Stage one of the review into the alcohol levy, conducted by Allen + Clarke, has recommended that the levy remain as it is for the 2023/24 financial year, pending the recommendations from the full analysis and completion of the review later in the year.
Manatū Hauora – Ministry of Health, with the support of Te Whatu Ora and Te Aka Whai Ora, commissioned the review to consider the use of the levy and its function under the new Pae Ora (Healthy Futures) Act 2022 following the recent health reforms.
The alcohol levy, which currently raises around $11.5 million a year, is raised from alcohol produced or imported for sale in Aotearoa New Zealand. It is currently used to support health sector activities addressing the harm caused by alcohol, such as community-based harm reduction services, policy approaches to addressing alcohol harm, New Zealand based research into the impacts of alcohol on our communities and how to address it and includes health promotion and harm prevention programmes.
Alcohol is a leading cause of preventable death, injury and ill health in Aotearoa New Zealand and a significant contributor to the social and health inequities experienced by Māori, Pacific peoples and other impacted groups.
The levy is different, and significantly smaller, than the alcohol excise tax. The review is specifically focused on the levy rather than the excise tax.
The stage one report, published today, highlights that:
- the levy had not kept up with costs in real terms over time and would be significantly higher if it had been adjusted for inflation,
- the levy is proportionately very small compared to even the most conservative estimates of the cost of alcohol-related harm in Aotearoa,
- any possible future change in the levy settings would be unlikely to have a noticeable impact on the price New Zealanders pay for alcoholic drinks.
Stage two of the alcohol levy review, expected to be completed later this year, will consider the levy settings for 2024/25 and enable more in-depth assessment of current alcohol levy spending on addressing alcohol-related harm and consider future investment opportunities.
