Costs and cost savings
- Alcohol harm to individuals, families and society is estimated to cost around $7.85 billion per year. Lost output/productivity constituted a major proportion of the total costs, in combination with police, justice and health costs. This high level of harm, and associated cost, is avoidable.
- A study of the impacts of alcohol use on workplace productivity in New Zealand found that the annual societal costs resulting from absence and reduced performance were estimated to be $1.65 billion.
Impact of alcohol prices on cost savings
- Studies show that increasing the price of alcohol is associated with reductions in alcohol-related diseases and injury outcomes, alcohol-impaired driving, motor vehicle crashes and injuries, death from cirrhosis, alcohol dependence, sexually transmitted infections, suicide, and violence (including rape, robbery, and violence towards children).
- Raising the price of alcohol is the most cost-effective measure to reduce alcohol consumption (in terms of cost per health life years gained), compared to other alcohol policy intervention.
- The Ministry of Justice estimated that increasing alcohol excise taxes by 82% would result in net societal cost savings of $339 million in the first year and $2.45 billion over ten years. A minimum unit price of $1.20 would generate net societal savings of $86 million in the first year, and $624 million over ten years.
- Alcohol is a key contributor to road traffic crashes and transport-related injury. The higher the level of alcohol in the blood of a driver, the higher the chance of a road crash.
- In 2018, 125 (33%) of the 378 deaths on New Zealand roads were alcohol-related.9
- Many of the deaths are victims of drunk drivers. In the years 2016-2018, for every 100 alcohol or drug-impaired drivers or riders who died on New Zealand roads, 30 of their passengers and 25 road users died with them.
Impact of alcohol prices on road safety
- Increases in alcohol excise tax are highly cost-effective in reducing alcohol-related road injuries. One New Zealand study found that a one-off excise increase would lead to substantial cost-savings for society over their lifetime, mainly due to reduced costs associated with lost productivity, justice/legal proceedings, and vehicle damage (combined amount $240 million). The excise increase also generated an extra $370 million in revenue. Māori and males were found to be the main beneficiaries of reduced harm from traffic injuries following excise increases.
- Alcohol is responsible for a third of all violence (33%), a third of all family violence (34%), half of all sexual assaults (54%), and homicides (49.5%).
- One New Zealand study found that 71% of respondents experienced at least one harm because of the drinking of a stranger or people they did not know very well. Half of these respondents would go out of their way to avoid drunk people and places. Nearly a third had been verbally abused by strangers, and around 15% indicated their property had been damaged.
- New Zealanders commonly report alcohol and drug issues as key safety concerns in their communities.
Impact of alcohol prices on community safety
- In New York, it was found that a 10% tax increase on all alcohol products had a modest effect on alcohol-related violent victimization, which comprised around one-third (30.5%) of all victimization events. By beverage types, a 10% tax increase on all alcohol products had the greatest effect in reducing alcohol-related homicide among heavy drinkers who preferred spirits, from 6.5 per 100,000 to 3.7 per 100,000.
Safer and more productive workplaces
A safer workplace for hospital staff in emergency departments
- Healthcare professionals are often at the forefront of addressing the harm from alcohol, especially those working in our busy Emergency Departments. With reduced drinking in the population, alcohol will be less of a burden on their workloads (through fewer presentations for falls, injuries, etc.) and they experience less alcohol-related aggression, verbal and/or physical abuse.
- A 12-month study of presentations to the Auckland City Hospital Emergency Department (ED) in 2018/19 found over 5,000 (7%) ED admissions were alcohol-related.
- Throughout EDs department in New Zealand, staff report being assaulted, abused or intimidated by intoxicated patients. For example, a study at Wellington City Hospital found that one-half of the ED staff reported ever being assaulted by an intoxicated patient while at work. Nurses had the highest exposure to assaults. Almost all respondents described the negative impact of alcohol-related presentations on workload, waiting times and effects on other patients.
