Victorian Auditor-General’s report 
20 June 2012 
Effectiveness of Justice Strategies in Preventing and Reducing Alcohol-Related Harm
Audit summary
Background
Alcohol is a widely accepted part of Australian culture and generates positive impacts for the state in the form of revenue and employment. The number of liquor licences has more than doubled since the Liquor Control Reform Act 1998 was introduced. There are now over 19 000 active liquor licences in Victoria.
However, the misuse of alcohol can result in significant short-term and long-term harm for individual drinkers, their families, friends and the wider community. 
Besides the detrimental effects of intoxication on health—injuries, violence, disease and death—risky levels of alcohol consumption have broader social and economic implications. A report commissioned by the Department of Justice (DOJ) estimated that the social cost of alcohol-related harm to Victoria in 2007–08 was $4.3 billion. Approximately $366 million of this, or 9 per cent of the total, was borne by the government, predominantly through policing and health services.
The Department of Health (DOH) has a coordinating role for whole‑of‑government alcohol policy development. However, DOJ, the Victorian Commission for Gambling and Liquor Regulation (VCGLR) and Victoria Police all have important roles in preventing and reducing alcohol-related harm, primarily through legislation, regulation of the liquor and licensed hospitality industry, and enforcement. 
The audit assessed the effectiveness of DOJ, Victoria Police and VCGLR’s initiatives and actions in: 
·	enforcing controls on the sale and marketing of alcohol
·	preventing and reducing the impact of short-term alcohol-related harm on the community.
Conclusions
The level of reported alcohol-related harm has increased significantly over the past 10 years. Alcohol-related ambulance attendances in metropolitan Melbourne more than tripled between 2000–01 and 2010–11, and alcohol-related assaults in Victoria increased 49 per cent. The rate of the increase in harm has slowed in recent years, but the number of reported incidents continues to rise. 
Combating alcohol-related harm is challenging and costly. The underlying causes are complex and there are numerous public and private sector stakeholders involved, many with competing interests. Although alcohol can be harmful, over 80 per cent of adults drink. Some types of licensed premises have a stronger association with alcohol-related harm than others. This presents significant challenges for agencies in policy and strategy development. 
For instance, there is clear evidence to indicate that strategies that increase the price and restrict the availability of alcohol are effective in reducing harm. However, these types of measures tend to be unpopular with the public because they increase costs and create inconvenience.
Various strategies and initiatives to prevent and reduce harm have been implemented, most notably since 2008. However, these efforts have been hampered by:
·	the lack of a whole‑of‑government policy position on the role of alcohol in society
·	poorly chosen, implemented and evaluated initiatives
·	inconsistent and cumbersome liquor licensing processes and legislation
·	the lack of coordinated, intelligence-led and targeted enforcement.
Instead of a coherent strategic framework consisting of a suite of targeted, evidence‑based, complementary and well-coordinated initiatives, DOJ’s alcohol initiatives have been largely fragmented, superficial, and reactive. Their lack of effectiveness is demonstrated by the same issues—such as the prevalence of under‑age drinking—persisting year after year, despite being highlighted in consecutive strategies as areas of particular focus. 
The liquor licensing process is complex, inconsistent and lacks transparency. Since 2009, the primary objective of the Liquor Control Reform Act 1998 has been to minimise alcohol‑related harm. However, the Act also requires liquor licensing decisions to take into account community expectations and responsible industry development. There is inevitably tension between these competing interests. 
The enforcement of alcohol-related offences committed by licensees has received greater attention since DOJ established the Compliance Unit in 2009. This unit, along with the liquor licence regulation and administration functions, moved from DOJ to the newly-created VCGLR in February 2012. 
While Victoria Police and the Compliance Unit are targeting antisocial behaviour by individuals and minor breaches of the Act by licensees, there is no overarching whole‑of-government enforcement strategy to comprehensively address unlawful supply, particularly service to intoxicated patrons and minors, which is the cause of much of the alcohol-related harm.
