Cost-effectiveness of volumetric alcohol taxation in Australia

Byrnes, JM, Cobiac, LJ, Doran, CM, Vos, T and Shakeshaft, AP (2010) Cost-effectiveness of volumetric alcohol taxation in Australia. Medical Journal of Australia, 192 8: 439-443.

Author Byrnes, JM
Cobiac, LJ
Doran, CM
Vos, T
Shakeshaft, AP
Title Cost-effectiveness of volumetric alcohol taxation in Australia
Journal name Medical Journal of Australia   Check publisher's open access policy
ISSN 0025-729X
Publication date 2010-04-19
Sub-type Article (original research)
Volume 192
Issue 8
Start page 439
End page 443
Total pages 5
Place of publication Strawberry Hills, NSW, Australia
Publisher Australasian Medical Publishing
Collection year 2011
Language eng
Formatted abstract
To estimate the potential health benefits and cost savings of an alcohol tax rate that applies equally to all alcoholic beverages based on their alcohol content (volumetric tax) and to compare the cost savings with the cost of implementation.

Design and setting:
Mathematical modelling of three scenarios of volumetric alcohol taxation for the population of Australia: (i) no change in deadweight loss, (ii) no change in tax revenue, and (iii) all alcoholic beverages taxed at the same rate as spirits.

Main outcome measures:
Estimated change in alcohol consumption, tax revenue and health benefit.

The estimated cost of changing to a volumetric tax rate is $18 million. A volumetric tax that is deadweight loss-neutral would increase the cost of beer and wine and reduce the cost of spirits, resulting in an estimated annual increase in taxation revenue of $492 million and a 2.77% reduction in annual consumption of pure alcohol. The estimated net health gain would be 21 000 disability-adjusted life-years (DALYs), with potential cost offsets of $110 million per annum. A tax revenue-neutral scenario would result in an 0.05% decrease in consumption, and a tax on all alcohol at a spirits rate would reduce consumption by 23.85% and increase revenue by $3094 million. All volumetric tax scenarios would provide greater health benefits and cost savings to the health sector than the existing taxation system, based on current understandings of alcohol-related health effects.

An equalised volumetric tax that would reduce beer and wine consumption while increasing the consumption of spirits would need to be approached with caution. Further research is required to examine whether alcohol-related health effects vary by type of alcoholic beverage independent of the amount of alcohol consumed to provide a strong evidence platform for alcohol taxation policies.
©The Medical Journal of Australia 2010
Keyword Alcohol drinking
Cost effectiveness analysis
Cost control
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2011 Collection
School of Public Health Publications
Version Filter Type
Citation counts: TR Web of Science Citation Count  Cited 13 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 0 times in Scopus Article
Google Scholar Search Google Scholar
Created: Sun, 30 May 2010, 00:01:50 EST