Safer workplaces and improved productivity
- Lost output is a major contributor to the costs of alcohol harm. In 2005/06, it was estimated that lost output due to harmful alcohol use cost $1.76 billion, which represented slightly less than one half of all tangible costs for alcohol and one third of all social costs. Three-fifths of the costs of alcohol lost output were due to excess unemployment ($1.1 billion), followed by premature death ($0.46 billion).
- Another study of the impacts of alcohol use on workplace productivity in New Zealand found that the annual societal costs resulting from absence and reduced performance were estimated to be $1.65 billion. Co-workers experience many of the negative impacts resulting from their colleagues’ absenteeism or presenteeism due to alcohol.
Impact of alcohol prices on productivity
- In 2014, the Ministry of Justice estimated that:
- an 82% excise increase on alcohol products would reduce the annual costs for alcohol-related lost productivity by $59.85 million. The greatest reduction would be in the costs for unemployment, followed by the costs for impaired productivity, absenteeism, and pre-mature deaths.
- a $1.20 minimum unit price would reduce the annual costs for alcohol-related lost productivity by $19 million. Similarly, the greatest reduction would be in the costs for unemployment, followed by the costs for impaired productivity, absenteeism, and pre-mature deaths.
Better physical and mental health
- Alcohol use is associated with over 200 health conditions.
- A large body of research demonstrates the links between alcohol and poor mental health. Mental health issues may fuel alcohol use and alcohol use (particularly heavy drinking) can cause some mental health conditions.
- Alcohol consumption certainly contributes to our country’s alarmingly high suicide rates. Alcohol-use disorders are second highest in prevalence in suicide victims, following mood disorders. In 2017, over one third (31.1%) of all New Zealanders who had committed suicide had alcohol in their system, and a further 26.2% had a trace of alcohol in either their blood or urine. A single occasion of drinking, especially at high levels, significantly increases the risk of suicide attempts.
- Alcohol use disorders have also been found to be a major risk factor for the onset of all types of dementia, especially early-onset dementia. Alcohol consumption over time is associated with detrimental effects on brain structure.
Impact of alcohol prices on health outcomes
- In 2014, the Ministry of Justice estimated that:
- an 82% excise increase on alcohol products would reduce the annual costs for alcohol-related deaths, injuries, and diseases by $83.3 million. The greatest reduction would be in ACC costs (i.e. injuries), followed by the costs for hospital admissions for acute harm, specialist addiction services, and pharmaceuticals.
- a minimum unit price of $1.20 would reduce the annual health costs for alcohol-related deaths, injuries, and diseases by $22.91 million. The greatest reduction would be in ACC costs (i.e. injuries), followed by the costs for hospital admissions for acute harm, specialist addiction services million, and pharmaceuticals.
- Suicide rates among young men appear to be responsive to alcohol price increases. A US study showed that increases in the excise tax on beer were associated with reductions in youth suicide rates across all age groups (10-14, 15-19, and 20-24).
- Alcohol price increases in the United States have been shown to be associated with reduced intimate partner violence, but not with female deaths from violence.
- Alcohol is a Group 1 carcinogen, which means that there is sufficient evidence to conclude that alcohol causes cancer in humans. Seven types of cancer are causally related to alcohol use, including bowel, female breast cancer and liver cancer. There is no safe level of alcohol consumption with regards to cancer risk.
- One in every 25 deaths from cancer in New Zealand are due to alcohol use (for New Zealanders aged <80 years). In relation to female breast cancer specifically, it was estimated that 14.0% of deaths in New Zealand were attributed to alcohol use.
- In 2007, 30% of all alcohol-related deaths were from cancer. This was higher for women (44%) than men (23%).
- Breast cancer is the leading cause of alcohol-related death among New Zealand women. More than a third of alcohol-related breast cancer deaths in New Zealand women were found to be attributable to regular alcohol use of less than two standard drinks per day.
- There remain significant inequities in alcohol-attributable cancers. Higher proportions of cancer among Māori are due to alcohol, with an average of 12.7 years of life lost from alcohol-attributable cancer compared to 10.1 years for non-Māori.
