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Floor price on its own won’t work
By Liz Martin
A price floor for take-away alcohol is one of several measures currently being advocated by some groups in Alice Springs to counter alcohol consumption and the many personal and public harms that follow.
I am surprised how many people don’t understand the concept of a floor price. Generally a ‘floor price’ is a government, business, or group-imposed limit on how much can be charged for a product. For a price floor to be effective, it must be greater than the equilibrium price.
Floor pricing is not unusual in Australia where the concept is used to set minimum wages and is also seen in the agriculture and hospitality industries to varying degrees. It has also been looked at for alcohol by various governments over many years. A floor price, in this instance, would mean a minimum fixed price on all alcohol products (take-away or otherwise) limiting the ability of retailers to charge below a certain price — the objective being to cause a reduction in alcohol consumption through making it “too expensive” for people to drink as much.
I don’t have an issue with a floor price per se; my first concern is it will be just as ineffective as the countless other measures we have introduced over the years and, dare I say it – will impact far greater on pensioners, low income families and tourists who all enjoy a perfectly legal tipple without causing self harm or disruption to the community.
I say this with just reason. My workplace is surrounded by no less than a dozen ‘drinking camps’. Some are on our land, some along the railway corridor, some on Crown Land and some on privately owned land but all are within a one kilometre radius of our facility. I know what they are drinking out here and its NOT cheap grog!
My second concern is that the introduction of a floor price without a nationally consistent corresponding volumetric tax (based on the amount of alcohol in a product) will simply increase profit margins for retailers allowing them to discount or reduce prices on alcoholic products that are already in the highest tax bracket per volume – products like Bundaberg Rum and Jim Beam.
Do we really want to make these products cheaper?
There is also a concern that people will subsidise this increase by cutting food and essential items in their budgets which is something we have also witnessed in the past. The idea of a uniform volumetric tax on alcohol is supported by the Henry Report on Australia’s future tax system with the idea being that those products with higher alcohol content will be priced accordingly encouraging consumption of lower alcohol content product.
This would produce a more equitable disparity between low and high alcohol content product. The advantage of a Government volumetric tax versus and ad hoc ‘floor price’ arrangement is that tax money goes to the public kitty and can be put back into cost recovery for initiatives that deal with alcohol related harm in the community.
I have no ‘formal’ qualification in the alcohol arena but can say, without any doubt, that the drinkers who use improvised camps to drink do not drink cheaper alcohol. I have taken hundreds of photos to prove it. By far the most common drink receptacles we find are VB cans and Jim Beam and Bundaberg cans and bottles.
Very occasionally we find Emu Export, wine bottles and casks, vodka, whiskey and other spirits. Over the last couple of years there has also been an alarming increase in premix spirits such as boutique type cruisers and breezers. Money is not the issue for these hard core drinkers who are looking for more ‘bang for their buck’ in the alcohol they drink, not cheaper prices. Having said that, we did notice a sharp increase in “Passion Pop” bottles when they were available and this was mainly among the women and teenage girls. Peer pressure dictates the men drink heavy beer and spirits.
There is no disputing that many reputable drug and alcohol agencies and related associations around the country, and indeed the world, support the concept of a floor price for alcohol as a measure for reducing both alcohol consumption and anti-social behaviours.
There is also plenty of evidence to support the success of floor pricing in other areas. I believe however, the drinking environment and culture in Alice Springs is significantly different and the impact would not be anywhere near as impressive or effective here as it is elsewhere.
It has been several years since Alice Springs commenced price-based alcohol supply reduction through implementing a two-tiered floor price approach with the cheaper grog products being available between 2pm and 6pm and “heavier” product after 6pm. Initially this produced almost 20% reduction in the consumption of pure alcohol across the population.
As with the many other measures we, as a community, have introduced over the years, the habits of recidivist drinkers soon change to suit availability, product, opportunity, location and finally, price. This is particularly true among that sector of the population where there is a chronic tendency towards repetition of criminal and anti-social behaviors whether it be to criminally source alcohol or because of being under the influence of excessive consumption.
Most of these initiatives, nearly twenty that I can name, have forced drinkers into improvised adhock drinking camps on the outskirts of Alice Springs or into our public places where they are hidden or can easily flee from the authorities placing themselves, their families, the business community, law abiding citizens and the public at large at risk.
