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Monday, 16 March 2009
Page: 1601


Senator CAROL BROWN (6:03 PM) —I rise today to make my contribution to the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 debate. I am proud to stand here today as a member of a government which understands the effects of binge drinking, as a member of a government that is committed to tackling the serious problem of binge drinking and as a member of a government which is putting in place practical solutions to reduce the levels of risky and at-risk drinking.

It is the legislation we are debating here today which has formed a crucial part of the government’s strategy to try to reduce the levels of harmful drinking amongst all Australians and especially amongst younger Australians, who often turn to these sweet, sugary-tasting drinks—the RTDs, also known as alcopops. It is for this reason that the government on 26 April 2008 undertook the step to increase the rate of excise on these beverages from $39.36 to $66.67 per litre of alcohol content. This new level of tax now applies to all spirit based ready-to-drink beverages which do not exceed 10 per cent alcohol by volume. The amendments contained in these bills will also ensure that new beer and wine based products which mimic the taste of ready-to-drink spirit beverages will not escape this new tax. The Rudd government has acted to ensure that these beer and wine based RTDs which have become more prominent in the 12 months since the last measures were introduced do not become a loophole for alcohol manufacturers to exploit, whereby they would be able to produce products which were very similar in taste to spirit based alcopops but attracted a lower tax because they were beer or wine based.

The measure we introduced in April last year reverses a decision made in 2000 by those opposite. It was back in 2000 that those opposite decided to give alcohol companies a tax break by taxing alcopops at a rate similar to that for full-strength beer. It was this decision that made alcopops far more affordable for young people and, consequently, the drink of choice for a large number of them. As a result of those opposite giving the alcohol companies a tax break, an explosion of alcopop sales occurred; even the alcohol industry itself admits that, since 2000, sales of alcopops have increased by 250 per cent. These alcopops are marketed directly at young people. Alcohol companies use bright colours and sweet flavours to hook young people on them—not to mention the fact that the sugary taste of the alcopops helps mask the distinctive taste of alcohol. Most RTDs have quite a strong alcohol content; with most ranging between five and seven per cent, many young people are able to drink these products quickly and get drunk faster.

This is why the Rudd government moved to correct the bad decision made by those opposite. We are a government which is serious about addressing the binge-drinking epidemic which Australia is currently experiencing amongst young people. For too long we had a government which provided little action on binge drinking, but now, finally, we have a government—the Rudd Labor government—which is determined to find practical solutions to excessive alcohol abuse. Like many of my colleagues, I call on those opposite to stop playing politics and to join with us to pass this measure and rectify past mistakes. During the Senate Standing Committee on Community Affairs inquiry hearings on alcopops, there were wide-ranging discussions on sources of data presented as evidence. As stated in the majority report, the committee preferred sales and consumption data rather than the survey data as the basis for its findings, although survey data was also widely used in the hearing. In evidence, Professor Steven Allsop, appearing in a private capacity, stated:

… it is universally accepted that sales data are strongly and closely aligned to consumption … Even national surveys with very large sample sizes, like the highly regarded National Drug Strategy Household Survey … account for less than 60 to 70 per cent of alcohol known to be consumed from sales data …

So what does the sales data tell us? Let us look at the Australian Taxation Office clearance data. This data tells us the amount of taxable alcohol in beer, spirits and RTDs sold in Australia. As the Senate committee’s majority report states:

Compared to the same period in 2007, the clearance figures for the period May to September 2008 show:

  • a 34.6 per cent decrease in alcopops clearances;
  • a 17 per cent increase in full-strength spirit clearances;
  • a 7.9 per cent decrease in total spirit clearances (RTDs plus full-strength spirits); and
  • a 6.1 per cent increase in beer consumption.

