AUS: Alcohol tax overhaul needed - inquiry

The Australian Senate inquiry into the tax hike on RTDs in the country has been told that a complete change to alcohol taxes is needed, according to local reports.

The Federal Government increased the taxes on RTDs in Australia earlier this year, in a bid to control binge drinking.

The majority of witnesses told the inquiry they support it as an initial step, but have insisted that a new alcohol tax system is required, the Australian Broadcasting Corporation (ABC) reported today (12 June).

Doctor Alex Wodak from Sydney's St Vincent's Hospital described the system as "inconsistent" and it should be "no surprise to us that the poorest Australians, that is Indigenous Australians, predominantly drink cask wine". The rate of taxation levied on a standard drink of cask wine is six cents, while the tax on a standard drink of bottled wine is of the order of 22 cents, the news service noted.

The inquiry also heard that some bottle shop owners are not passing on the tax hike in order to keep their sales up.

Australian Drug Foundation spokesperson Geoffrey Munro told the inquiry that in some cases the price hike is not "flowing through", and he wants to see "minimum prices set".

"A purveyor of RTDs in rural Victoria that is advertising on radio is, we understand, suggesting that people can continue to buy the RTDs at this particular store as they're not going to pass on, or they're not passing on the tax increase," Munro told ABC.

However, it could be extremely difficult to track whether the tax hike will drive teenagers to other alcoholic drinks, the inquiry heard, and Federal Opposition argued the tax will encourage teenage drinkers to mix their own, more potent alcoholic drinks.