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Monday, 22 June 2009
Page: 6747


Mr NEVILLE (6:20 PM) —History tells us some very interesting stories about taxation and excise on alcohol. In fact, right back to the 17th century there has always been a great ability to raise taxes on alcohol. The publicans and the innkeepers were easy targets. Over the years, governments of all political colours have exploited that and they have raised taxation doing just that. In fact, in our early history in Australia at the time of the Rum Corps, rum and whisky were a form of currency. That was a regrettable part of our history but it was because alcohol and the taxation of alcohol were exploited. Now we have moved into the 21st century you would think we would have a more mature way of taxing alcohol. In the reforms of 2000-01 the then Treasurer, Peter Costello, introduced a measure to tax RTDs according to their alcoholic content.

What is an RTD? An RTD is a premixed bottle or a premixed can of a mixer, sometimes a soft drink, and a form of alcohol. What Peter Costello said was that if you are drinking a 4.8 per cent VB or you are drinking a 4.8 per cent Bundy and cola you should pay the same tax. If you are drinking a 3.5 per cent—what is called the gold strength or the midstrength—XXXX Gold or a Carlton midstrength, you pay the same tax as if you were having a light Bundy, Bundy gold as it is called. And it applied to other full-strength and midstrength alcohol drinks as well. The great beauty of those drinks is that when people drink them they know exactly the quantity of alcohol that they are drinking.

The government, I must admit, were very clever when introducing the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009. They changed the nomenclature and used the emotive word ‘alcopop’. Even the last speaker, for whom I might say I have a fair amount of respect, was conned by that. ‘These dreadful alcopops.’ ‘These excessively sweet, fruit injected drinks.’ ‘These fizzy and coloured drinks that are dressed up to grab young people, particularly young girls, are alcopops.’

What the minister and the Labor Party did not say at the time was that they represent a very small proportion of the total amount of RTDs. Minister, I do not know if you know this but the regular drinks of dark rum, whiskey and bourbon—all well-known products; all accepted on the shelves of liquor stores, supermarkets and pubs—represent in mixed form 76 per cent of so-called alcopops. These are regular drinks, such as Bundy and cola and Johnnie Walker and dry—whatever it might be. The next level is the white spirits of gin and vodka. They represent nine per cent. If you take the dark spirits and the white spirits, 85 per cent of the RTDs are quite regular, decent products. So-called alcopops that get their alcohol from wine or brewing or even sometimes vodka represent 15 per cent of the market.

Now let us have a look at the total liquor market. Of the whole liquor market, 8.5 per cent is RTDs. Let us apply this little measure: if you take 15 per cent of 8.5 per cent, this debate in this parliament on this so-called health measure—this so-called protection of young girls, this so-called anti binge drinking measure—is on 1.3 per cent of the alcohol consumed in this country.

What did the government do? With a tax, you expect there to be equity. The government has levied this tax—roughly $450 million a year; $1.7 billion or $1.8 billion over the four-year term—on 8.5 per cent of the market. When you think about it, that is inequity on a grand scale. First we had the nomenclature to get us to believe that all of those drinks were alcopops. When we got to that point, if you look at the total amount of alcohol you find that the whole tax is being levied on 8.5 per cent of the liquor market. The liquor market is quite big. Thirty-three per cent of it is wine, 45.5 per cent of it is the three strengths of beer and roughly 12.5 per cent of it is spirits. RTDs make up 8.5 per cent and they take the full tax burden. And it is done in the name of young people at risk.

Has it had an effect in reducing drinking? Not markedly. If you put taxes on anything—such as cigarettes or alcohol—and you put them on heavily enough, you can certainly lower in that particular category the amount of it being used. RTD use has dropped by 35 per cent since the introduction of this measure. But the use of bottled spirits has risen 19 per cent and the use of beer has risen five per cent. Bear in mind that when you talk about five per cent of beer you are talking about five per cent of 45.5 per cent of the total market. It is quite considerable. There has been a shift not so much away from alcohol but to other forms of alcohol.

The other reasons that the government gave were to do with health and public safety—great considerations. We were told about these young people who they were trying to protect, particularly young women. If you have a look at the figures for young females from 14 to 19 years, 6.7 per cent of that group are categorised as ‘at risk’, with 3.7 per cent drinking at ‘heavy risk’. If you take the two together, to make it easy, that is just less than 11 per cent. But what percentage of the total female population does this group represent? Fourteen- to 19-year olds represent only 10 per cent of all women over 14. So, if you take 11 per cent of 10 per cent you find that the number that are at risk is 1.1 per cent.

So let us review those two figures. First, what proportion of the whole liquor market do the real alcopops—the heavily fruited and heavily sweetened fizzy coloured drinks—represent? They represent 1.3 per cent. What portion of the population do the young people purportedly ‘at risk’ represent? Of all females capable of drinking they represent 1.1 per cent. There is no equity there either.