A fundamental change in approach to strategy development, licensing and enforcement is required before any noticeable impact on reducing harm is likely. Unfortunately, steps taken to date in developing the new alcohol and drug strategy, which is currently still in draft, suggest that opportunities for meaningful change may again be missed. 
Meanwhile, alcohol-related harm continues to rise.
Findings
Strategy development, implementation and evaluation
DOJ has devoted significant resources to minimising the harmful effects that can arise from alcohol consumption. However, the effectiveness of these efforts has been limited by poorly developed, implemented and evaluated strategies.  
The whole-of-government strategy Restoring the Balance: Victoria’s Alcohol Action Plan 2008–13 (VAAP) aimed to reduce:
·	risky drinking and its impact on families and young people
·	the consequences of risky drinking on health, productivity and public safety
·	the impact of alcohol-fuelled violence and antisocial behaviour on public safety.
There was no whole‑of‑government policy position on alcohol to guide how the competing interests of the health, business, tourism and community sectors should be prioritised and resolved in VAAP. Attempting to balance these interests resulted in a diluted and disjointed strategy. 
DOJ advised that it does not dispute the research findings that the cost and availability of alcohol influence consumption and ultimately harm. Since the law does not allow the state to use pricing as a harm minimisation strategy, it is reasonable to expect DOJ to compensate for this by providing advice on ways to significantly enhance controls over supply instead. It has not done so.
The justice component of VAAP was a series of reactive, often small-scale and 
action-based initiatives that lacked substance and cohesion and were not strongly evidence-based. There was insufficient data available on consumption patterns and alcohol-related harm to comprehensively and objectively inform the development of the strategy. Although there were some exceptions—such as the increased level of compliance with licence conditions and the risk-based licence fee structure—these actions did not collectively or purposefully contribute towards achieving VAAP’s aims.
DOJ advised that heightened community and media concerns regarding alcohol‑related harm influenced decision-making in terms of both the content and timing of initiatives. A number of actions were authorised and undertaken outside the strategic framework and without a robust assessment of how they would contribute to minimising alcohol-related harm. 
DOJ has spent approximately $67 million since 2007–08 on the development and implementation of alcohol policy, liquor licence regulation and compliance inspections. However, it has carried out only limited evaluation of what it has achieved from this significant investment.
Four years on, the issues of competing interests and data limitations have yet to be resolved. The opportunity to learn lessons from VAAP has been missed because no holistic performance evaluation has been carried out. 
There is, therefore, a real risk that the new alcohol and drug strategy currently in development will make the same mistakes as VAAP. 
Data collection and information sharing
Many of DOJ’s activities directly or indirectly target reducing excessive alcohol consumption as a means of reducing alcohol-related harm. However, DOJ cannot reliably measure its effectiveness in reducing overall consumption because alcohol sales data is not collected in Victoria. 
Although agencies individually collect data on alcohol-related harm, there is no central database to collate, analyse and disseminate all of the data available. This data includes crime statistics from Victoria Police, the Compliance Unit and councils, ambulance attendances, emergency department presentations, hospitalisations, treatment episodes and deaths relating to alcohol.
This type of database would provide a comprehensive picture of alcohol consumption and harm in Victoria. It could be used to improve the effectiveness and efficiency of efforts to minimise alcohol-related harm by addressing the information gaps that currently exist for robust strategy development, focusing enforcement and compliance activities on high-risk areas, and encouraging greater inter-agency cooperation. 
Liquor licensing regime
The liquor licensing regime is not effectively minimising alcohol-related harm due to a lack of transparency of decision-making, guidance on regulatory processes and engagement from councils. Administrative errors, poor records management and inconsistencies between liquor licence and planning permit conditions have further limited the effectiveness of the process.
Commercial interests have historically taken precedence over public health and community interests, thus compromising agencies’ ability to meet the Act’s harm minimisation objective. The planning permit and liquor licence application processes were enhanced following a series of joint reviews by DOJ and the Department of Planning and Community Development in 2009 and 2010. These reviews were comprehensive and evidence-based. However, the recommendations from these reviews were not accepted in full. 
