It’s one of the most cited numbers in Australian politics: alcohol costs Australia $36 billion every year in preventable death, illness, inquiry and lost productivity.
Unsurprisingly it has become a centrepiece of the Senate inquiry into personal choice and community impacts – you might know it as the “nanny state” inquiry – which began its hearings last month.
In their submissions to the inquiry, the Australian Medical Association, the Alcohol Policy Coalition, the Foundation for Alcohol Research and Education, the Public Health Association of Australia, the Royal Australasian College of Physicians, and the Australasian College for Emergency Medicine all cite the $36 billion figure to variously justify higher taxes on alcohol, or more controls over alcohol supply, marketing and licensed venues.
The media loves this number, mainly because they love big numbers.
Public health activists and academics love this number too, because they hate being called nanny staters and wowsers. The $36 billion figure is useful because it purports to take the question of whether government should regulate people’s personal choices out of the domain of morality and philosophy and into the domain of economics and rationality.
But it is absolutely meaningless in any policy-relevant way.
And it ironically reveals how philosophical questions cannot be separated from the debate over paternalistic restrictions on alcohol.
The figure comes from a 2010 study conducted by the Alcohol Education and Rehabilitation Foundation.
The 13 authors of the paper came to $36 billion by piling on as many “costs” of alcohol as they could imagine. They took the full kitchen sink approach. They included everything from the lost productivity of workers affected by alcohol, to the cost of hospitalisation of children who have been abused by adults believed to be affected by alcohol.
Even where the connection to alcohol is tenuous – the fact that some crimes are committed by people who have alcohol in their system does not mean that alcohol causes those crimes – they derived costs and added them into the big headline number.
It is a credit to their creativity that the authors managed to add a further $20 billion to the $15 billion social cost of alcohol found by a study published by the Commonwealth government in 2008.
But the policy question is not whether alcohol consumption has costs. All choices have costs. The question is whether those costs outweigh the benefits from alcohol consumption. Costs are meaningless if they are not paired against benefits.
And as the economists Eric Crampton, Matt Burgess and Brad Taylor point out in an important paper, these sorts of social cost studies dismiss the benefits of alcohol by leaning heavily on an assumption that drinkers are uninformed or irrational, and therefore do not really “benefit” from drinking.
It’s a revealing move, because it shows how even this most rationalistic and economistic argument for alcohol regulation ultimately comes down to an assertion that people just don’t know what’s good for them – and that others do.
In fact, as the 2008 study found, the direct costs to the public healthcare system of alcohol consumption are much more modest: about $2 billion a year. This might still seem like a lot. But the government received more than twice that from the excise on alcohol sales: $5.2 billion.
You often hear in debates about paternalism that the government wouldn’t care about what we ate or drank if it weren’t for the fact that taxpayers pay for the consequences of those choices through the public health system. Hence we need to regulate alcohol and reduce alcohol consumption for the budget’s sake.
Even if the excise on alcohol didn’t more than recover the direct healthcare costs of alcohol, this would still be one of the most counterproductive arguments in politics.
First, the argument suggests that a public health system is incapable of handling the freely-made health choices of its customers. Second, it suggests that the corollary of public health provision is state control over our bodies and what we choose to put in our bodies. And third, it suggests that there is no “right” to public health care – rather that access to health care is contingent on making the correct health decisions.
Far from being a defence of the nanny state, this argument looks like a rather powerful attack on the notion of a publicly funded and universal health care system. I’m guessing this is not the intention.
Helping launch the nanny state inquiry last month Sam Dastyari told the ABC that “ideology has just been dead in Australia for too long. Let’s actually have some big debates, let’s have some different views”.
Like it or not, the debate about restricting what we drink, eat and otherwise consume cannot avoid ultimately considering deeper philosophical questions about the relationship between individual and government.