Is the government chickening out over alcohol taxation?

The Henry Taxation Review, which represented no less than a complete examination of Australia’s tax system, recommended an introduction of volumetric excise for all alcoholic beverages, which would have hit the Australian wine industry hard: it would have forced the cost of four- or five-litre cask wine to triple, while trendy two-litre boxes would have more than doubled in price, according to wine industry forecasts.

The wine industry feared that any move to change the current system of taxing wine, beer and spirits at different rates would have caused low- and fixed-income as well as older Australians to turn away from their 180-million-litres-a-year thirst.

Alas, its fears were ungrounded.

Apparently, the government is becoming increasingly “on the nose” as the federal election is due later in the year. Not a good time to antagonise tipplers and voters with a mightily unpopular tax.

Twenty-seven Australian health organizations have criticised the government’s failure yet again to adopt a volumetric excise.

The Australian Chamber of Commerce and Industry slammed the new tax package as having a number of “nasties to the business community” and said a golden opportunity for a wholesale review had been missed.

Those of our readers with a long memory, like this correspondent, know that for over 60 years the introduction of volumetric excise has been under consideration in Australia.

Will any federal government ever be prepared to tackle this seemingly “touchy” subject?