Andrew Murray (WA, Australian Democrats) Share this | Hansard source

I will speak briefly. I must say with respect to this inquiry that I would urge all those interested in this topic to read not only the majority report—which is a very interesting report, I might say—but also the dissenting report from the Liberals and the additional comments from both myself, for the Democrats, and Senator Siewert. I think that, when you read all of those together, you get a very good picture of where we should go and how we should advance this cause. There is one thing in the remarks of both the chair and the deputy chair that I agree with: universally, all senators recognise that there is a problem and it needs to be addressed. There is no doubt about that.

Once you have accepted there is a problem, you have got to come, of course, to the solution. I say with respect to the measures that are in the policy which is the subject of this report that the Democrats have no issue with the price of alcohol being increased via excise if the social intent is to reduce the harmful consumption of alcohol. We support measures, including price measures, that will significantly reduce the harm caused by the excessive consumption of alcohol. We have no set level of excise or alcohol tax in mind that will achieve this goal. The level at which excise is set for those purposes is always going to be a matter of judgement—a behavioural guess—and the Treasury is as good at that sort of estimate or guess as any. What we do take issue with is excise actions in one alcohol category—in this case RTDs—in isolation from action in other alcohol categories which are capable of being easily substituted for the targeted category. The behavioural logic is easy: price affects consumption; raising the price should lower consumption. However, if there are easy substitutes, no significant fall in consumption will occur, so you have to raise the price of all substitutes too.

What was disturbing at both the June Senate budget estimates and at the committee inquiry was that the question of substitution seems to have been swept aside or diminished in importance. Yet it is central to the question of whether a premixed drink excise increase will work at all in reducing the harmful consumption of premixed drinks, particularly by young people.

At the time of the announcement of this excise increase for premixed drinks, the Democrats said that it must be matched by other action. That is exactly what the chair has said; it is exactly what the deputy chair has said. Despite helpful reform in the last decade, for which they should get credit, the federal government’s alcohol tax policy lacks integrity and consistency.

The Democrats essentially say that alcohol is alcohol whatever its source, yet the alcohol-pricing regime is selective between and within alcohol categories, not on rational grounds but on random grounds. The detrimental effect of alcohol comes from the amount consumed, not from its type, its packaging or its flavour. Accordingly, the Democrats put forward two recommendations. Our first was that the Henry tax review examining alcohol taxation have regard to these three general principles: all products in the same product category should be taxed at the same rate; all products with the same alcohol level should be taxed at the same rate; and the lower-alcohol and mid-strength beer excise should be matched with a lower-alcohol and mid-strength RTD excise rate.

Our second recommendation followed on from the Senate’s unanimous call, agreed on 13 March 2008, for a full review of alcohol policy—and by ‘full’ I mean very comprehensive. Our second recommendation was that the government comply with the Senate motion of 13 March 2008 calling for a comprehensive, holistic review of all aspects of alcohol. If there is anything that this inquiry has shown, it is that you cannot address this matter in isolation. You cannot just deal with the RTD issue. The government, I think, would be delinquent not to heed the Senate’s unanimous call for a comprehensive inquiry.