Taxing wine and cider the same as beer and lifting the rate by 5¢ to 6¢ for a glass of beer would raise $2.9 billion a year, much of which could fund tax relief, the Treasury has been told.

In its pre-budget submission, the Foundation for Alcohol Research and Education says if the Turnbull government adopted the recommendation of the Henry tax review and taxed all alcohol products by the volume of alcohol they contained, alcohol consumption would drop almost 10 per cent.

At present wine is taxed on the basis of price rather than volume and much of it is exempt meaning that although wine makes up 40 per cent of the alcohol consumed, it accounts for only 15 per cent of the tax collected.

The submission suggests taxing all alcohol at a rate of $56.46 per litre, halfway between the rates applying to full-strength draft beer and spirits. The first 1.15 per cent of alcohol in a beverage would be tax free.