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Monday, 16 March 2009
Page: 1619


Senator HUMPHRIES (8:16 PM) —I rise in this debate tonight on the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 because I know there will be people in the Australian community who are going to read theHansard from tonight or who have heard parts of this debate and who will hear the logic that is being used by government senators, and they will be attracted by the logic which is used by those senators. But I put to the Senate that that logic is very flawed. It is logic which is not followed through in a way which actually demonstrates cause and effect of the kind that this Senate should be identifying and acting on as the basis for its actions, particularly actions that have the effect of imposing taxation on the Australian community to the tune of well over $1½ billion. The logic used by the Labor senators in this debate is along these lines: we have a major problem with the abuse of alcohol in the Australian community; too many people, particularly young people, are using it at excessive levels; and the costs to the broader community are very severe; the government is acting on this problem by imposing a tax on the areas where apparently young people are heavy consumers of particular alcoholic products; therefore, the Senate should support the government’s attempt to attack this problem of excessive drinking by young people, and the government should therefore rely on the support of all parties in the Senate to pass its legislation.

That superficially sounds very attractive, but it hides a multitude of intellectual sins. Firstly, I am certain that nobody in this place would dispute that alcohol is a terrible scourge in the Australian community and that it would be completely wrong to oppose measures that genuinely reduce the abuse of alcohol in our community, particularly by younger Australians. But senators in this place need to go one step further and satisfy themselves that what is being done by the government is actually making a difference to the harmful levels of alcohol consumption by the Australian community and particularly by young Australians.

I concede the evidence does tend to suggest that there may have been some reduction in the total amount of alcohol sold to the Australian community as a result of this tax. But what is not clear and what was not demonstrated by any witness during the Senate Standing Committee on Community Affairs inquiry is that this reduction in alcohol consumption is actually occurring among younger drinkers—or in fact among drinkers of any age—who are presently abusing alcohol. That is the problem which this legislation encounters, legislation which imposes a colossal burden on certain people in the Australian community who consume these products.


Senator McLucas —Kids.


Senator HUMPHRIES —The minister at the table says ‘kids’, but we do not know that it is kids.


Senator McLucas —We have got a good idea.


Senator HUMPHRIES —We might assume it is kids, but it is also fair to suppose—because we are dealing with supposition here—that many young people are substituting their alcohol in so-called alcopops with alcohol in free spirits, spirits that they mix themselves; and that the reduction in alcopop consumption is attributable to those older or more mature users of alcopops who have decided that cost is a factor in their consumption and they are moving to other, less expensive drinks. That hypothesis is as equally plausible as the hypothesis which the government has glibly asserted during this debate: the consumption of RTDs is going down; therefore our measure must be working in respect of abuse of alcohol by young people. The evidence simply is not there.

The danger in this scenario is that, while the evidence is not there, we know that at some point somebody is going to obtain evidence about the effect of this tax increase on the consumption levels and abuse of alcohol by younger Australians. And if that evidence, which this side of the chamber was expecting to have been obtained by the government during the last 12 months, does indeed suggest that simply substitution has been occurring and there is no significant improvement in the level of alcohol abuse by younger Australians, then the measure is repudiated, the public policy process whereby we make decisions on these matters is comprehensively undermined and future measures which rely on knee-jerk reaction or gut instinct about what needs to be done will be under a cloud—as perhaps they should be. But we cannot afford to make that mistake when so much is at stake in terms of the tax burden on the Australian people and when we potentially do so much damage to an industry which presently employs thousands of people in the sale of a perfectly legal product; namely, ready-to-drink beverages.

I think what has happened here is that many stakeholders in the community, particularly health stakeholders, have been urging more vigorous action on the part of government to deal with the problem of alcohol abuse for some time. Those people have been heartened by the announcement by the government that it would impose a very heavy level of taxation on a particular part of the alcohol market. Those stakeholders have been stampeded into supporting this measure—despite the lack of evidence before it was imposed that it was going to work and despite the lack of evidence that in the 12 months or so since it has been in operation that it has made any difference in this particular area—and have been prepared to support the measure because they have desperately wanted something to be done for a long time. At last something is being done and they are prepared to support it irrespective of the lack of hard evidence that usually such people in debates on public policy prefer to rely on when supporting or opposing particular measures. That is very sad, because if this measure is not having a positive impact on the level of abuse of alcohol by young people, as we on this side of the chamber believe may well be the case, and that evidence ultimately becomes available, then we will put back the wherewithal for a sensible debate about these sorts of reforms very significantly in the future, and that would be a great pity.

What this government has presented as being very unsatisfactory I think is an almost deceitful approach towards the task of demonstrating the worthiness of its legislation. It introduced the tax almost a year ago. It relied on the capacity of governments to delay the introduction of the legislation underpinning this taxation for almost a year. I think it would be reasonable for people observing this process to have assumed that the reason for the delay was not the heavy nature of the government’s legislative program—I do not need to remind senators that there have been a number of occasions where we have had no business to do in this chamber in certain weeks—but, rather, the government was delaying the introduction of the legislation in order to collect the evidence that this measure was going to deal with the problem that it said was going to be addressed—excuse my assault on the microphone.


Senator Fifield —You must be angry.


Senator HUMPHRIES —I must be angry, indeed, Senator. That evidence has not been collected. The interval of one year has not been used to produce the case for this legislation. The government has not even gone away to research this issue, to the best of our observation on the Senate inquiry. If we had been assured that there was some long-term research underway by the Australian Institute of Health and Welfare, or something of that kind, we would have been reassured, but it is not there.


Senator McLucas —It is there!


