The author is grateful to John Freebairn and to the referees for their constructive and helpful suggestions.
Reform of the Regulation of Liquor*
Article first published online: 6 FEB 2011
© 2011 The Economic Society of Australia
Economic Papers: A journal of applied economics and policy
Volume 29, Issue 4, pages 397–406, December 2010
How to Cite
Lloyd, P. J. (2010), Reform of the Regulation of Liquor. Economic Papers: A journal of applied economics and policy, 29: 397–406. doi: 10.1111/j.1759-3441.2011.00091.x
- Issue published online: 6 FEB 2011
- Article first published online: 6 FEB 2011
- external harms;
- supply side regulations;
- tax rate;
- tax base;
- penalising harmful drinkers
This article reviews the tax bases and rates currently applied to alcoholic beverages in Australia. It then considers changes to the tax base and rates. It advocates a single volumetric base with the rate at least equal to that currently levied on spirits other than brandy. However, improved taxes on alcoholic beverages cannot eliminate the externals harms imposed by some drinkers on other persons. The guiding principle for reform of both taxes and other regulations is that they should focus on the small minority of drinkers who cause harm. Effective policy reform will require careful policy design and a commitment from politicians. Some reforms are mooted.