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Thursday, 14 November 2002
Page: 6420

Senator CONROY (4:51 PM) —I respond to Senator Murray's comment. Labor support the new national low-alcohol tax regime for beer, as it improves and simplifies the administrative arrangements while essentially maintaining its competitive status quo in the alcohol market. There is also an argument for lower tax to apply to all low-alcohol products to act as an incentive for their consumption over full-strength products, as is the case with beer. However, alcohol taxation is a complex issue. I know that Senator Murray has long-held and genuine views on this issue. Any changes would require wide consultation. At this stage, it is probably a little too early in the process for us to be able to commit ourselves to supporting Senator Murray's amendments. Senator Murray and Senator Murphy, you can probably tell from the lack of excitement in my voice that we will not be supporting your amendments.

We do have a couple of concerns about your amendments. If I could just outline them to you, it may be useful for you to be conscious of them as part of an ongoing discussion. First, we consider it to be inappropriate to remove low-alcohol wine from the WET regime and place it in the excise regime. Obviously, this is because wine is taxed by value and not by volume, as is the case with excise on beer and spirits. So we agree that there is an issue we have to try to work our way through. Second, there is no significant benefit to be gained from raising the excise on locally produced brandy to the level of other imported spirits, apart from an increase in government revenue. Third, the proposed tiered arrangements similar to beer for registered drink products have not been officially costed. Revenue implications of these arrangements may be significant.

Any change to the structure of alcohol taxation may also lead to significant commercial consequences, and certainly ad hoc proposals designed to improve the competitive position of one type of alcoholic beverage over others are not supported. Labor are happy to work with relevant interest groups, the Democrats and Senator Murphy to develop an appropriate policy for genuine low-alcohol products but, for the reasons I have mentioned above, we will not be supporting the Democrat amendments. There are many similarities with Senator Murphy's amendments, and at this stage we would not be supporting Senator Murphy's either.

I invite those who are interested in this issue to join us while we work our way through a consultation on the basis of a review paper on the wine industry which we produced before the last election. If we could find common ground on the issues that I know Senator Murray and Senator Murphy are concerned about, we would welcome the opportunity to develop that with other senators and interested parties over the course of the next few months. We hope that you will take up that opportunity to work with us on some of these issues.