Senator HUMPHRIES —It is not there, Minister. We asked. I suggest that, if senators who were not part of the inquiry have any doubt about that, they should read through the last three or four pages of the minority report on this inquiry and see all of the witnesses—the National Drug Research Institute, the AMA, the Alcohol and Other Drugs Council, the Alcohol Education and Rehabilitation Foundation, the Australian Drug Foundation et cetera—who were asked the question: ‘Have you seen any evidence of the positive effect of this legislation on use or abuse levels by young people?’ Every one of them said, ‘No, we have not seen that evidence.’ Without that evidence, it makes it very hard for the Senate to act in a responsible way in supporting legislation of this kind.

As I said before, we have been working on the basis of supposition to some extent. Without that hard evidence I just spoke of, we have been asked to assume that a measure attacking alcohol through taxation must necessarily be an effective one. But I think that it is perfectly possible to suppose a quite different scenario—that is, the young people who are presently abusing or have in the past abused alcohol are simply finding other, cheaper ways to access that alcohol. I had an email from a young man in New South Wales after the tax was first imposed. I think it is worth reading part of that email to the Senate:

I am a 21yo male living in NSW. I voted for Labour in the election, indeed I voted for Maxine McKew in place of former Prime Minister John Howard. I have always considered myself a ‘labour man,’ and it never crossed my mind to vote liberal, indeed I thought I never would. However, the action the Labour Government is taking toward the ‘Alcopops’ is one which I find completely unacceptable, and your opposition to which I can’t help but to support. While I myself do enjoy alcohol, I must stress that the tax increase will not affect me much at all—I never drink RTD’s. I drink wine, beer and if I drink spirits, I mix them myself. So you must ask why it is that I am so opposed to the new legislation, despite my habits indicating that I will be virtually untouched by the new taxation. I find myself completely at a loss as to how it is the Labour Government even concieved such an idea, nevermind thought it was a good one. The logic in itself is almost childish in its application, ‘What drinks are the young binge drinkers drinking? Well the money spent in Marketing seems to indicate that they have a preference for the RTD’s so we should make them more expensive.’ Of course the logic is just as childishly put aside as is demonstrated when I asked my younger sister (she is 17) what her friends would do—’Drink straight spirits or goon (cask wine)’ was the reply. So all the Labour Government is achieving by implementing this law is simply to push young children who wish to drink to do so with drinks that are at least twice as strong as the RTD’s they are wishing to ban?? As I said, I am completely at a loss as to how this was ever supposed to work.

This is not some apparatchik who has written an email to support the case the opposition made; this is a person who has contacted me to demonstrate very logically what young people who presently access alcohol would think about a tax on a particular kind of alcohol. Of course they would migrate to some other kind of alcohol, some other kind of beverage that still allows them access to alcohol—but with all the concomitant dangers that the use of bottles of straight spirits and other mixers present to young users when mixing those alcohol products themselves. That is a perfectly plausible explanation of what young people would do. Young people will stop using alcohol because one particular kind of alcohol is more expensive? I do not think so. I think the evidence will suggest at the end of the day that that is not the case.

Some of the advocates for the government’s legislation who came before the inquiry suggested that this was a good move because it was the first step towards a volumetric approach to alcohol taxation. That sounded good superficially but failed at a rather obvious hurdle: if you were to tax Australian alcohol volumetrically and achieve the same tax take that we now achieve from the taxation of alcohol, we would in fact reduce, not increase, the taxation levels on RTDs. On a volumetric approach, RTDs are overtaxed. You would need to reduce the taxation in order to achieve a volumetric approach, so that argument was spectacularly illogical—unless, of course, you have an argument that we should increase the level of taxation across the board. That model, incidentally, raises many billions more in taxation from alcohol than is the case at the present time. If that is the ambition of the government, I would be pleased to hear it, because I would be surprised if they were prepared to admit that to the Australian community. Perhaps it is their ambition.

The other point that was conceded by most of the witnesses is that a strategy which relies simply on one plank, which is to increase alcohol taxation levels on one particular form of alcohol, suffers from an immediate and obvious problem: it is not part of a concerted, across-the-board attack on alcohol abuse. There needs to be a broad approach not just across different forms of taxation but also with different measures dealing with availability of and access to alcohol, which is in the purview not only of the federal government but also of the state governments and sometimes even of local governments. The lack of that strategic approach was very evident in the comments made by witnesses to the inquiry. This government was not in a position to say, ‘We are working with state governments to look at hotel trading hours, promotions on billboards, advertising in local communities and so on’—or, for that matter, at issues of television advertising of alcohol. None of those things were part of this strategy. There were no measures of that kind that were alluded to except that the government was putting aside about $50 million from its $1.6 billion worth of tax take for some preventive activities—a pathetic token gesture given the enormous amount of money the government is raising, even taking into account that its tax take has approximately halved from what it originally estimated it would be when this measure was first announced at this time last year.

This adds up to a very unsatisfactory package It adds up to a half-cooked chicken, and I do not think the Senate should pass something so un-thought-through into law. I think the Senate has been disregarded and abused by having this legislation brought forward so late in the 12 months that the government had to validate its announced taxation measure from March or April last year. If it had been serious, it would have engaged the Senate on this issue much sooner. It has not done so, very clearly, because it did not have the evidence, it knew it could not produce the evidence and it thought that, the larger the amount collected under this measure, the harder it would be for the Senate to knock it back. I am sorry; I do not think that is a good enough political reason to support legislation which is essentially flawed. I say to the Senate that if evidence can be produced that this legislation in the future will actually reduce the harmful intake of alcohol by young people I would unquestionably be over there, voting with the government to support it. But evidence is not there. Until the evidence is there, I think it is quite irresponsible to expect the Senate to take this sort of measure on trust and to support it. I hope there will be the evidence based approach that we all should live by, particularly when such enormous amounts of public money are being talked about.