The diverse drivers of relative changes in excise taxes on beer and spirits in Australia, 1902–2012

Abstract

In Australia there have been calls for volumetric alcohol taxation, or some variant of this, to eliminate the complexities and inequalities of the existing system. While the arguments have been made on economic rationality and evidence-based public health grounds, this article examines the historical drivers of alcoholic beverage excise tax changes in order to facilitate a more informed debate about how to achieve alcohol taxation reform. Excise taxation on spirits and beer (wine has almost never been taxed through excise taxes in Australia) was examined in greater detail using primary data sourced from national excise taxation schedules from 1902 to 2012. Interpretation of this data was based on primary sources such as Hansard speeches and Government reports, and secondary sources provided by historians. Australia had a long history of not taxing spirits more heavily than beer except in the early part of the twentieth century; this changed after 1988. Setting alcohol excise taxes in Australia has been a balancing exercise between industry protection, revenue raising and political expediency, as well as public health. The historical instances examined in this article support the conclusion that while public health has been a driving force for some excise taxation changes, it has not been the only driver. These findings should inform policy making on excise taxation on alcoholic beverages in Australia.

Notes

1. ‘d’ refers to penny(ies) or pence, and ‘s’ refers to shilling in the currency in Australia at the time.

2. Hansard is a continuous transcript of all parliamentary debates, although the verbatim transcripts have been corrected and edited in Hansard for minor slips and repetitions.

3. The CPI is a current social and economic indicator that is constructed to measure the changes over time in the general level of prices of consumer goods and services that households do acquire, use or pay for consumption. The index aims to measure the change in consumer prices over time. Downloaded on 4 March 2013 from http://www.abs.gov.au/websitedbs/c311215.nsf/web/Inflation + and + Price + Indexes + - + Consumer + Price + Index

4. In a twist to this story, the government initially did not keep this promise to limit the tax rise on ‘ordinary beer’. It was only the [upper house] senate's refusal to allow passage of the excise taxation amendment legislation that resulted in the commitment being honoured; the extra excise taxation revenue that had been collected in the interim was used to set up what is now the Foundation for Alcohol Research and Education (FARE, 2013).