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Monday, 22 June 2009
Page: 6727


Ms ROXON (Minister for Health and Ageing) (5:02 PM) —I move:

That this bill be now read a second time.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2] and cognate Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2] were originally passed by the House of Representatives on 25 February 2009. The same bills were negatived by the Senate on 18 March 2009.

I am reintroducing the original bills negatived by the Senate into the House today.

The re-introduction of these bills will test the opposition to see whether it will support a measure which helps reduce the harmful effects of alcohol on young people and especially young women or whether it will side with the distilling industry.

Of course we have seen under cover of other matters occurring in the House that the decision for the opposition, whether it will protect the health of young people or protect distillers’ profits, is something that they are not proud of, and indeed they should not be proud of their position on this bill. The ball was well and truly in their court with the introductions to be scheduled today and we had the member for Dickson scurrying out to do a press conference. When his leader was on his feet supposedly prosecuting a matter of great importance, the member for Dickson was scurrying out to announce that now, after months and months of opposition, he is intending to support this bill. I hope that when he comes into the House to debate this bill, we will see that.

On 15 April 2009 I announced with the Treasurer that the government intended to reintroduce the alcopops tax measure into the parliament. The government also introduced legislation to validate the ‘alcopops’ revenue collected from 27 April 2008 until 13 May 2009.

The validation bills ensured all alcopops revenue as a result of Excise Tariff Proposal (No. 1) 2008 and Customs Tariff Proposal (No. 1) 2008, from 27 April 2008 to 13 May 2009 has been retained by the government. The validation bills protected an estimated $424 million in revenue collected between 27 April 2008 and 13 May 2009.

I also tabled the tariff proposals in the House on 12 May 2009 so that with effect from 14 May 2009 the alcopops measure remains in place into the future, and of course those are the measures that we will be voting on later tonight.

The opposition supported the validation bills I have just mentioned and if, as it now seems they will, they support the measure for the past they must have known that they would inevitably be supporting this measure, which retains protection into the future. It has been very difficult for them to come to their position. They obviously felt compelled to stay close to the distilling industry, but finally sense seems to have prevailed and we understand that the Liberal Party will now be supporting this measure. I see that the shadow minister is coming into the House and certainly no doubt he will take the opportunity to share with us why the opposition has finally come to its senses on this bill.

The government’s position, unlike the opposition’s, has been clear and consistent from day one and has remained consistent, because this measure is working.

Consumption of alcopops has declined since its introduction. Tax office data show that alcopops clearances have fallen by 35 per cent in the 11 months after this measure was introduced compared to the same period a year earlier. Total spirits clearances decreased by around eight per cent over the same period, and this is important to note because even after some substitution—one of the key arguments from those opposite—overall clearances have dropped by eight per cent.

The budget papers released a couple of months ago provided even more evidence that this proposal is working. Average weekly beer and spirit clearances, including alcopops and full-strength spirits, have dropped 0.5 per cent or 9,000 litres of alcohol in a period of time from May to March 2008-09 compared to the same period in 2007-08. This equates to about 720,000 fewer standard drinks being consumed per week on average on this measure. That is a lot of alcohol less that is being consumed and it shows that this measure is working.

So the evidence is there. The government stands by this measure and has had a consistent position throughout. The question, of course, has been: what would the opposition do?

We all know, in this House, that alcopops are brazenly being targeted directly at young people and underage drinkers. By using bright colours and sweet flavours, alcopops can effectively fool young people about how much they are drinking by disguising the taste of alcohol. Effectively, alcopops are alcohol-laced lolly water targeted to young people, and young women in particular, who might not otherwise drink as much, or at all, if the taste of alcohol was much more obvious, as it would be unpleasant to their young palates. These products are basically designed to undermine any notion of responsible drinking.

This measure has been backed by health experts all over Australia. There are many, many examples, but I will refer to just one here, for the sake of brevity. David Templeman, the CEO of the Alcohol and other Drugs Council of Australia (ADCA) has stated:

… this initiative clearly recognised the problems created by the excessive consumption of RTDs which were attractive to the youth market.

I think it is useful to correct a few misconceptions that have been peddled on this alcopops measure at this point, although I presume, given that the opposition is now supporting this bill, that they know that these were misconceptions and ones that they happily continued to spread.

First, the measure closes a loophole whereby alcopops are taxed at a lower rate than other spirits. Alcopops will now be taxed at the same rate as other spirits: no more, no less. This is what we mean when we say we are closing a loophole.

Second, the alcopops measure was never meant or described, at any time, to be a stand-alone initiative, as some have disingenuously suggested. We know binge drinking is a long-term issue which requires sustained long-term action. Experts agree that, to effectively tackle binge drinking, we need to have a multipronged and prolonged strategy. There is no serious argument against this proposition.

So, when you hear people say that this measure of itself has not ‘fixed’, within a few short months, a binge-drinking culture built up over many decades, we know that they are simply being glib. Cultural changes takes a long time to occur and I look forward to seeing the findings of the Preventative Health Taskforce, which has preventing alcohol related harm as one of its top three priorities.

