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Wednesday, 13 May 2009
Page: 2553


Senator CORMANN (9:31 AM) —This process has become an absolute farce. Here we are. Yesterday the government, on budget day, still had to deal with this legislation, which quite frankly we could have dealt with quite effectively two months ago. The Senate gave the government three opportunities to achieve exactly the same objective as is being pursued with the Excise Tariff Validation Bill 2009 and Customs Tariff Validation Bill 2009, but of course, out of incompetence, political bloody-mindedness, a combination of the two, political pride or whatever it was, the government refused to take on board and respond to the very constructive and positive proposals made by Liberal Party and National Party senators—and, in fact, made by all senators in this chamber other than government senators. We could have dealt with this in March and achieved exactly the same objective as is to be achieved with the legislation in front of us today.

How did we get here? Let us just remind ourselves: this is a tax increase that has now been in effect for more than a year, since 27 April 2008. Where did it come from? This was a government that was desperately looking for some revenue measures. It was looking for some cash to fund its various spending sprees. No doubt there were some hollowmen in the Prime Minister’s office and the Minister for Health and Ageing’s office who thought: ‘How can we possibly sell a tax hike of $3.1 billion? You know what? Let’s apply the tax hike to alcopops and call it a strategy to address binge drinking.’ Who could fail to agree with a government that proposes to do something effective about binge drinking? We would agree if the government proposed to do something effective about binge drinking, but of course this is nothing of the sort.

How do we know this? Because clearly the hollowmen in the Prime Minister’s office and the health minister’s office forgot to talk to the people putting the budget papers together. Was there any public health target or performance measure in the budget papers where the government gave us an indication of what it was that they were trying to achieve in reducing binge drinking, alcohol abuse and alcohol abuse related harm? The answer is no. There was only one single target in the budget papers last year, and that was a fiscal target. There was a target to raise $3.1 billion in additional cash, and of course the government failed to achieve that particular objective.

Those hollowmen in the Prime Minister’s office and the health minister’s office are really quite good, you know! They must think they are real geniuses. Not to be outdone, what do they do when they realise that their genius-level plan to raise $3.1 billion in cash and sell it as a health measure would not raise that much and would in fact fall short by 50 per cent? They turn around and say: ‘Isn’t that great? It proves that what we always wanted to achieve is actually happening. It proves that binge drinking is now reducing. It proves that we are more effective at what we were always trying to achieve than we had hoped for in our wildest dreams.’ We, of course, know that that is just changing the spin as we move along. We know that the government planned to raise $3.1 billion, we know that they failed in achieving that plan and we know that whatever political strategy they implement to try and hide their failure is just that: a political strategy.

Was there any evidence when the government introduced this measure that this would be effective in addressing binge drinking? There have been various inquiries, and I will not bore the Senate by going through all of the detail again, but suffice it to say, no, there was no evidence. There was no evidence if you looked at what happened internationally where other jurisdictions had tried similar things—Germany, for example. There was clearly evidence that measures like this had failed. There was no evidence that alcopops were actually the drink of choice for problem drinkers; in fact, the Australian Institute of Health and Welfare data clearly demonstrates that the drink of choice for problem drinkers is beer for males of all ages, spirits or liqueurs for females up to the age of 29 and white wine for females older than 29.

Essentially, the government never even went out of their way to substantiate properly the political strategy—the con job that they tried to pull on the Australian people—trying to sell a bad, old-fashioned Labor tax grab as a health measure. They did not even do their homework to pull all the strings together properly when they introduced it. They did not put any targets in the budget papers in terms of what they were trying to achieve from a public health policy point of view and they did not put any evidence forward that this was actually something that was likely to be successful. Clearly, indications were that the Senate saw it for what it was from the outset: a tax grab and not a health measure. No doubt this is why the government waited for nearly a year before they dared to come into this chamber to ask the Senate to pass validating legislation and to support moving forward the tax increase being imposed.