The ATO figures also show that, since the introduction of the measures, the growth in excisable alcohol consumption has slowed. The Department of the Treasury reported that the current projections, based on the ATO figures, show a reduction in consumption of RTDs of 34.6 per cent. We have also have ACNielsen Liquor Services Group data. Across all the beverage types, the figures show a 2.7 per cent decrease in consumption, which is equivalent to 64 million standard drinks. The ACNielsen ScanTrack data comparing May to January 2008 with the same period in the previous year shows:

  • a 29 per cent decrease in total sales of RTDs (equivalent to 310 million standard drinks);
  • a 24 per cent decrease in sales of RTDs with more than 6 per cent alcohol;
  • a 31 per cent decrease in sales of RTDs with less than 6 per cent alcohol; and
  • a 38 per cent decrease in sales of vodka-based RTDs with more than 6 per cent alcohol.

The biggest decrease is in vodka based RTDs, which are designed for and targeted at young people. As Mr Munro from the Australian Drug Foundation pointed out, the 38 per cent decrease in vodka based RTDs is a significant result in the context of the stated intent of the tax increase:

… it is important, given this tax is aimed particularly at young, underage drinkers and young female drinkers, to recognise that vodka alcopops are preferred by young drinkers and particularly by young females.

So this is telling us that the tax has been successful when it comes to reducing the attraction of and demand for alcopops, with a massive decline in alcopops sales, the largest decline being in the sales of the vodka based, high-alcohol drinks favoured by young women. The Senate committee’s majority report points out:

… there was no significant dispute that RTD sales have reduced significantly since the tax increase.

There were a number of positions put forward regarding the substitution effects following the tax measure—that is, consumers of alcopops moving to other cheaper alcoholic beverages. While all submitters and witnesses agreed that some level of substitution has occurred, there was disagreement as to its extent and significance. The Alcohol and Other Drugs Council of Australia in their submission to the inquiry stated:

At present there is minimal data to either prove or disprove significant substitution effects.

However, they expressed the view that, while the ATO data did show that there was a substitution from RTDs to full-strength spirits, total spirits consumption fell by 330,000 litres of pure alcohol. Another issue was the effectiveness of cost-shaping behaviour. A number of public health experts endorsed the effectiveness of the price-levers approach to reducing alcohol consumption.

I am baffled as to how those opposite still cannot put all of the pieces of this simple puzzle together and support this bill. The first piece of the puzzle illustrates clear facts about the levels of young people undertaking risky drinking. The 2007 National Drug Strategy Household Survey found extremely distressing patterns of binge drinking by Australian teenagers, especially teenage girls. The survey found that, in any given week, approximately one in 10 12- to 17-year-olds—which equates to 168,000—reported binge drinking or drinking at risky levels. Almost 20,000 girls aged between 12 and 15 reported that they drink daily or weekly, and more than one in four girls aged between 14 and 19 years—237,000 girls—drink at risky or high-risk levels every month.

These are, indeed, very distressing figures. They clearly highlight the huge binge-drinking problem among young Australians. This is coupled with the evidence of the surge in popularity of alcopops, which can be found in a survey commissioned by the department on the alcohol consumption patterns among Australian 15- to 17-year-olds. This survey identified that, between 2002 and 2004, the percentage of female drinkers aged 15 to 17 reporting they had consumed alcopops at their last drinking occasion jumped from 14 per cent to a staggering 62 per cent. In addition, the Australian secondary school students’ use of alcohol in 2005 report found that, between 1999 and 2005, the proportion of teenage girls aged 12 to 17 who chose RTDs as their preferred drink rose from 23 per cent to 48 per cent. These facts clearly prove that binge drinking is a major problem among the youth in this country. What is even more alarming is the surge in the popularity of alcopops as the drink of choice for young people.

The second piece of the puzzle is the testimony of so many health experts in support of this measure. I might just remind the chamber of some of those. Mr Geoff Munro, the National Policy Director of the Australian Drug Foundation, said:

The industry claims a rise in tax has no impact on consumption of alcopops. But increasing taxes is a proven and effective method of decreasing sales of alcohol to young people. This tax is working on young people. If it prevents young people from taking up drinking early in life, it will have a profound impact on the health of Australians.

