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Wednesday, 25 February 2009
Page: 1763

Ms LEY (11:51 AM) —I am pleased to speak today on the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009. It is important at the outset to reiterate that the coalition does not deny that there is a binge-drinking problem amongst some in society, and we are very concerned about those problems. The member for Petrie just mentioned the ad campaign ‘Don’t turn a night out into a nightmare’. I actually want to congratulate the government, because that is a good ad campaign and I think it does cut through to young people. The coalition is, however, opposed to these bills because they seek to validate a substantial increase imposed on one category of alcohol products: ready-to-drink beverages, RTDs or alcopops, as they are known.

The coalition is strongly of the view that the government’s ready-to-drink alcohol beverages tax increase is extremely unpopular and has failed on both social and economic grounds. The government has provided no credible evidence that it is working from a health perspective. It claims that it increased these taxes as a health measure—a measure aimed at cutting the rate of binge drinking, particularly among young women—but it is nothing more than a tax grab. It is a measure that was drawn up deep within the Ministry of Finance and Deregulation to boost the budget bottom line. On both health and tax counts it is a failure, and the bills before the House are purely about the tax impact. The increase in excise on RTDs of nearly 70 per cent, from $39.36 per litre of alcohol content to $66.67 per litre of alcohol content, will raise $1.6 billion across the forward estimates. That is less than the estimated $2 billion when the tax hike was first mooted and far less than the $3.1 billion estimated in the last budget. In fact, current estimates are that the government has collected somewhere between $220 million and $345 million with this tax binge. On the one hand it is an extraordinarily large sum of money; on the other hand it is not as much as the government expected, simply because the quantity of alcohol consumed in these drinks has gone down. The quantity of alcohol consumed in other drinks has gone up.

Ready-to-drinks are now to be taxed similarly to full-strength spirits rather than at the same rate as full-strength beer, which more appropriately reflects the alcohol content of RTDs. Let us look at some opinions within the Australian community, because our communities are keenly aware that the tax is not working. Recent editorial pieces express the widely held view that the RTD tax increase has been a failure and should be reversed. For example, I will quote from the editorial which appeared in the Australian on 6 February 2009, headed ‘Policy on the rocks’. It states that the government’s alcopops tax is:

… a triple-distilled fib and the Government has now been caught. Certainly, sales of mixed drinks have gone flat, with the liquor trade estimating a 42 per cent decline. The tax is now expected to generate only half the additional income originally anticipated. But there is also evidence that instead of cutting down, people have just switched drinks, taking up straight spirits instead.

The editorial in the West Australian on 24 January 2009 states:

The alcopop strategy has been unravelling since it was announced. It has been revealed as a ham-fisted attempt to cloak a heavy tax in the guise of a health message. If the Government has evidence of the tax’s effectiveness, it must produce it or accept that it is a failure.

The government cannot ignore headlines such as these: ‘Alcopops tax turns out a revenue fizzer’, ‘Alcopop sales down, spirits up’, ‘Young turn to spirits’, ‘Alcopop tax slug “failure”’ and, from an editorial in the Australian, ‘A lesson in spending—Consumers will defy central planners if it suits them’, which I think has some very strong messages for all governments.

Reports prepared by Access Economics for the Distilled Spirits Industry Council of Australia on trends in alcohol related hospital use by young people since introduction of the alcopop tax found that data collected so far did not support claims the alcopops tax had reduced risky drinking by young people. Hospital admissions for young people aged between 12 and 24 years per 100,000 population for alcohol related diagnoses in May and June 2008 were higher than in the same months in previous years. Emergency department presentations by 12- to 24-year-olds per 100,000 population for alcohol related causes were higher in May to August 2008 than in previous years. There was also an overall increase for the months after the RTD tax relative to the months before. Combined admissions and ED presentations for females were substantially higher than in previous years and also higher than in the months before the tax rise in 2008. Access Economics did say that the time frame was too short to draw firm conclusions, but it concludes that the tax may not have reduced alcohol consumption by young people, because they may have switched to other products. A switch potentially enabled them to buy more alcohol for the same budget than prior to the RTD tax.

