Paul Neville (Hinkler, National Party) Share this | Link to this | Hansard source

I would like to take the opportunity to touch on an issue related to the taxation arrangements for premixed drinks, or RTDs. This ties in with the recently debated Excise Laws Amendment (Fuel Tax Reform and Other Measures) Bill 2006 and I would like to add my thoughts to this matter. My colleague the member for Page covered the issue in depth in a contribution during the previous debate and I would like to expand on his thoughts.

I believe that the Commonwealth should consider giving RTDs access to the 1.5 per cent excise-free threshold which applies to all beer products as well as the reduced excise rates that apply to packaged and draught low- and mid-strength beers. Not only would this correct an anomaly in the existing taxation arrangements; it would also further encourage the consumption of lower alcohol content beverages and could well improve drinking behaviours within the community. RTD manufacturers would also have some further encouragement to produce lower alcohol products due to the associated reduction in tax costs. As the member for Page outlined in his contribution, this could bring substantial benefits to both the national and local economies.

I note that the Senate Economics Legislation Committee has just recommended to the government that it consider the long-term adoption of a volumetric tax system for all alcohol products and that the government apply the same tax and excise treatment to low- and mid-strength ready-to-drink, RTD, alcohol products as is applied to similar strength beer products. While I applaud the committee’s recommendations, there are a number of pertinent matters I would like to raise in support of these proposals. The National Alcohol Strategy 2006-2009, which was recently endorsed by the Ministerial Council on Drug Strategy, also highlighted the need to focus on price related mechanisms to reduce the consumption of alcohol at harmful levels. Tax equivalence between low- and mid-strength RTDs and packaged beer would undoubtedly help achieve this goal.

Other national health bodies such as the National Drug Research Institute and the Australian Medical Association have also endorsed the need for incentives to produce lower alcohol products. Indeed, a report by the Royal Australasian College of Physicians and the Royal Australian and New Zealand College of Psychiatrists on strategies to reduce the misuse of alcohol stated that Australia’s taxation of alcohol since the introduction of the GST has ‘failed to tax the alcohol content of drinks in order to maintain incentives for drinkers to choose low-alcohol varieties and to create disincentives for heavy drinkers to choose cheap bulk drinks’.

We know what the medical experts think, we know what commomsense says and we know what the Australian distillers want, so what does it all mean to the bottom line? What is the revenue impact of extending the taxation arrangements for low- and mid-strength beer to RTDs? You will be surprised, Mr Deputy Speaker, that the spirits industry estimates the cost of low- and mid-strength RTD equivalence to packaged beer to be less than $2 million per annum. Bear in mind that when this arrangement was made in respect of beer by the Labor government in its 1988 budget the net revenue effect was a $400 million loss to revenue. So we are talking about a very minor impact upon the fiscal bottom line.

Another aspect to consider is the impact a simple change to taxation arrangements might have on public safety. We frequently see public education campaigns focusing on responsible drinking—and I applaud those campaigns—but how can we put their ideals into practice? Road safety is one of the most important issues confronting the Australian people. Since the time of the invention of the car, 160,000 Australians have been killed in road accidents. In economic terms, the cost of road trauma is currently estimated at about $15 billion a year. In an effort to allay the cost, the government has invested huge sums of money to create safer vehicles, safer roads and better driver behaviour. Perhaps we should also consider encouraging the production and consumption of low- and mid-strength alcohol products such as RTDs, which represent around 11 per cent of the Australian alcohol market.

Something else to consider is the possibility that by encouraging manufacturers to increase the production of RTDs in Australia by way of a fairer taxation environment we might actually help reduce the national road toll. I know it sounds like a preposterous proposition, but it is backed up by the Australian Transport Safety Bureau’s Community Attitudes to Road Safety survey of 2005, which says in part: ‘There is evidence that the price of alcoholic beverages and the price differentials between low-alcohol and high-alcohol beverages both have effects on alcohol consumption, which impacts on road safety. Addressing pricing issues may therefore be a useful strategy to consider in the context of server intervention programs.’

The survey goes on to say that there is anecdotal evidence to suggest that mid-range low-alcohol beers appeal to people who would otherwise drink regular strength beer. It also reported that, since the introduction of lower legal blood alcohol limits and the intensive anti-drink-driving enforcement strategies, the market share of low-alcohol beers has increased to around one-quarter of all beer sold. That is not me, the member for Hinkler, speaking; that is the Australian Transport Safety Bureau.

According to the Alcohol Education and Rehabilitation Foundation, alcohol is associated with 30 per cent of all car accidents and road deaths and is the leading cause of death amongst young men aged between 15 and 24 years of age. The foundation also reports that men and women aged 15 to 24 years are involved in over one-half—that is, 52 per cent—of all serious alcohol related road injuries.

Interestingly, while we all know that the legal blood alcohol concentration limit for drivers is 0.05 per cent, statistics show that many consumers have difficulty judging that amount when they are drinking and judging when they might reasonably have reached their limit. While more than half—around 54 per cent—of beer drinkers accurately identified the number of standard drinks in a stubby or a can of full strength beer, 66 per cent of wine drinkers continue to underestimate the number of standard drinks contained in a bottle of wine. The beauty of RTDs is that consumers know exactly how much alcohol is contained in the drink. RTDs have a consistent, known, reliable and measured quantity of alcohol and are obviously a more responsible way to drink. This brings me to another point: RTDs are all too often demonised for targeting young and underage people. This is a totally incorrect assumption, one easily made by critics and one they never seek to justify. In several ways, RTDs actually help reduce the risk of dangerous alcohol consumption.

The National Drug Strategy Household Survey of 2001 provided some very interesting results, including the fact that male teenagers, aged 14 to 19 years, drinking at low, risky or high levels of harm in the short or long term most commonly drink regular strength beer. Female teenagers in the low-risk category drink pre-mixed drinks—and I ask you to note that—but female teenagers, aged 14 to 19 years, drinking at risky or high-risk levels in the short and long term, commonly drink bottled spirits and liqueurs. Quite obviously, if you get an RDT at a measured strength, people are going to drink more responsibly.

The Department of Health and Ageing also came up with similar information from four tracking studies it conducted between 2000 and 2002. Some of the key facts to emerge from those studies are that beer is the most popular drink amongst higher risk male drinkers, RTDs are not significantly preferred by higher risk female drinkers and RTDs are the most popular drink of low-risk female drinkers. They are three areas in which we can look at this. These results clearly defy the common assumptions that RTDs target young people. (Time expired)