Dr Rosanna Capolingua, President of the Australian Medical Association, said at the Senate inquiry into these bills:

Teenagers who have limited disposable income will be particularly sensitive to price. This strongly suggests that a very effective lever to reduce teenagers’ consumption of alcopops is to raise their prices through an excise and/or custom tax increase. The AMA believes that current evidence from Australia and overseas provides every reason to expect that the alcopops tax will act to reduce demand for alcopops. Recent and emerging data in Australia on the consumption of alcopops appears to confirm this particular expectation.

Mr Daryl Smeaton of the Alcohol Education and Rehabilitation Foundation said:

International evidence demonstrates that taxing alcopops at the same rate as bottled spirits will change the consumption patterns amongst young people and lead to less alcohol-related harm. Australian Education and Rehabilitation has economic modelling data which demonstrates that young binge-drinkers prefer to drink Ready to Drink (RTD) spirits because they offer the most alcohol for the cheapest price.

And the final piece of the puzzle, for the benefit of those opposite, is of course empirical evidence which shows a reduction in the sale of alcopops.

Australian Taxation Office figures gathered from the first nine months since the increase in the alcopops tax are significant: they show that alcopops sales have dropped 35 per cent compared to the previous year. In fact, the Hon. Nicola Roxon, the Minister for Health and Ageing, rightly pointed out in the other place that these figures are significant and well beyond the government’s modest predications. She said:

When this measure was first introduced, modelling predicted that it would slow the astronomical growth of alcopops sales, which would have been an achievement in itself. In fact, alcopops sales have slumped—bringing overall spirits sales with them. Despite a smaller increase in full-strength spirits sales, overall spirits sales have fallen by almost eight per cent.

I hope now that I have outlined for those opposite the three key pieces of the puzzle so that they might be able to put them together and come up with the solution and pass this legislation.

We have the first piece: the measure is backed by research. The second is that the measure is backed and supported by a wide range of health experts and professionals. Finally, the measure is backed by evidence which shows a clear reduction in the sales of alcopops. I call on all those opposite to act now and join with the government to get serious about tackling binge drinking. All the evidence supports the government’s measure as an effective policy initiative to reduce alcohol abuse.

If this measure is voted down in this place, the government will be forced to hand back to alcohol companies around $290 million of tax already collected. By not supporting this legislation, those opposite will be responsible for taking a significant amount of funding away from Commonwealth preventative health measures. It is extremely important that those opposite support the measure that we are debating here today, because it forms one part of the Rudd Labor government’s large-scale approach to tackle binge drinking.

In March last year, the Prime Minister launched the National Binge Drinking Strategy. This involved $53.5 million of funding to initiate three new practical measures to help reduce alcohol abuse. At COAG, the Rudd Labor government announced that it would be making the single largest investment by an Australian government in preventative health. The $872 million of funding has been provided to support a range of programs and interventions to reduce the impact of chronic illness in the community.

This government has firmly put alcohol abuse as a high priority in the National Preventative Health Partnership. Currently, the National Preventative Health Taskforce is developing a national preventative health strategy for Australia which will deliver more significant initiatives to tackle alcohol abuse. The Rudd Labor government has a clear-cut plan to bring down risky levels of drinking. The Rudd government has put in place a range of successful policy measures to help reduce alcohol abuse, and we have an opposition who are still unwilling to jump on board and support the government in this fight.

The Senate majority report makes two recommendations. The first was that the government develop strategies to facilitate the collection and coordination of national public health data. The second recommendation was of course that the legislation be passed.

As I have said, a number of health professionals and experts in the field—people who have dedicated their adult lives to public health policy—support this legislation. And who opposes this legislation? The industry; the spirit manufacturers; those who stand to lose financially with the reduction in sales of alcopops—those very people who, as Minister Roxon noted, showed a willingness to target the youth market with new alcopops-style products that avoided the tax increase.

As I commend the legislation to the chamber, I can only hope that those opposite have a change of heart and support these very important preventative health measures. On concluding, I remind the Senate of Professor Moodie’s comments. When asked what message the community would receive if the alcopops tax legislation failed in the Senate, he said, ‘I think it will be quite devastating.’