What's the alcohol industry got that the tobacco industry hasn't? You would be unnerved if you knew.
Smokers were slugged an extra $360 million on budget night. Cigars and roll-your-own cigarettes are being brought into line with packaged cigarettes, whose excise is jumping by 12.5 per cent this September and then 12.5 per cent for each of the following three Septembers to take the retail price to an astounding $45, enough to raise an extra $4.7 billion.
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Alcohol: The end of the affair?
Australia's love-affair with alcohol may be cooling according to a research poll published in May. Vision courtesy ABC News 24
Alcohol, which poisons and harms us in different ways, didn't suffer at all.
Glenys Byrne has been watching it happen for three decades. As a senior official in the Finance Department, she has seen budgets change from documents that used to produce headlines such as "Beer Up, Cigs Up" to documents that left alcohol alone.
![Malcolm Turnbull, Scott Morrison and Julie Bishop.](/web/20170515123049im_/http://www.smh.com.au/content/dam/images/g/w/3/3/7/6/image.related.articleLeadwide.620x349.gw3fna.png/1494727567903.jpg)
Finally free to speak after retiring, on budget day this year she presented a seminar at the Australian National University on why she thinks alcohol has become a no-budget zone.
While both drugs kill people, the harm alcohol does is under-reported. Child sexual abuse, date rape, domestic violence and the carnage that follows binge drinking aren't widely acknowledged. Deaths from tobacco are better documented. Most of the victims are men; as many as 8 in 10.
Since the late 1980s smoking rates have halved. Over the same period alcohol consumption has doubled. Byrne says we've disrupted the sale of cigarettes by banning advertising, enforcing plain packaging, adopting a zero tolerance policy for smoking in public and by repeatedly jacking up prices.
Plain packaging and the most recent round of repeated price rises were driven by a health minister who was determined to succeed. Nicola Roxon lost her father at the age of 10.
While smoking rates have fallen, the revenue raised from taxes on smoking has climbed much faster than GDP. While the amount drunk has climbed, the revenue raised from alcohol tax has actually fallen relative to GDP, and the revenue from tax on wine has dived.
As Byrne says: when revenue isn't rising in line with GDP, the Finance Department starts asking questions.
One answer is that wine isn't taxed by alcohol content. It's taxed by price, and prices have been falling. The price of regularly-abused cask wine is now so low that the tax is close to zero. The other answer is that small wineries (or big wineries that make themselves look small) are exempt from the tax on wine altogether. As she puts it: we've made a decision to subsidise hobby farms.
Action to curb smoking saves men's lives, action to curb drinking saves women's lives.
Those answers tell us how it happened, but they don't tell us why. Byrne's been thinking about that too.
One explanation is that while Australia no longer grows tobacco, it makes a lot of wine. Many of the wine companies are big and located in influential or National Party electorates. Another is that while smoking adds to health costs and so is a drain on the Commonwealth budget, drinking adds to both health and social costs and so is a drain on both Commonwealth and state budgets. The financial payoff for curbing it doesn't solely accrue to the Commonwealth.Â
And there's another, unsettling explanation. The victims of tobacco are overwhelmingly men. Action to curb smoking saves men's lives. The victims of alcohol are disproportionately women. Action to curb drinking saves women's lives.
All of our treasurers have been men. Wayne Swan dismissed a recommendation from the Henry Tax Review to more properly tax wine, and Scott Morrison wound up a tax inquiry whose discussion paper had been strongly critical of the tax regime for wine.
On Tuesday, Treasury revised up the revenue expected from tobacco, and once again revised down the revenue expected from alcohol. Drinkers are switching to lightly-taxed wine, and its alcohol content is rising.
As Byrne said while Morrison unveiled the budget, the cost of inaction is rising. It's been 17 years since the light-touch regime for taxing alcohol came in with the GST; 17 years in which we could have used the levers we've got to prevent it doing us harm.
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