Although there has been a recent shift towards better consideration of public health and community interests, the existing regime is still weighted in favour of the liquor and hospitality industry. The number of objections to liquor licence applications by councils is exceptionally low.
Councils’ ability to influence the liquor and hospitality industry on behalf of the communities they represent is restricted by shortcomings in the planning permit and liquor licence application processes. The grounds for objecting to a liquor licence are narrow, and the evidentiary requirements and decision-making process for contested licence applications are not clear. 
While VCGLR should provide clearer guidance on the liquor licensing process, councils should do more to work within the existing planning and liquor licensing arrangements to reduce their current sense of disempowerment and dissatisfaction. For example, councils could develop a local policy for licensed premises to guide decision-making on planning permits, or insert and enforce specific conditions on licensed premises’ planning permits. 
DOJ implemented improvements in the mandatory industry training for licensees and staff following reviews in 2009 and 2010. There are, however, some inconsistencies in how the training is delivered. As VCGLR assumed responsibility for training in 2012, VCGLR could remedy this by more closely overseeing training providers. It could also further tailor the training to better meet attendees’ needs. 
Training is important to assist licensees and their staff to understand their obligations. However, applying this training in a work environment can be challenging. Many licensees meet their legislative obligations. However, for those who are less diligent, enforcement—or the prospect of enforcement—and its associated financial penalties is likely to promote more appropriate industry practices. 
Enforcement 
Compliance inspections identify licensees’ compliance with the administrative requirements of their liquor licence, while Victoria Police is focusing on alcohol-related offences by individuals. 
The compliance inspection program is having a noticeable and positive effect on licensees’ compliance with the administrative requirements of their liquor licence. Victoria Police has successfully carried out targeted and covert operations, and implemented other proactive initiatives, such as educational programs in local communities.
However, there is no whole-of-government alcohol enforcement strategy. While there have been localised examples of joint operations, inadequate strategic planning by and between enforcement agencies means there are gaps in the enforcement approach. Victoria Police and the Compliance Unit have not adequately targeted licensees who supply alcohol unlawfully.
Compliance Unit
Of the total inspections carried out by the regional compliance inspectors in 2010–11, only 20 per cent were conducted at the weekend, which is when most alcohol-related harm occurs. Inspectors’ work patterns should be amended as a matter of priority, as the current arrangements deliver poor value-for-money for taxpayers.
The Compliance Unit has adopted an educative approach to licensees to help them understand their obligations. However, for more serious or ongoing breaches, the Compliance Unit uses disciplinary actions, enforceable undertakings, penalty notices and written warnings. 
Delays in processing these enforcement actions—which are not entirely within the Compliance Unit’s control—have allowed poorly-managed venues to continue to operate as sources of alcohol-related harm. Penalties for licensees who fail to comply with their obligations have recently been strengthened, with a demerit points system coming into effect in 2012. This initiative is expected to improve compliance rates, as consistent non-compliance will result in licences being automatically suspended. 
Victoria Police
There is no formal policy on alcohol enforcement and harm minimisation, or a statewide operational framework to guide Victoria Police’s enforcement action against licensees. Responsibility for developing and implementing alcohol policing strategy is highly devolved, with local officers planning and carrying out their own enforcement activities. The current lack of centralised direction, coordination and training increases the risk of inconsistent practices and inefficiencies through duplication of effort.
The systems and processes for recording and analysing alcohol-related crime are weak. This reduces the availability and quality of intelligence data, which constrains Victoria Police’s ability to appropriately target enforcement action to the areas and premises where action is most urgently required.
Liquor legislation
Liquor legislation is not adequately supporting enforcement activities due to unclear legal definitions and inconsistencies.