The Rudd government is acting in a comprehensive way. I have mentioned the very important work of the National Preventative Health Taskforce and the report which we will receive from them shortly. But the government has not just been waiting on its hands for that report. As long ago as March last year, the Prime Minister and I announced a National Binge Drinking Strategy which involved investing $53.5 million to address binge drinking among young people. Elements of the package included:

  • investing $14.4 million in community level initiatives to confront the culture of binge drinking, particularly in sporting organisations. Six major sporting codes have now signed up to a code of conduct;
  • funding of $20 million for advertising that confronts young people with the costs and consequences of binge drinking via the gritty and hard-hitting ‘Don’t turn a night out into a nightmare’ campaign; and
  • committing $19.1 million to intervene earlier to assist young people and ensure that they assume personal responsibility for their binge drinking.

As a part of that last item that I mentioned, the $19.1 million, today I have approved and announced an investment of $7 million dollars for the first early intervention pilot programs. These have been negotiated with state and territory police and health experts with the aim of ensuring that young people developing an alcohol problem get access to coordinated support from health and police as early as possible to prevent a downward spiral. These are:

  • in the Northern Territory, $2.5 million to enhance existing systems and programs within Northern Territory Health and Police—working with young people at risk, and those already in the justice system;
  • in Tasmania, $700,000 will be allocated to the Tasmanian Police Southern District Command area, where alcohol education sessions will be conducted with established outreach services. The Tasmanian Alcohol and Other Drug Service will develop youth specific programs to facilitate the ongoing treatment for young people in need;
  • in Victoria, VicPol will conduct the $1.4 million project in the Wyndham local government area, where police, the Victorian Department of Human Services and Directline will work together to assist young people and their families to access drug and alcohol services; and
  • in South Australia, $2.4 million will assist police and the South Australian Drug and Alcohol Service to better work together in three sites to develop an evidence base by evaluating different alternative styles of intervention and inform best practice around final alcohol diversion models for underage drinkers. Individual treatment plans will be negotiated between the young person and the treatment agency.

I am sure, Mr Deputy Speaker, you will be interested in that South Australian investment, where we know that, of course, like many communities, attention is needed on these issues.

I am pleased that initiatives like this have been developed with police and health agencies, working together to help young people in trouble. By tackling the issue on these many fronts, we aim to make inroads into behaviour, particularly amongst young Australians. This strategy remains in place and has been made stronger by additional government intervention.

Thirdly, I want to address, just briefly, the issue of substitution. The argument has been run, particularly by the opposition,  that if the price of alcopops is increased—incidentally by taxing them at the same rate as full-strength spirits—that young people will substitute their drinking to full spirits and mix their own drinks. While there has been some substitution to full-strength spirits—partly driven, I might say, by the marketing strategies of alcopop sellers—overall, as I have noted, there has been a fall in total spirits excise and equivalent customs duty clearances of around eight per cent.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the cognate Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 reverse the previous government’s decision to tax alcopops at a rate similar to full-strength beer. The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 restores the treatment of alcopops to a rate equivalent to full-strength spirits.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 increases the rate of excise duty in the Excise Tariff Act 1921 on beverages commonly referred to as ‘alcopops’ from $39.36 per litre of alcohol content to $66.67 per litre of alcohol content, with effect on and from 27 April 2008. This rate is subject to biannual indexation and is increased in February and August each year. As at 2 February 2009, the rate applicable to alcopops is $69.16.

Unfortunately, there have attempts by some manufacturers and importers to find ways to circumvent the increased tax rate on alcopops.

The government decided to alter the taxation definitions of beer and grape-wine product wine to ensure beer and wine based products that attempt to mimic spirit based products in relation to their taste are taxed as a spirit product. That is, at the higher tax rate.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 alters the taxation definition of beer in the Excise Tariff Act 1921 to ensure beer based products that attempt to mimic spirit based products in relation to their taste are taxed at the higher rate that applies to alcopops.

Complementary changes will be made to the Customs Tariff Act 1995 so that imported beer is subject to the same definition of beer for taxation purposes. Changes will also be made to the Customs Tariff Act 1995 to alter the definition of wine. Changes to the A New Tax System (Wine Equalisation Tax) Regulations 2000 will follow to ensure domestically produced and imported grape wine products are taxed on a comparable basis.

The amendments are not designed to have any significant impact on conventional beer and wine products. Both industries are supportive of the changes and in particular beer industry representatives have confirmed that they are strongly supportive because they see the changes as allowing them to be more innovative.

Again, I emphasise this measure acts to address the government’s concern at the growth in alcopops consumption, alongside their appeal to young and underage drinkers—and the role they play in encouraging binge drinking.

Full details of the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 is contained in the explanatory memorandum.

Debate (on motion by Mr Lindsay) adjourned.

Leave granted for the resumption of the debate to be made an order of the day for a later hour this day.