- Alcohol is involved in a substantial proportion of New Zealand’s high rates of family violence. It is estimated that at least one-third of the ~130,000 family violence investigations by New Zealand Police each year involve alcohol and/or drug use. This figure likely underrepresents the true prevalence, given the significant under-reporting of family violence to the police. Family violence in New Zealand is estimated to account for 41% of a frontline police officer’s time.
- Alcohol use has been consistently found to increase the likelihood and severity of domestic violence.
- Wahine Māori, in particular, are more likely to experience violence committed by someone under the influence of alcohol.
Improve child wellbeing and better child development
- Alcohol use is clearly implicated in family violence in New Zealand, exposing children to high levels of distress and hurt. Child wellbeing can also be compromised when hazardous drinking and alcohol-related harm affect caregivers’ work attendance and employment, exacerbating the risks of family poverty.
- Children are at high risk of death from maltreatment when they live with caregivers who abuse alcohol. In one New Zealand study, 17% of respondents who had a heavy drinker in their life reported that their children were negatively affected (e.g., being verbally abused, witnessed violence) by this person’s drinking.
- In the Auckland region, children have been found to be present in up to 69% of family violence incidents that were investigated by the Police.
- Children’s exposure to family violence can have irreversible effects on children’s development. Exposure to family violence has been shown to negatively impact children’s brain development, with adverse effects on cognitive development particularly evident among children exposed to trauma in the first two years of life.
Reduced alcohol use during pregnancy and fewer New Zealanders affected by Fetal Alcohol Spectrum Disorder (FASD)
- Alcohol is a teratogen, an agent or substance known to alter the course of normal foetal development. There exists no universally safe level of exposure.
- The pattern of drinking before pregnancy plays a large role in continuing to drink during pregnancy.
- It is estimated that one-half of all pregnancies in New Zealand may be alcohol-exposed.
- Fetal Alcohol Spectrum Disorder is a diagnostic term used to describe impacts on the brain and body of individuals prenatally exposed to alcohol.
- The negative impacts on the brain and body of individuals prenatally exposed to alcohol leads many individuals with FASD to experience significant challenges in their daily Many will need support with motor skills, physical health, learning, memory, attention, emotional regulation, and social skills.
- It is estimated that between 600 and 3,000 babies are born each year with FASD in New Zealand. Around half of the children and young people in Oranga Tamariki care are estimated to be affected by FASD.44
- Each individual with FASD is unique and has areas of both strengths and difficulties which are important to recognise and support.
- International studies found that:
- between 10-20% of people in prisons and other correctional settings have FASD
- around 80% of adults with an FASD will not be able to live independently without some level of support
- children and adolescents with FASD have a 95% lifetime likelihood to experience mental health issues
- Individuals with FASD have a higher risk (up to five times greater) of suicidal behaviour than the general population, due to impaired brain functioning, inability to control emotions and other factors such as mood, shame, and depression.
- It is estimated that the mean annual cost for children with FASD was $22,810 (NZD$33,902) and for adults was $24,308 (NZD$36,128). By way of a cost comparison, the authors estimated the annual economic impact of FASD was higher than that of autism, asthma, or epilepsy.
- Annual costs of lost productivity from FASD in New Zealand are estimated to be $NZ49 million to $NZ200 million.
- Less drinking will improve the wellbeing of people that surround heavy drinkers. New Zealand research has shown that persons with greater exposure to heavy drinkers in their life are less satisfied with their life, health, personal relationships, and have lower community connectedness. They also report experiencing more pain, discomfort, anxiety and
- A New Zealand study also found that alcohol consumption has a negative association with aggregate happiness – that is, although high-risk drinkers may be a minority, their behaviour adversely affects the wellbeing of us all.
- Alcohol is often used to mask our feelings, and anxieties about ourselves, cope with pain or self-medicate. With less drinking and less alcohol harm, we would be more accepting of healing, and allow proper connection not only with ourselves but with our family and people around us. There would be a deeper connection to our identity and our culture.