Experts believe proposed reforms to the Australian tax system will be good for preventative health and the environment.

The Henry tax review, released yesterday, proposes disincentives for smoking, alcohol consumption and the use of private transport, in line with recommendations from the Federal Government’s Preventative Health Task Force.

Public Health Association of Australia president Mike Daube, who was also on the task force, was optimistic about the review.

“Overall it is enormously encouraging to see the tax review being so consistent with the health recommendations,” Professor Daube said.

He says raising the cost of cigarettes and alcohol are the single most important means of reducing consumption.

“It’s a very big step forward,” said Professor Daube, who describes the present alcohol tax system as a “dog’s breakfast”.

However the Government says it does not plan to introduce a volumetric tax on alcohol at this stage.

The proposed tax would make drinks containing more alcohol more expensive.

“At the moment we’re seeing cask wine being advertised at $2 a litre,” Professor Daube said.

“That means that we’ve got cask wine cheaper than some soft drinks and even cheaper than some bottled water.”

National Alliance for Action on Alcohol spokesman Todd Harper also wants the volumetric tax.

“It’s been shown a 10 per cent increase in the price of alcohol leads to approximately a 5 per cent reduction in consumption,” he said.

“It has an extremely powerful impact.”

Mr Harper says a 2009 survey by VicHealth, of which he is also chief executive, shows two-thirds of the community support taxing drinks based on their alcohol content.

“There is not only economic support and public health support, but also community support for that reform,” he said.

Matter of time

But while Professor Daube and Mr Harper are disappointed the tax has not been adopted by the Government, they believe it is just a matter of time before it is introduced.

“I believe it will be introduced in the next few years,” Professor Daube said.

He says while there have been recommendations for a tobacco tax for a long time, this is the first time Treasury has provided such a clear recommendation on alcohol tax.

Just days before the release of the review, the Government announced a new anti-smoking policy which included a 25 per cent increase in tobacco excise.

Funds raised are to go toward supporting the Government’s proposed revamp of the health system.

The Government says it will also introduce plain packaging for cigarettes by 2012, introduce a ban on internet advertising of cigarettes and fund a large public education campaign.

“On tobacco you’d have to say Australia is now simply the world’s leading country,” said Professor Daube, who is also director of Curtin University’s Public Health Advocacy Institute and president of the Australian Council on Smoking and Health.

“I think other countries are going to follow suit. I think it’s just a real landmark.”

Road tax

The tax review also recommends a road user tax, which experts say will also have impacts on public health and the environment.

Urban public health expert Dr Chloe Mason, from UTS Institute for Sustainable Futures, says the proposal to make it more expensive to drive during peak hour would reduce the number of cars on the road and encourage improvements to public transport.

Dr Mason says this would encourage walking, cycling and public transport use and reduce pollution and injury from motor vehicles.

“The review is very clear about the use of the tax and transfer system to be used to create the type of society that we want for the future,” she said.

For example, Dr Mason says the review highlights the negative impacts of fringe benefit tax concessions for motor vehicles.

“The taxation system is creating an incentive for individuals to travel additional kilometres to reduce the taxable value of their car,” she said.

Dr Mason says the revenue from scrapping this could be used for better bus services and cycleways.