Minister, if you go around the bottle shops and talk to the people there they will tell you about one of the shifts that have occurred. Someone who is aged over 18 in a group will go to a bottle shop and buy a bottle of soft drink. They will tip half of it out and fill it up with vodka. There they have a potent brew in the bottle of soft drink, with the equivalent of 12 nips of alcohol. We are talking about binge drinking. Can you imagine young people sucking on that cocktail for the night and what condition they are in at the end of the night?

When you go in and buy an RTD or a premix you know from the bottle how many drinks are in that bottle. As I said before, if you take a can of Bundy gold you can drink two of those and be quite safe to drive. You ask yourself, after that: is this really a health measure that we have engaged in? No, it is not. All we have done is shift the emphasis to another area. Those young girls that the bill purports to protect are still as vulnerable. And some might argue they are even more vulnerable. Why do I say that? I will quote from David Kalisch, who was a deputy secretary of the Department of Health and Ageing, the minister’s own department. He said:

The other aspect that I would also draw to your attention is that anecdotal evidence we have received from ED—

That is, emergency departments—

… suggests that there has been no change to ED presentations since the change in the excise.

He later went on:

… it is difficult to draw a conclusion about whether there has been a reduction or no change in harmful drinking.

That was a deputy secretary of the minister’s own department. That is what he had to say about it. There is another thing that has been purported under the smokescreen of the change of nomenclature. That is that these dreadful supersweet drinks are being drunk by all these young kids. Well, they are not. The liquor industry’s analysis of this is that most of the people drinking RTDs are males above 24 years of age. Why would they do that? I suspect that they are young guys who want to go out and have a good night but want to keep control of how much alcohol they are drinking. Of course, if they are just having a drink before they go home on a Friday night then they really want to drink something after which they can feel fairly safe about driving. I explained that earlier.

The minister has devoted $50 million, in round figures—and she announced another $7 million tonight—to various binge-drinking and alcohol abuse matters. When you are picking up $450 million a year, that is really a bit on the low side. If we were really fair dinkum about looking at binge drinking we would be doing a lot better than $50 million or $57 million or whatever it might be. It will be in that range.

Yet another thing has bemused me in this debate. I would like to quote Martin Ferguson, the Minister for Resources and Energy and Minister for Tourism. In July 2004, when this matter came up in the parliament he said:

RTDs currently attract an excise at the same rate as full-strength beer, which appropriately reflects alcohol content, and taxing RTDs at a higher rate would be unfair …

That is Labor policy I presume. It was recognised that emergency departments have said that they have seen no increase. Labor people, over the years, have agreed with the fact that RTDs should not be selectively taxed.

I come from Bundaberg. It would be of no surprise to anyone here that I would want to defend the local industry. But I defend it first because of the faulty nomenclature that the Australian public was conned into and then because of the lack of equity, the excessiveness of the tax and the way it was levied, and the fact that the health aspects of it have not been proven. In my own town we have had Bundaberg Rum since 1888. Bundaberg Rum has been part of the Australian romance in many fields, including the outback. People have often wondered about the little square bottle of Bundaberg Rum you buy, for example. They ask, ‘Why did they make a bottle like that?’ The reason for that was that it could go into the drover’s saddle pack when he was going out, because there were no refrigerators out on the edge of the desert. All the drovers had was the rum so they would drink the rum with the water.


Mr Adams —Bore water.


Mr NEVILLE —Yes, probably bore water, as the honourable member for Lyons says. He is quite right.

Bundaberg Rum was used by the Australian and British navies during the Second World War. It has been a major sponsor of Australian sport. It is part of the industry profile of my city and my electorate. It is a well-made product. It is now being exported extensively overseas. Do you think, honourable members and minister, that the Champagne region of France would sit idly by if some minister in the French government started attacking champagne? Do you seriously think that Scottish members of parliament would sit idly by while Scotch whisky was being attacked in the UK or Scottish parliaments? Of course not. Nor will I put at risk the jobs that are involved in that. Rum is made from molasses, which is a tertiary product of the Australian sugar industry. It is quite central to the economic profile of my district and one of the two cities in my electorate of Hinkler. I make no apologies for doing that.

Let me make one thing clear to the minister and all here: no-one has put me under pressure. I have done this under my own volition. I have largely prepared my own material that I put to my party room, although I did seek some help on research. This is really a bodgie matter. It is applying a big tax, a $1.7 billion or $1.8 billion tax, to 8½ per cent of the market. It is dressed up in the nomenclature of alcopops, emotively. They use it as nothing more than a smokescreen to mask that tax. It has not met its health objectives, it is mean in its anti-drinking campaign and quite frankly it is damaging to the people of my electorate. I will oppose the bill in whichever way possible.