all alcohol tax excises. This means wine could increase by $3.80 per bottle and draught beer drinkers would pay about five cents more per glass.

Foundation chief executive Michael Thorn said a 10 per cent excise increase would help reduce alcohol consumption in Australia by 9.4 per cent, reports Adelaide Now.
“Reforming the alcohol tax system should be a no-brainer,’’ Mr Thorn said.

“In fact, nine separate government reviews have recommended we do exactly that. Increasing taxes on alcohol would not only address the budget deficit but, as research shows, is also the most cost-effective way to reduce alcohol consumption and the resulting harms, particularly among young people and risky drinkers.”.

If you like a bottle that costs between $15 and $20, you could be hit with a tax of over $3 every time. A can of pre-mixed spirits would also be about 16.7 cents more expensive.
The Foundation for Alcohol Research and Education wants to change the way bi-annual increases are calculated, by using average weekly earnings instead of CPI to determine the tax excise.

So where is this money going? The foundation suggests it will go towards treatment of Foetal Alcohol Spectrum Disorders and alcohol “harm reduction public awareness campaign’’.

Today the foundation will call for the Wine Equalisation Tax and WET rebate system to be abolished and replaced with a new tax on wine and cider linked to alcohol content.

Aussies love their wine, and it represents 40 per cent of all alcohol consumed in Australia, however right now it doesn’t generate enough revenue.
Mr Thorn said wine represented 40 per cent of all pure alcohol consumed in Australia but only 15 per cent of alcohol tax collected.

Despite this, our wine industry still contributes $40.2 billion to the Australian economy and employs more than 68,000 people.

We want to know your thoughts today: should our wine be taxed?


Starts at 60 Writers

The Starts at 60 writers team seek out interesting topics and write them especially for you.

  1. Cheap cask wine is the biggest problem. But how to separate bottled from cask.

    1 REPLY
    • You’d be taxing the content not the bottle or the cask but not a bad idea to tax the bottle and the cask as well.

  2. As all but one of our major breweries are overseas owned and major wine produces have been gobbled up by overseas financed companies, and all most all our our spirits are imported just who suggested this idea. The comment above about cheap wine casks being the problem you obviously have not looked at the rise in prices of wine casks since September 2015. The big retailers have quitly increased the price and the major wine companies have reduced the quantity of wine purchased from small wine growers to also help force the price up.
    The fallout because of the law of unintended consequences of this little bit of legislation will be spectacular. Good-by small wine companies goodbye small hotels and liquor stores who were just competing with the major retailers.

  3. I am no mathematical genius but I do not see that a rise of $3.80 per bottle of wine will reduce consumption by 9.4%. If you love your wine you will pay such a small price increase. If Thorn stated a rise of $38 per bottle then I would agree.

  4. why not? The Gov has been taxing non alcoholic drinks forever and now talking about banning them because sugar is the new nasty !. If the Govt used the tax to clean the water that we are supposed to drink, fine! But it will be just thrown into Govt coffers. I need a damn good reason why wine and all alcoholic drinks not to be taxed.

  5. Experience with Aboriginal people in Central Australia suggests that heavy drinkers respond to price increases by either buying a cheaper alternative or stealing it, often causing much more damage to property than the value of the alcohol. Increasing prices has never led to a decrease in consumption, contrary to the normal laws of supply and demand.

    I don’t object to paying taxes, but wine and beer etc should be taxed at the same rate as everything else – 10% GST.

    If prices keep on increasing, more retirees will move overseas to cheaper places like Thailand, Malaysia, Malta etc at least for part of their year. How will that help rake in more tax to squander on ill-advised government programs?

  6. As always, the moderate consumer is slugged to the max whilst alcoholic pre-mixed spirits & top shelf spirits that are consumed in massive amounts by the younger age groups are almost exempt. The violence on our streets post alcohol binge is not the result of a glass or two of red with dinner. Tax by all means but direct it at the problem not those that are perceived to be able to afford it.

  7. As the Winemakers’ Federation of Australia says: “Not only is Australian wine heavily taxed already when compared to our global competitors, in fact we are among the highest taxed in the world today, but the tax rates reflect that alcohol industries are not all the same and this continues to be missed by health lobbyists like FARE.
    “The reason why wine is taxed differently and preferentially to other alcohol types is clear cut.
    “Wine is different when it comes to our socio-economic input into regional Australia, employment footprint, contribution to export earnings, profitability and access to capital compared to the vastly different brewing and spirits industries and it’s only fair that alcohol tax arrangements reflect this.

    “The Federation believes wine must continue to be taxed within the existing WET legislative framework and that any future changes to wine tax arrangements are done so within this framework and not shifted to an excise-based approach as is the case for beer and spirits. The Federation does not advocate how the WET should be calculated.
    “Speculative reports in the meantime such as those pushed again and again by FARE, need to be seen for what they are – headline grabbers that will hurt the local industry and will continue to be ignored by governments.”

    Agree 100%!

    Michael Hince – Wine Writer & Historian

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