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Raise excise taxes to prevent alcohol harm to young people: Report says
Raising the excise tax on alcohol will contribute to reducing alcohol-related harm to this country's young people, according to a report commissioned by the Alcohol Advisory Council. The Government is now considering the report, prepared for ALAC by economist Brian Easton.
ALAC's Chief Executive Dr Mike MacAvoy says increased tax on alcohol that has higher ethanol content would steer young people away from the high alcohol content cheap drinks which many of them now favour. "We know that young people are particularly sensitive to price. We know that they are more likely to seek 'best bang for buck' by buying light spirits with a high alcohol content at a cheap price."
Dr MacAvoy says ALAC commissioned Mr Easton to investigate the issue because it is deeply concerned about youth12-24 years of age. drinking in New Zealand. "We welcome Mr Easton's report, Taxing Harm: Modernising Excise Duties and endorse its findings. We would support a change to the current excise tax structure."
He says young people are currently being tempted by a range of drinks which appear to be marketed directly towards them. Under the current tax structure these light spirits are not taxed according to their ethanol content - which is high - but instead fall into a category that Dr MacAvoy describes as "pocket money-priced alcohol".
"There are some very cheap drinks available with high alcohol content. The kids like them because they can easily afford them or they can pool money to buy them, but many parents and others are not aware of how high the alcohol content is. In some cases, there are bottles which are providing as much alcohol as 23 or so standard drinks for under $10. The pricing is so low because of the tax bands these products currently fall into and because they are taxed as beer and wine rather than spirits. We'd like to see this fixed.'
"Our view is that by reflecting the true alcohol content in taxes on liquor this could help steer young people towards drinks with less alcohol, thus minimising some of the harms we are finding."
Dr MacAvoy says a major concern is the fact that young people are drinking more heavily and at an earlier age. "The National Alcohol Survey has found that the average quantity of alcohol consumed by 14 to 17 year olds doubled between 1995 and 2000. The same survey found that the 14 to 19 year olds were consuming more on each drinking occasion. Our own Youth Drinking Monitor in 2002 found that over a third of 14 to 17 year olds consider themselves to be 'heavy drinkers'.
Dr MacAvoy says some people appear to think that the alcohol tax is only a revenue gaining exercise. "In fact, the tax has an important role to play in managing consumption and therefore harm."
He says: "Pricing policy is recognised internationally as one of the most effective tools in reducing alcohol-related harm within the drinking population through reducing consumption."
The report proposes that in future the primary purpose of excise duties on alcohol should be a part of a harm minimisation strategy. It says that adopting a harm approach to alcohol excise duties can reduce potentially harmful consumption, especially that of teenagers and heavy drinkers.
Dr MacAvoy says effective harm minimisation involves a number of interventions and changing the excise tax structure is one of them. "These other interventions are likely to work more effectively if the excise duty strategy is supporting them."
In the past year or so, there has been a noticeable groundswell of interest in the community about the effects of youth drinking, Dr MacAvoy says. "This is commendable but if we are really serious about teenage drinking problems, it will require some serious commitment from us all, from Government and the community."
"A raft of strategies is needed if we are to have any impact on the problems we're seeing. Solving alcohol-related problems is about a range of strategies including community action, enforcement, policy, education and advertising, sponsorship and promotion."
The full report is available in the Publications Section of out site.