There is a widespread consumer view that the RTD tax increase is opportunistic, unfair and ineffective. Let us look at a recently commissioned Galaxy poll which revealed that nearly 80 per cent of respondents believe that the tax increase is ineffective at addressing binge drinking. Further, nearly 80 per cent had the view that the tax should be scrapped in favour of a more comprehensive strategy to tackle binge drinking.

If we look briefly at the German experience, the German Federal Centre for Health Education in Cologne conducted research into teenage alcohol consumption in Germany over the period 2004 to 2007. In August 2004 legislation was enacted imposing a special tax levied exclusively on RTDs, the stated purpose of which was to introduce higher prices and reduce consumption. While total overall regular consumption of alcohol amongst teenagers aged 12 to 17 years decreased in the first year, 2004, consumption by this age group exceeded 2004 levels by 2007. Furthermore, an overall increase in consumption occurred despite the increased taxes and prices on RTDs and despite a significant decrease in the consumption of spirits based RTDs. The research found a significant overall increase in alcohol consumption for girls aged 16 to 17, which was reported to be primarily due to increased beer consumption. An additional trend of increased consumption was reported for males aged 16 to 17 over the three-year period. Overall, the quantity of alcohol consumed per capita amongst 12- to 17-year-olds increased over the period 2004 to 2007.

I use that experience to illustrate a trend, experienced elsewhere, which clearly is being closely followed in Australia. We can talk statistics, and people on either side of the House frequently bring their own statistics to support their own particular arguments—that is understood—but, as a local member, I contacted many of the liquor outlets in my electorate once this tax was introduced, and the change in behaviour and the speed with which that behaviour changed were remarkable and were reported by every single liquor outlet.

I think this is an irresponsible measure by the government, because we have seen from the emergency department statistics that it encourages young people of a certain age to drink more than is good for them, to write themselves off and to treat alcohol in a way that is very damaging to their health. But we know that that is going to happen anyway. We know that binge drinking is a problem regardless. The opposition has quoted the New South Wales Commissioner of Police, Andrew Scipione, who says the New South Wales Police Force have had enough. I know that they have had enough. If you talk to police at the front line after midnight in any of our major cities, they will tell you they have had enough. Binge drinking is an awful problem. The violence associated with it—and it is not just alcohol; it is clearly drugs as well—is not something we should be asking our police forces to deal with on a day-to-day basis. For goodness sake, it is all in the name of entertainment! After hearing the government’s quotes, my question is: are the New South Wales Police Force or any police force suggesting that the number of call-outs to fights in pubs and on the main streets of our towns has decreased after the introduction of this tax? I think the answer is no. It probably has not changed, and there may be a trend for it to increase anyway. But there just is not evidence that this tax is reducing binge drinking among young people.

The government has been confused and incompetent. The Minister for Health and Ageing blamed former Prime Minister John Howard for binge drinking. She criticised the member for Hinkler for displaying the Bundy bear in his office, as if that were somehow sinister and evil. She is desperate to make this about anything but the evidence and the tax. The Treasurer insists that the tax is to protect the surplus but the minister for health says it is to reduce female binge drinking. Can’t they get their stories right? If the tax is to fight under-age drinking, why was there no advice from the Department of Health and Ageing before the tax was introduced? Labor are confused. I do not think they know what they have taxed. They talk about all these brightly coloured sugary drinks and young women, but in fact three-quarters of premixed drinks are based on coca-cola and consumed by men over the age of 24. To me, there is something irrational and intensely irritating about this debate. From my perspective as a parent and a legislator, this is bad legislation. It raises a tax to tackle a social problem in a totally ineffective way.

Listening to many of the government speakers, I detect a bias against those who choose to drink this type of alcohol rather than other types of alcohol. It is as if on the one hand we have a smart, sophisticated demographic drinking fine wine in moderation, and then on the other hand we have young people binge drinking on sweet, sugary rubbish and unable to control themselves. It is not all about young people. We should not scoop them all up as one group. We certainly should target young females as being in serious danger of binge drinking. But, if indeed this group does have trouble working out and controlling its alcohol consumption—and there is no doubt that that happens from time to time—the question for this parliament is: is this the right way to tackle it? Clearly it is not.

