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Tuesday, 23 June 2009
Page: 4052


Senator WONG (Minister for Climate Change and Water) (5:24 PM) —I move:

That these bills be now read a second time.

I seek leave to have the second reading speeches incorporated in Hansard.

Leave granted.

The speeches read as follows—

Excise Tariff Amendment (2009 Measures No. 1) Bill 2009

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and cognate Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 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.

The decision for the Opposition is whether to protect the health of young people, or to protect distillers’ profits. The ball is well and truly in their court.

On 15 April 2009 I announced with the Treasurer that the Government would 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 have 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 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.

The Opposition supported the validation bills I have just mentioned. If they support the measure in the past they must now support it into the future. Their position must be settled.

But consistency has not been a hallmark of the Opposition on this measure as they are too close to the distilling industry.

The Government’s position on this has been clear and consistent from day one and remains consistent because the measure is working.

Consumption of alcopops has declined since its introduction. Tax Office data show that alcopop 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 8 per cent over the same period—and this is important to note—that is, even after some substitution over all clearances have dropped by 8 per cent.

And the Budget Papers released a couple of months ago have more evidence of the proposal working. Average weekly beer and spirit clearances (including alcopops and full strength spirits) have dropped 0.5%, or 9,000 litres of alcohol in the period 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.

So the evidence is there, and the Government stands by this measure, and has had a consistent position. The question is where the Opposition stands.

Alcopops are brazenly targeted directly at young people and underage drinkers. By using bright colours and sweet flavours, alcopops can very effectively fool young people about how much they’re 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 more obvious as it would be unpleasant to their young palates.

They are basically designed to undermine any notion of responsible drinking.

This measure is backed by health experts all over Australia. There are many many examples, but I’ll just refer to just one here for the sake of brevity.

David Templeman, CEO of the Alcohol and other Drugs Council of Australia (ADCA) has stated, ‘that 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.

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, not more, not less. This is what we mean by closing the loophole.

Second, the alcopops measure was never at any time a stand-alone initiative as some have disingenuously suggested.

Binge drinking is a long-term issue and which requires sustained long term action.

Experts agree that to effectively tackle binge drinking, we need to have a multi-pronged, and prolonged strategy. There is no serious argument against this proposition.

So when you hear people say this that measure of itself has not “fixed” within a few short months a binge drinking culture built up over many decades, we know they are simply being glib. Cultural change 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 three priorities.

The Rudd Government is acting in a comprehensive way. I have mentioned the very important work of the National preventative Health Taskforce.

But the Government has not just been waiting on its hands for its report. As long ago as March 2008 the Prime Minister and I announced the National Binge Drinking Strategy. This involved investing $53.5 million to address binge drinking among young people. Elements of the package include:

  • 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 this $19.1 million today I have approved an investment of seven million dollars between now and 2012 for the first four 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 co-ordinated support from health and police as early on as possible to prevent a downward spiral. These are:

  • Northern Territory $2.5 million to enhance existing systems and programs within the NT Health and Police - working with young people at risk, and those already in the justice system;
  • Tasmania $0.7 million will be allocated in 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 developed through the EIPP;
  • Victoria: VicPol will conduct the $1.4 million EIPP in the Wyndham local government area, where police, the Victorian DHS and Directline will work together to assist young people and their families to access drug and alcohol services; and
  • South Australia: $2.4 million to assist Police and the SA 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 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 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’d like to address the issue of substitution. The argument runs 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 and mix their own drinks.

While there has been some substitution to full strength spirits—partly driven by the marketing strategies of alcopop sellers—overall there has been a fall in total spirits excise and equivalent customs duty clearances of around eight per cent as a mentioned earlier.

The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and cognate Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 reverse the previous Government’s decision to tax alcopops at a rate similar to the full strength beer rate. The Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 restores the treatment of taxing alcopops at 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 emphasize this measure acts to address the Government’s concern at the growth in alcopop 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.


Customs Tariff Amendment (2009 Measures No. 1) Bill 2009

The Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 which was rejected by the Senate on 18 March 2009 is being re-introduced today in the House.

This Bill contains amendments to the Customs Tariff Act 1995 that implement changes that are complementary to amendments contained in the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009.

The amendments apply to imported alcoholic beverages not exceeding 10 per cent by volume of alcohol that are classified under several subheadings in Schedule 3 to the Customs Tariff, as well as items in Schedules 5 and 6. 

These amendments increase the excise equivalent component of the customs duty applying to those subheadings and items from $39.36 to $66.67 per litre of alcohol content on and from 27 April 2008.

The ad valorem component of customs duty for these goods, where applicable, has not been changed.

Changes will also be made to the Customs Tariff Act 1995 so that imported beer is subject to the same definition of beer for taxation purposes as set out in the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009. Additionally, the Act will be changed to introduce a new taxation definition of grape wine product.  Changes to the definition of grape wine product will also follow in the A New Tax System (Wine Equalisation Tax) Regulations 2000.

Full details of the measure are contained in the Explanatory Memorandum.

Debate (on motion by Senator Wong) adjourned.