Picking up the tab for state’s booze blues

The Auditor-General’s report this week confirms what the experts have long known, and successive governments have long ignored.

The cost of alcohol use and misuse to the people of NSW is simply too great and, to date the government’s response to the issue has been completely inadequate.

According to the Auditor-General, the annual cost of alcohol abuse to the government was $1.029 billion.

The total societal costs are even greater, with the Auditor-General estimating it at $3.87 billion per year, or a whopping $1565 for every household in NSW.

The Auditor-General has proposed a “user pays” system. This would have been a great proposal had the correct “user” been identified.

Released as the NSW Government embarks on a review of the NSW Liquor Act 2007, and hot on the heels of damning revelations of a government caught acquiescing to alcohol industry demands, the report should have provided the impetus to further strengthen the state’s licensing regime.

The Auditor-General should be recommending mechanisms to recover the cost of alcohol abuse from the state’s 17,946 liquor licensees, the very businesses profiting as quickly as they contribute to the harms.

Yet in a curious omission from an “audit”, the report fails to make any mention of the alcohol industry’s contribution to the harms, or the insignificant contribution it makes by way of licensing fees.

A quick examination of the liquor licensing fees from 2011-12 shows how little is actually collected. By our estimates, at best the Government would have collected just over $1 million for all new liquor licences, an embarrassing take, which pales in comparison when considering the $1.029 billion costs incurred by the government.

In this state, liquor licences are treated like a right, not a privilege, with applicants paying a paltry one-off application fee for a licence granted in perpetuity.

Let’s put this into perspective.

A venue may have paid a maximum one-off fee of only $5000 for its liquor licence, an amount easily covered over the course of a couple of hours on a Friday night.

The introduction of a risk-based liquor licensing system would ensure venues would be charged an annual fee based on the venue’s potential to contribute to alcohol-related harms. It would go part of the way to recovering some of the costs incurred by governments in regulating liquor licensing and cleaning up the mess from alcohol-related harms.

The Auditor-General has done a great service in identifying the true extent of alcohol abuse in NSW. But in failing to acknowledge the alcohol industry’s role in contributing to the harms identified in the report, the Auditor-General has missed an opportunity to recommend the most appropriate and obvious solutions.

The government still has a chance to make this right, but to do so it must look at tackling the root cause of the problem.

There are effective evidence-based measures that would reduce the heavy financial, physical and emotional cost of alcohol abuse in NSW.

As well as introducing annual fees from liquor licensees to try to recover some of the costs from alcohol abuse in NSW, the Government must also introduce evidence-based measures that prevent and reduce alcohol-related harms.

These solutions are well known and have been long advocated for by experts in the field. They include reducing trading hours, reducing the density of licensed premises, removing reckless promotions, and giving the community a greater say in the way that alcohol is sold and made available in their community.

The toll does not need to be so high.

This article was first published in the Newcastle Herald on 8 August 2013

Photograph supplied by the Police Association of NSW