I have gone straight to the horse’s mouth and spoken to young people from my electorate. I would like to read directly from comments made by one 18-year-old girl. She said:

When the alcopop tax was introduced, my friends and I switched to buying spirits and mixing our own drinks. Since then we and other young people, particularly girls, have developed and are developing a tolerance and liking of stronger drinks.

This can become a dangerous situation when everyone in a group is drinking, getting drunk and still deciding on their own neat alcohol quantity. Wouldn’t the government, and parents, prefer that what we drank could be measured?

People will drink if they want to drink, and the safe drinking culture that the government is apparently trying to harness is not being helped by this tax.

As I said, that was straight from the horse’s mouth. I have also spoken to some parents who are constituents in my electorate, and I want to read a couple of comments from them. One mother said:

I honestly believe that an alcopops tax won’t solve the problem of our young people binge-drinking. Education about the dangers of binge-drinking is more important and it should start early at home by parents and be reinforced by schools.

Unfortunately if kids want to drink they will always find a way, we as parents should be helping them by teaching them the responsible use of alcohol, not by thinking if we make it too expensive they won’t drink. That’s where education and schools can be vital tools to help curb the growing problem.

As the mother of three daughters I find that marketing targets young girls to the alcopops drinks. I’m not sure if taxing the drink will make any difference to their drinking habits—I’m sure they will just switch to another cheaper kind.

Another mother said:

When the price of alcopops increased, the initial reaction from my 19 year old daughter & friends was to buy a large bottle of spirits, and not enough coke etc—

to go with it—

They did not know what ratio was required with a mixer and their drinks were far too strong.

Now they are buying cheap casks of wine they call ‘goon’, and still drinking too much.

My young sons … drink beer so the alcopop tax did not affect their drinking style.

I think the only thing that occasionally slows down their drinking is persistent harping from their mother before they go out, reminding them of the perils of too much alcohol.

As I said, I have sought comment from the various liquor outlets in my electorate and, to a business, they say the same thing. But the most interesting thing I would like to report is that premixed drinks are not consumed by young people alone. I spoke to Premix King in Wodonga. Presumably Premix King specialises in selling premixed drinks, but it has reported that the sale of bottled spirits increased by 30 per cent after the introduction of the tax. Talking about the demographic that shops at Premix King, they said the 18- to 21-year-olds pop in for two hours on a Friday or Saturday night but most of the steady custom comes from people aged 25 and up. Ordinary people—tradies and working mums and dads—who often have limited income choose to drink ready-to-drink mixed spirits.

Retailers have also expressed their irritation by saying that they were not consulted about this increase. They could have given some quite valuable information to the government. But, then again, why would the government consult them—because all it wanted to do was raise extra money through the tax? With a case of Jim Beam bourbon and cola costing $80, people are not going to buy it. They are going to buy bottles of spirits for $28 at the cheaper end and maybe up to $30 or $35. With cruisers at $11.40 for four, people are not going to buy those either. They are going to go straight to the bottled spirits.

As I said, this debate infuriates me as a parent of three teenagers because it is irresponsible with regard to the health of our children. It is irresponsible for governments to bring something in and try and pretend it is a health issue when it really is not—it is really about raising revenue; and we have seen how much revenue it has raised. In the process, it is causing young people to slug from bottles of spirits and end up in the emergency departments of our hospitals. Something is going to have to give. I really hope that, when these bills get to the Senate for the second time, Independent senators will take action to prevent them being passed.

What the retailers are asking me is: what happens to all this extra tax, because it cannot really be paid back? At previous times when this sort of thing has happened the money has been put into a health fund. I would support that. I would support something along the lines of the government’s campaign, which has been very good, and measures which would target young people in schools and educate them—tell them how much is in a nip of alcohol, what it does to your body and how little you actually have to drink to pass out and for your system to close down because it has had too much. Sensible health measures targeted at our young people would be a good use for the tax that has been collected so far. I await the process in the other place and I look forward to these bills being soundly rejected by this parliament.