This can be said for the ‘Dry Town’ legislation, the photo ID system, the ‘Two Kilometre’ law, income quarantining, restrictions on opening hours and specific product, prohibition of alcohol in some places and the current two tier approach to availability of take-aways. All of these were initially successful in their ‘honeymoon’ period but all have failed in the longterm. I believe the common factor in the failure of these initiatives is that we are trying too hard to treat the symptom and not addressing the cause.
Alcohol abuse in our town is symptomatic of far deeper issues and it is our continual failure to address these issues head on that causes us continual grief year after year. We need to properly address housing, education, training, health, employment, poverty, disempowerment and genuine rejection, inclusion and racism issues perceived or real.
If we don’t address and resolve these issues then the simple fact of the matter is that no alcohol restriction will ever, can ever, work. As history has shown, drinking patterns will change and substances to abuse will be changed but self-harm, anti-social behaviour and criminal activity will continue. It will just be more of what we have been seeing for decades in the Northern Territory.
The call for a “floor price” on alcohol has long been mooted by sectors of the Alice Springs community and this was clearly put again by several speakers at our recent Alice Springs Town Council Public Meeting.
While I don’t support the introduction of a floor price without a corresponding volumetric tax I don’t think we should be selling two buck bottles of grog either. I believe we should seriously look into all the aspects of this measure so we can make an informed approach to both the Northern Territory and Federal Governments. I firmly believe that as a stand alone measure a floor price will fail for all the reasons I have mentioned in this document. For it to succeed it must, for the sake of all our constituents in Alice Springs, be a part of a whole raft of measures that deal with the causal issues behind the truly sad situation we find ourselves in (again).
Indications are that it is inevitable that Australia will ultimately end up with a national price scheme for alcohol based on a federally imposed volumetric tax. I am also aware that there are many points of difference on how to deal with this issue coming from different sectors of our community.
Alice Springs is currently high on the political agenda and I think if we can get a whole of community approach to a single issue then we can make a collective and co-ordinated approach and call for the Federal Government to expediate its introduction even if only in the Northern Territory at this point.
All Governments hear at the moment is our differences of opinion. Lets all focus on a point of agreement (not necessarily the floor price) and our combined voice will be so much more powerful. Afterall we are all chasing the same outcome its just our methodology that’s different!
One of the reasons Governments are slow to take up a floor price based on volumetric tax is that while some drinks (like cask wine) will increase by say, $20 a cask, high end alcohol like Moet will actually decrease by about $100 a bottle depending on what rate is used and calculation is used and this equates to a major reduction in overall taxes collected from alcohol. I welcome comment from members of the public on this issue.
Liz Martin is an Alice Springs Town Council alderman, and a founding member of the Responsible Drinkers’ lobby group in Alice Springs. She is also he chief executive officer of the National Pioneer Transport Hall of Fame.
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I wholeheartedly agree with your argument, especially as an extension of what Dr. Boffa has said. Not only is alcohol just one of the substances misused, its misuse is mostly symptomatic of deeper problems. Social problems tend to continue despite these sorts of restrictions, but they are usually reduced in frequency if not in intensity and randomness as a consequence of these sorts of measures (I think I remember Dr. Boffa saying something like this once on 783 a while ago). So, really, in the end alcohol restrictions are an important measure because they alleviate the symptoms that then make it easier to deal with the root causes. And that’ll be where the real debate starts. But, I’d say that no matter what the interpretation of the causes, it seems to me that Alice Springs may be under-resourced to adequately deal with these sorts of challenges. Maybe the current focus of political attention on Alice should be seen as an opportunity to redress these issues – to ask Territory and Federal governments to do more.
There seem to be two arguments here.
The first argument is about how to assess the Federally mandated tax on alcohol. On this I can see no reason not to have a uniform tax on the alcohol in any alcoholic product instead of, as at present, taxing the different products. As I understand it, this is what is known as volumetric taxation. This approach sounds less confusing and much fairer. It’s an alcohol tax, so tax the alcohol.
The second argument is about how to best address the problem alcohol poses for Alice Springs. On this we hear competing voices ranging from a floor price to take-away restrictions to mandatory rehabilitation to open slather and may the fittest survive.
It has taken me a long time, but restrictions on take-away availability seem to make the most, but definitely not the only, sense. If grog is not available for at least some of the time, there will have to be less drinking overall.
Some argue that drinkers will simply stock up in advance, but do binge drinkers and alcoholics ever successfully plan ahead? If they buy an extra carton today, won’t they or their friends simply drink it today.