Enforcement agencies are hindered in their efforts to take appropriate action against licensees that are unlawfully supplying alcohol by unclear legal definitions, which allow subjective interpretations of the Act. These licensees are avoiding penalties and are continuing to operate, tainting the whole licensed hospitality industry. This is a poor outcome for the community and a waste of public sector resources, particularly for the police and courts.
Inconsistencies exist within the Liquor Control Reform Act 1998 itself, and between the Act and other legislation and agency guidance. Under-age drinking is a case in point. Although health bodies recommend delaying the age at which alcohol is first consumed, minors are permitted to consume alcohol in certain supervised circumstances. 
The penalty for a gambling provider that allows a minor to gamble is double the penalty for a licensee who illegally supplies a minor with alcohol. The penalty for a body corporate that sells tobacco to a minor is 10 times higher. Although the health impacts of smoking may be greater, the consumption of alcohol can result in adverse consequences—such as antisocial behaviour—that affect the wider community. 
These inconsistencies undermine efforts to minimise harm. Since the functions of the gambling and liquor regulators have recently been integrated into one body, it is an opportune time to review and rationalise legislation and processes for consistency and appropriateness. 
Recommendations
Number	Recommendation	Page	
1.	The Department of Health should, as the coordinating department for the new alcohol and drug strategy, lead the development of:
·	a coherent whole-of-government policy position on alcohol consumption and the liquor and hospitality industry
·	clear lines of accountability for alcohol policy implementation
·	a consolidated database to facilitate meaningful and accessible analysis of alcohol consumption and harm.	22	
2.	The Department of Health should: 
·	identify and apply the lessons learned from the development and implementation of Restoring the Balance: Victoria’s Alcohol Action Plan 2008–13 to inform future strategy development
·	improve the quality of data it collects on alcohol consumption and harm.	22	
3.	The Department of Justice should:
·	pilot the collection and analysis of liquor sales data from wholesalers to retailers
·	improve communication with stakeholders in the development and implementation of initiatives.	22	
4.	The Department of Justice should, together with the Department of Planning and Community Development and in consultation with local councils, overhaul the planning permit and liquor licence application processes to:
·	better address community and health concerns
·	improve efficiency
·	clarify roles and responsibilities
·	incorporate an appropriate level of consultation and scrutiny.	34	
5.	The Department of Planning and Community Development should: 
·	create a model local planning policy for licensed premises
·	require councils to adopt a local planning policy for licensed premises where there is a particular need or concern.	34	
6.	The Victorian Commission for Gambling and Liquor Regulation should: 
·	review its licensing administration practices
·	improve its records management and data integrity
·	exercise closer oversight over training providers to maintain standards and remove inconsistencies
·	tailor the mandatory industry training to better meet attendees’ needs.	34	
7.	The Victorian Commission for Gambling and Liquor Regulation and Victoria Police should: 
·	develop a comprehensive and collaborative enforcement strategy to minimise harm more effectively and efficiently
·	carry out more targeted and intelligence-led enforcement activities.	49	
8.	The Victorian Commission for Gambling and Liquor Regulation should implement robust, efficient and, where appropriate, consistent practices across its compliance functions.	49	
9.	Victoria Police should: 
·	develop stronger central leadership for alcohol enforcement policy and activities
·	improve the quality of the data it collects on alcohol‑related crime.	49	
10.	The Department of Justice should review the Liquor Control Reform Act 1998 to facilitate more effective and efficient enforcement action.	49	
Submissions and comments received
In addition to progressive engagement during the course of the audit, in accordance with section 16(3) of the Audit Act 1994 a copy of this report was provided to the Department of Justice, Victoria Police, the Victorian Commission for Gambling and Liquor Regulation, the Department of Health, the Department of Planning and Community Development, the City of Casey Council, the City of Greater Geelong Council, the City of Melbourne Council and Swan Hill Rural City Council with a request for submissions or comments.
Agency views have been considered in reaching our audit conclusions and are represented to the extent relevant and warranted in preparing this report. Their full section 16(3) submissions and comments however, are included in Appendix B.