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Thursday, 14 November 2002
Page: 6418

Senator IAN CAMPBELL (Parliamentary Secretary to the Treasurer) (4:39 PM) —I thank Senator Conroy and Senator Murray for their contributions and constructive comments on the Excise Tariff Amendment Bill (No. 1) 2002 and the Customs Tariff Amendment Bill (No. 2) 2002. There is very little on which I disagree with Senator Murray in relation to the principles which he is espousing. I think if you look at the actions the government has taken over six years, particularly with the introduction of the new tax system reforms, you will see that the government has moved significantly towards the sorts of principles that Senator Murray has espoused.

We argue, however, that these bills certainly do not set out to become a platform for alcohol taxation reform. Certainly, a significant amount of reform was put in place under ANTS. I think it is fair to say that that created significant costs and implementation expenses for a very important industry, particularly the wine industry but a range of other sectors of the industry. I think it is fair to say that most sectors of the industry benefited from some reforms there. I know as a Western Australian—and Senator Murray is also a Western Australian—that there is a significant sector of the industry in our home state of Western Australia that would have preferred us to take that opportunity to go further and introduce volumetric taxation. But I think those of us who have been in this debate for a long time know that there are equally strong views put by grape growers and wine producers in other geographical zones of Australia—or `appellations', as they call them on the Continent.

There has been a vigorous debate in this industry about this form of taxation. I think it is an important debate. It is a debate that will continue. It is a debate that the government will closely monitor but it is not something that we would seek to enter into in a piecemeal fashion. I think it is fair to say—and I think Senator Murray would admit—that he has approached reform in a piecemeal fashion. The government has made significant reform. Senator Murray has commended that. These bills seek to do a number of things and in relation to the taxation of beer they seek to bring in a replacement to the existing state and territory schemes with a uniform, national, administratively efficient concession scheme for low-alcohol beers.

The changes in these bills do not represent a change in policy in relation to the taxation of alcohol; they simply represent a transfer of responsibility from the states to the Commonwealth. These are not bills that seek to change alcohol taxation. They validate a range of tariff proposals, one of which happens to concern beer. In the government's consideration of alcohol taxation arrangements which took place with the introduction of the new tax system—and that was only four years ago—manufacturers of pre-mixed drinks, for example, did benefit in particular from the outcome of that review. Excise rates were reduced on those, comparable to the rates on spirits, to something closer to the rates for full-strength beer and there were drops of up to 37 per cent in the rate applicable to pre-mixed drinks.

In relation to wine, the reforms in the new tax system, when you combine them with the rebates offered by the states, allow wineries to effectively sell their wine free of the wine equalisation tax at the cellar door or via mail order up to a retail value of around $600,000 per annum. Small producers who are not registered for the GST—that is, with a turnover of up to $50,000—do not pay wine tax at all. The government's commitment to the health aspects of alcohol consumption is, I think, on the record. We have put into place a series of actions over the years, particularly through the new tax system, and the government are also interested in seeing the outcome of the inquiry requested by the Parliamentary Secretary to the Minister for Health and Ageing into the marketing and promotion of ready to drink or pre-mixed alcoholic products to minors. I understand that the parliamentary secretary has asked the National Expert Advisory Committee on Alcohol to undertake this inquiry and it might shed some light on the sorts of influences on drinking behaviour that we have to think about. The government will not be supporting Senator Murray's and Senator Murphy's amendments. The government will not be supporting the second reading amendment that Senator Murray has moved in relation to a proposed review by either the Senate Economics Committee or an independent body.

We believe that the reforms that took place under the new tax system have only just been bedded down by a large and important industry and that it is important to have some certainty. That does not, however, rule out change or reform in the future. There is, as I said earlier in this contribution, merit in many of Senator Murray's arguments. From my position, I am certainly not going to rule out any future reform in this area. I welcome the debate; I think it is a very important debate. I have spoken particularly about the wine producers in Western Australia who I have dealt with—I know there are other supporters around the country; I just happen to be in closer proximity to those in WA. I enjoy being in proximity to them, especially when I do my regular tours around the wonderful vineyards of my old stomping ground in the Swan Valley and the Margaret River region. I think that most of those wine producers took the same position that Senator Murray did in relation to the WET tax. They saw the benefits of the ANTS reforms, the new tax system reforms. They would have liked more reform but they saw that it was incrementally moving to a better system. Of course, those who support volumetrics say you could have an even better system.

I do not think that even Senator Murray would underestimate the challenges involved in moving further down the path of alcohol taxation reform. There are significant public policy issues, broadly, and also significant political issues that you cannot ignore—you have to deal with those. I know Senator Murray is genuinely trying to be helpful in that regard and I welcome that assistance in the debate. The government will monitor and engage itself in consideration of further reform in a timely and diligent fashion, as always.

Question negatived.

Original question agreed to.

Bills read a second time.