Others argue that if the take-away outlets are closed drinkers will break into venues where it is known alcohol is stored. And the difference with what is happening today is …? People who break and enter commit a crime and deserve to be hauled in front of the courts.
Also that sly grog vendors will answer the demand to which I answer, hammer the sly grog sellers hard!
There is also an argument that tourists will find any restrictions on take-away sales inconvenient. I question how much take-away grog is purchased by tourists. Don’t they rather go out to restaurants and clubs where their drink is sold with meals or as part of the entertainment?
And won’t most tourists be only too willing to partake in reducing the alcohol problem in Alice Springs, especially if it is explained why restrictions are necessary. Most tourists are intelligent visitors here to enjoy Central Australia and to partake in some form of Aboriginal experience. Explain how they can help, and I suspect they will embrace the restrictions in much the same way most embrace the restrictions on climbing the Rock.
The perennial problems of health, housing, schooling, employment and urban drift are all real and are all deserving of attention. But these problems are national in scope, and none are helped by open access to alcohol.
For those on Twitter, there is a hashtag started by opponents of alcohol restrictions – #SARIAS. Not a very active discussion, but the occasional outburst.
Thanks Bernard and Hal for your comments. Yes, I think volumetric is the way to go as far as tax on alcohol but I’m not keen on restrictions – they are a stop gap not a long term solution. Dealing with the causal issues is.
By far the biggest complaint I get from tourists is about restrictions and I have over 60,000 a year through here. While in Alice they should and do avail themselves of restuarants and eateries but then they have to stock up to head off on their adventures. There is tons (and I mean tons) of cask wine coming across the border with tourists bringing it up for each other – the grey nomads have a massive bush telegraph network. I buy my wine by the pallet from interstate and so do lots of people I know. AND – none of this alcohol is recorded as alcohol consumed in Alice! Tourists and locals havent stopped drinking alcohol they just buy it elsewhere!
I also have a problem with Taxi drivers dropping drunks (often with children accompanying them) in the middle of nowhere with grog. Surely there must be a code of conduct or duty of care they should operate under. When I approached two taxi drivers about this issue they told me they dont get a destination until the people are already in the cab so cant control it. Surely if they see grog and children they can ask before they let them in the cab! At least if they go home the children have some chance of reprieve. Out here they have none. I have often had to give them water and a sandwhich and in several instances taken them home if they live in Alice somewhere. NOT GOOD ENOUGH!
The other interesting thing I have noticed over the years is that when its chaotic in Alice Springs township our strife out here is considerably lessened. Everytime they sort out Alice Springs the trouble starts out here again. With all the extra cops in town I had double trouble here – drunks in NT Govt cars and even a night patrol van from a community included. All we do when we just move them on without services or retribution is give some-one else in another area a big headache!
Liz
I would like to address your concern that the grey nomads will find it inconvenient if our bottle shops close for a day or three every week.
All the self-drive tourists coming thru Alice, whether grey nomads, backpackers with their second-hand motorcars or families having a drive around Australia, will stay in town for longer than one day. If they are inconvenienced, it will only be until the shops open tomorrow. I don’t think that’s too much to ask.
What I find inconvenient and confusing are the myriad rules that we now have. Different opening hours during the seven day week, different times that this or that product may be bought, and on Sundays only some shops being allowed to open.
Whether or not we get a thirsty day(s), I would like to see a bit more uniformity on the restrictions we do have. When approached in Woolies last winter by a tourist, I couldn’t tell him with certainty just when he could expect to buy the drop he was looking for. It was a bit embarrassing for both of us.
Hi Hal
Its not that I’m overly concerned about the fact the grey nomads are inconvenienced – they just bring their grog with them. Its the fact that that grog isnt measured as part of consumption in Alice so the statistics are inaccurate. I agree myriad of rules is confusing – no wonder enforcement is so hard.
Wouldn’t it be better to get 4000 people signing a petition to shut the animal bars so there is a direct and noticable impact on the 300 or so people who use them (I’d sign that petition) than inconvenience the thousands who do drink responsibly and dont use them.
All “Thirsty Thursdays” did in Tennant Creek was send the drunks to Wycliffe, Wauchope or Renner (and Alice)making our roads unsafe for other road users. I was run off the road several times. Same at Curtin Springs – they just make the roads more dangerous and put innocent people (including their own children) at risk
Well, as has been reported in the media, the alcohol restrictions that I thought were necessary have been scrapped. The Licensing Commission has decided not to take the Advisory Panel’s recommendations to restrict the sale of alcohol before 2pm. Predictable, I suppose.