It took them nearly a year. We were pretty concerned about the time it took the government to actually come and be accountable to the Senate and the parliament, and to ask the parliament to deal with the tariff proposals that they had implemented. Given that had happened we thought there might be some evidence after 11 months of operation that this measure had actually been effective. We asked questions through Senate estimates and we put questions on notice. It took us a long time to get answers to even the most basic questions, like ‘How much additional revenue have you raised as a result of these measures since it was introduced?’ The government was ducking and weaving, not wanting to answer it. And no wonder, because they knew what we wanted to know—that they were failing to meet their only target, which was a fiscal target.

Then we had another Senate inquiry, and every public health organisation that had been supportive of this measure and, to be fair, continues to be supportive of this measure, came and gave evidence. We asked if there was any evidence at all that this measure had been successful in reducing binge drinking, in reducing alcohol abuse and in reducing alcohol abuse related harm. The answer was no. Not one single witness was able to point to any evidence that this measure had been effective in reducing binge drinking, alcohol abuse or alcohol abuse related harm.

What is the government’s evidence? The government’s evidence is, ‘Well, sales of RTDs have gone down in 2008-09.’ They do not know who no longer purchases RTDs, they do not know who is drinking less, they do not know whether it is responsible drinkers who are drinking less or whether it is problem drinkers who are drinking less: they have got no idea. In fact, not only have they got no idea but they did not even try to find out, as per the evidence provided by Treasury and the health department through our various Senate processes. They did not even try to find out. Do not ask the question if you do not want to know the answer is all I can say to that.

So the government is saying reduced sales equals reduced consumption equals reduced abuse. I do not agree with that logic. It is flawed logic and it is dishonest logic, but let us just for one second assume that the government’s logic is correct. Let us just agree that reduced sales means reduced consumption means reduced binge drinking. Guess what? Do you think the government expects sales to continue to go down? What do you think the government expects to happen with the sales of RTDs moving forward? Remember the $3.1 billion fiscal target became $1.6 billion? That $1.6 billion figure is based on the premise that sales of RTDs will go up again as of 1 July 2009 by 7.8 per cent every year. Either the government has got that wrong as well, and the revenue is going to be even less than what we have been led to believe, or the government is budgeting for an increase in the sales of RTDs moving forward. Some of us have described that as the government actually still banking on a binge, not trying to prevent a binge.

The government delayed introducing this legislation until the last minute. They must have had an inkling that just perhaps the Senate may be suspicious whether what the government has put forward would be an effective way of addressing binge drinking. They must have been suspicious that perhaps they did not have the support of the Senate. So here we were, five minutes to midnight, not only dealing with legislation to validate the revenue collected so far but with the government asking us to support the increased tax moving forward. The opposition have been on the record consistently all throughout. We do not support this tax grab, which the government has dishonestly sought to sell as a health measure. However, we have also been consistent in saying that we did not think it was practical or appropriate for the money that had been collected so far to be returned to the liquor industry. This is why we moved amendment after amendment, to give the government the opportunity to validate.

Even at the third reading stages the coalition, together with the Greens, moved an amendment urging the government to introduce validating legislation forthwith. At her press conference, the Minister for Health and Ageing was putting political pride ahead of good outcomes. She was being stubborn, belligerent—whatever you want to call it—but she was not going to come on board with the very constructive suggestions made by the Greens and by the coalition to validate the revenue collected so far to help the government out of a spot of bother. ‘No, no, no!’ said the minister for health, ‘If this is what happens, if the Senate does not support our tax hike totally the way we want it, the money has to go back to the liquor industry.’ How ridiculous is that? What an absolutely negative approach to public policy and public administration!

