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Thursday, 13 August 2009
Page: 4877

Senator LUDWIG (Special Minister of State and Cabinet Secretary) (1:31 PM) —I thank all the senators who have made contributions to this debate on the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2] and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 [No. 2]. In particular, I would like to take the opportunity to thank Senator Xenophon and the Greens senators for their constructive contributions to this important debate and their proactive negotiations. I would also like to thank Senator Fielding. I think it goes without saying that he has had a longstanding commitment to anti-binge drinking measures.

The Excise Tariff Amendment (2009 Measures No. 1) Bill and the Customs Tariff Amendment (2009 Measures No. 1) Bill increase the rate of excise and excise equivalent customs duties in the Excise Tariff Act 1921 and the Customs Tariff Act 1995 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 1 August 2009, the rate applicable to alcopops is $69.57.

While the opposition no longer opposes the legislation, it has continued to question the impact of this measure. Yet this measure has been widely backed by health experts, by police and by the community. The measure has reduced the consumption of alcopops and spirits. Alcopops clearances fell by around 35 per cent over the period of May 2008 to April 2009 compared with the previous year. Overall, even after some substitution, spirit clearances have dropped by eight per cent over the same period. There is still a decline, even taking into account beer consumption. This year’s budget papers show average weekly beer and spirit clearances dropped by 0.5 per cent. If you put it in terms of litres, it is about 9,000 litres of alcohol in the period between May 2008 to March 2009 compared with the same period between 2007 and 2008. On this measure this equates to about 720,000 fewer standard drinks being consumed per week on average.

I think it is useful to correct a few misconceptions that have been raised about this alcopops measure. First, the measure closes a loophole opened up by the former coalition government where 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 standalone initiative, as some opposition members have—and I suggest disingenuously—suggested. Binge drinking is a long-term issue which requires sustained long-term action. Experts agree that to effectively tackle binge drinking we need to have a multipronged and prolonged strategy. There is no serious argument against this proposition. So, when you hear people say that this measure of itself has not fixed a binge drinking culture built up over many decades within a few short months, we know they are simply being, quite frankly, 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. I am sure the Minister for Health and Ageing, Ms Roxon, would also be pleased to see those results as well. On top of this, as long ago as March 2008, the Prime Minister and the Minister for Health and Ageing announced the National Binge Drinking Strategy. This involved investing $53.5 million to address binge drinking among young people. By tackling the issue on many fronts we aim to make inroads into behaviour, particularly amongst young people.

Thirdly, I would like to address the issue of substitution. This argument runs that, if the price of alcopops has increased incidentally by taxing them at the same rate as full strength spirits, young people will substitute their drinking to full strength spirits and mix their own drinks. Whilst there has been some substitution to full strength spirits, partly driven by the marketing strategies of alcopops sellers, overall there was a fall in total spirit excise and equivalent customs duty clearance of around eight per cent, as I mentioned earlier.

Earlier I thanked the Greens senators and Senator Xenophon, and I can confirm that the written commitment by the Minister for Health and Ageing to a $50 million package of important anti-binge drinking measures will be honoured if these bills are passed unamended. The bills also alter the taxation definition of beer and grape wine in the Excise Tariff Act 1921 and the Customs Tariff Act 1995 to ensure beer and grape wine products that attempt to mimic spirit based products in their taste are taxed as a spirit product. Changes to the A New Tax System (Wine Equalisation Tax) Regulations 2000 will follow, if these bills are passed by parliament, to ensure domestically produced grape wine products are taxed on a comparable basis to imported grape wine products. I thank all those who have contributed to the debate, as I indicated earlier. It has been a long debate over quite some time as opposed to taking up the time of the Senate. I urge the Senate to pass the amending bills, which are essentially a part of the government’s measure to address binge drinking.

Question agreed to.