Liz, as Hal has pointed out, I think the inconvenience of existing restrictions would not have been worsened much by the restrictions that were being considered by the Licensing Commission.
I’m sure I’m only aware of a tiny fraction of the problems alcohol poses in Alice, but it’s plain as daylight that the status quo simply means shifting the problem around until no one notices or complains. I don’t think the Henry Tax Review will get a political airing until after the next election. In the meantime, alcohol restrictions could be an important part of the policy mix and the Licensing Commission has caved on doing what’s right because of community opposition. I can understand your opposition – we know alcohol restrictions are not a perfect solution, but I don’t think that’s enough of a reason to not include it with complementary measures, like the banned drinkers register. I just don’t understand why other people seem so opposed to it…
Liz, at 62 I have been involved in and around drug and alcohol rehabilitation including rehabs and drop-in centres since 1976. In general I have observed, socialised and drank with, many Aboriginal people. Chronic and Committed Drinkers. In urban and remote communities, enclaves, gatherings and drinking places, missions and settlements.
From Cairns to Townsville, Brisbane, Sydney, Melbourne, Adelaide, Alice Springs, Darwin and many places in between. In the early eighties I was employed as a Senior Counsellor in an Aboriginal specific Rehabilitation clinic in Brisbane.
One thing Liz, is that most people including Counsellors don’t really understand the nature of the beast, Alcohol.
And I am not talking about Alcoholism and Alcoholics Anonymous ( AA ).
The European term is “Social Lubricant”. Then on to “ Habitual Sot”
The Native American experience is “Fire-Water” it puts “Fire in the Belly” !!
Many Aboriginals use the term, getting “Charged Up” !!
Grog is “Empowerment” it makes the Mouse, Roar like a Lion !! And who wants to give this up ? I’ll tell you who, Nobody !
So this is what you are dealing with.
As for a “Floor Price” ? Well, the normal progression is from the Jim Beam and VB to cask wines, then on to Methylated Spirits for the same “Hit”
For ten (10) people on the dole( unregulated ) the combined income would be about $2,500 a week.
So they would easily be able to keep themselves in, at least, cask wine.
Photo Id ? as it has been pointed out, people will simply get others to buy it for them.
Then of course the sly grog runners will accommodate this income.
Rehabilitation and Rehabilitation Facilities ?
Check the stats from the established ones.
Also, the “Betty Ford Center” is for Hollywood and is non applicable over here !
Rehabs are for people that want to give up the grog.
Not people just wanting to have a break or some R&R.
Or because of court orders.
As they are disruptive to any genuine person.
Also, there are many cannabis users in Rehabs, with many being ejected because of.
The ones in the N.T are not much different.
I agree Arthur, the actual price of alcohol is little deterrent to those desperate for a drink. I have no doubt a floor price will be will reduce consumption to a degree but I doubt it will impact too much on the target group because for them they will source grog anyway they can at the expense of any-one they can – and if they cant get what they want they’ll abuse what they can get. We need to deal with the real issues before we’ll see real results.
Interesting you mention methylated spirits. When I was a kid it was common to see people drinking metho and beetroot juice or metho and orange juice. Whether its glue, paint or petrol sniffing, marijuana or harder drugs, gambling or a myriad of other addictions there will always be a substitute if we dont get serious about the causal issues. I have witnessed youth out here drinking mouthwash! And yes, I have witnessed plenty of drunks getting others to buy their grog for them and even doing deals with basic cards for much less than their worth so they can buy alsohol. Where there’s a will there’s a way.
It is indeed a sad situation we find ourselves in but I do think compulsory rehabilitation programs is one of the answers but acknowledge this is not a one size fits all solution.
Liz, most people that seek to drink alcohol are never “desperate”.
The problem drinkers ? Well, they want to get “really pissed” ! It is a real “Buzz” or “High”.
I have experienced and observed this “Trip” many times and I can assure you that it is something outside the realm and understanding of the A.A. criteria, philosophy and experience.
It is both escapism and empowerment.
The same with the prescription drugs, uppers and downers. Combined, ( as is common ) they compliment each other.
And create a “Real Blast” !
And has nothing to do with “Alcoholism” !