But, sure enough, here we are two months later. Clearly the Treasurer, the Prime Minister or somebody must have had a quiet word in the minister’s ear. They must have said, ‘Hang on; let’s have another look at this. We don’t think it would be a good look for the Rudd government to return $300 million, $400 million or however many million dollars have been collected so far to the liquor industry. Perhaps, just perhaps, the suggestions made by Liberal and National Party senators and by the Greens were worthy of support.’ And here we are dealing with what we have been calling for now for more than two months—that is what we are dealing with today.

Let me address an issue of concern, and I know that other senators on the crossbench will raise this issue as well. Tariff proposals are important tools of public administration. The reason for tariff proposals is so that governments are able to collect excise customs duty as soon as a measure is announced. In the absence of a tariff proposal people would bring forward their purchases of goods to avoid paying the increase and the government would forgo revenue on these purchases brought forward. So that is quite appropriate—it is a mechanism that we have used in government; it is a mechanism that you will continue to use in government; it is a mechanism that governments of both persuasions will use into the future. But what this government is proposing to do is to abuse that particular tool of public administration. The government is seeking to use, moving forward, the tariff proposal method to circumvent the express will of the parliament.

We are now no longer talking about the government putting in a fresh tariff proposal proposing a particular increase in excise customs duties or whatever and then putting it to parliament for parliament to make the final decision—with, in most cases, parliament ticking off on that. What we are now talking about is the situation where the parliament, having gone through a very thorough debate—a debate that has involved two Senate inquiries scrutinising, exploring, checking, asking questions and trying to find out whether what the government told the Australian people they were trying to achieve with this measure would in effect be achieved—having gone through hours and hours of debate in the House of Representatives and in this chamber, has rejected the government’s proposal. The parliament—whatever you think of it; for better or for worse—rejected the government’s proposal.

As a measure of goodwill, we the opposition, along with the Greens and other non-government senators in this chamber, offered the government an opportunity to get themselves out of a spot of bother that they got themselves into—the spot of bother being that they collected revenue without legal foundation if it was not validated by this parliament. That was the circumstance they found themselves in at the end of March because they did not support any of the requests for amendments that we successfully passed in the Senate at that point in time. So right now unless we pass its legislation today the government has collected revenue without legal foundation. As a measure of goodwill and in good faith we have said to the government, both during the debate in March and since then, that we will support the validation of the revenue collected so far because we do not think it would be appropriate for it to be returned to the liquor industry.

But what are the government now trying to do? Not only are the government going along with what we have put forward in good faith; they are now turning around and proposing to reintroduce the same measure as a tariff proposal despite the express and stated views of the parliament of Australia. This parliament has explicitly and expressly rejected what the government proposed. Quite frankly, if the government want to pursue this increased tax moving forward then they should come back to this parliament and get its endorsement before they keep collecting this tax. In fact, in the context of this second reading debate and to facilitate smooth progress in the committee stage of the bill, I would urge the parliamentary secretary to respond to the following question. What will happen in the event that the Senate persists with its position adopted in March when this legislation comes back before this chamber? We are told informally that this will be in June—that once the three-month period has elapsed the government will again, as part of their political strategy, load the double dissolution trigger. This is obviously what this is all about: what fits with the political strategy of the government not what is good public policy and in the public interest.

But let us just take the government at their word that they will reintroduce this legislation in June. What will happen if the parliament rejects this legislation again? Will you continue yet again to collect the excise? Will you continue to collect it until May next year, for 12 months, in spite of the parliament’s express intentions? That is what you have done since we as a parliament rejected your proposed increase in taxes in March this year. You have continued to collect it, irrespective of what the parliament’s decision was, because you worked on the basis, ‘Well, we can collect it for 12 months.’ As I understand it, you have sought and obtained legal advice to that effect. However, whatever the legal circumstance, it is a question of what is right and what is proper here. If this legislation were to be defeated twice in this parliament then it would not be appropriate for the government to continue to thumb their noses at the parliament and say, ‘We don’t care what you say. We will continue to do what we want to do irrespective of the parliament’s wishes.’ I remind the government they are accountable to the parliament. (Time expired)