Alan Eggleston (WA, Liberal Party) Share this | Link to this | Hansard source

As I was saying earlier, this alcopops tax is no more than a revenue-generating exercise by the government, disguised as an attempt to address the problems caused by excessive drinking among teenagers. However, I would suggest that if the government were genuine in this endeavour, rather than an increase in tax focused on a preferred drink of young people, the broader issue of alcoholism in the Australian community would have been addressed. If a tax were to be introduced, I would suggest it should have been to put in place a volumetric tax on alcoholic drinks whereby drinks are taxed according to the percentage of alcohol they contain so that a low-alcohol-content drink would have a low tax and thereby be cheaper, and a high-alcohol-content drink would have a high tax and thereby be more expensive.

There is no doubt at all that alcoholism in Australia has a huge impact, a horrendous social cost, and also has huge costs to industry in this country. The social costs include the impact on families of domestic violence, marital disharmony and breakdown, a huge cost to the social services budget looking after people claiming social security as a result of breakdowns in marriages, unemployment benefits and so on, and then there are the long-term or subtle effects such as underachieving children who are victims of alcoholic parents and broken marriages. As we all know, there is a huge impact of alcoholism in Indigenous communities. We have read about what has been happening in the Northern Territory and in the north of Western Australia in towns like Fitzroy Crossing and Falls Creek and Kalumburu. Alcoholism is wrecking those societies. I remember attending a seminar that BHP ran in Port Hedland, where alcohol was labelled the biggest drug problem Australia faced and caused a huge cost to industry as a result of workplace and other injuries, loss of time at work, decreased efficiency as well as domestic social problems outside of the work environment.

According to the Alcohol and Other Drugs Council of Australia, the carnage left by alcohol misuse is staggering. Around one-third of Australians put themselves at risk of alcohol related harm in the short term, such as premature death or disability, from events such as road injury, violence and assault, on at least one occasion in their lives. Almost 10 per cent of the population consume alcohol in a manner that puts them at risk of long-term harm, such as cancer, cirrhosis of the liver, cardiovascular disease, suicide and so on. It is estimated that nearly five per cent of the total injury and disease burden in Australia is attributable to alcohol. Alcohol is the major cause of drug related death among young Australians. Elevated blood alcohol levels are implicated in one-third of all road traffic accidents, and they include accidents involving people under the driving age, strangely enough.

As I was saying in my earlier, rather short contribution today, if we in Australia are to deal effectively with the problem of binge drinking and alcoholism, then the government has to be serious about finding solutions. The cost of alcohol to consumers is an important factor in curbing excessive drinking, and tax, as I have said, is an important factor in the cost of drinks. I believe that a volumetric tax is the most obvious way to use this fact in reducing the consumption of alcoholic drinks in Australian society, and thereby mitigating, if not substantially reducing, the social consequences of alcoholism in Australia.

Only recently in Scotland, the government recognised this and announced a plan to introduce a standard price per unit of alcohol consumed in Scotland. This was done to tackle the $3.5 billion cost of alcohol abuse in Scotland—the Scots of course are very famous for their habit of indulging in the drink which carries their name, but the social consequences of that habit are huge. I can understand why the Scottish government has sought to do something about this. Similarly, pivotal research in Australia in 1999 by Curtin University of Technology, which conducted a study into cask wine drinking patterns in the Northern Territory, found that with the introduction of a surcharge the average consumption of alcohol was significantly reduced, which of course is the principle the Scots are applying in their legislation. As I said earlier, currently cask wine, with an average of 12 per cent alcohol, is taxed at about 6c per standard drink compared to beer, which averages three per cent alcohol and is taxed at a whopping 43c per standard drink. In other words: lower alcohol beer is taxed at a rate of seven times higher than the high-alcohol-percentage cask wine—QED.

With a volumetric tax on alcohol, by contrast, the tax on beer would be one-quarter that of the tax on wine. I think the implications of that should be obvious to anyone who gives it any consideration whatsoever: the price of low-alcohol beer would be substantially lower than the price of a glass of wine. As I have said, it is widely recognised in Australia that alcoholism is one of the most serious causes of social problems in our society. The fact that the Rudd government has selectively increased the tax on one form of alcoholic drink—namely, alcopops—underlines the sheer hypocrisy and insincerity of the Rudd government on this issue. There should be no doubt in anyone’s mind that this alcopops tax is nothing more than a revenue-generating measure rather than a serious attempt by the Rudd government to deal with the serious problems caused by alcoholism in our community—which, as I have said, could be ameliorated were a volumetric tax on alcohol introduced.

I also said earlier that the AMA has for years supported the concept of the introduction of a volumetric tax on alcohol, as has the Productivity Commission, the Australian Council of Social Service, the National Centre for Research into the Prevention of Drug Abuse, the Salvation Army and the Alcohol Advisory Council of Western Australia. The Rudd government must be aware of the position of these bodies, of the extent of the damage alcoholism causes on an ongoing basis in the Australian community and of the need for the federal government to develop a strong, broad policy profile to counter these problems. The alcopops tax is certainly not such a broad measure that it will do very much of anything to deal with the general problem of alcoholism in our community.

Given this, for the government to pretend that the alcopops tax was anything but a short-term revenue-raising measure is absolute nonsense. After almost a year of this tax being in place, the Rudd government has been unable to demonstrate that the alcopops tax has had any impact on teenage binge drinking; in fact, teenagers have just shifted back to full-strength spirits and bought themselves cans of Coke to go with them. Accordingly, I call upon the Rudd government to demonstrate some leadership in dealing with the problem and the horrendous consequences of alcohol abuse in this country. While any serious attempt to counter the problems of alcoholism in Australia would include education, law enforcement, industry involvement and rehabilitation services, an important part of any solution has to be the introduction of a volumetric tax on alcoholic drinks so that there is a cost incentive to encourage drinkers to move to low-alcohol drinks across the board. In the meantime, this cynical fraud—this alcopops tax—should be rejected by the Senate as a means of indicating to the government that the Senate wants the government to come up with some real solutions to the problems caused by alcoholism and alcohol in general in our society.

Carol Brown (Tasmania, Australian Labor Party) Share this | Link to this | Hansard source

I rise today to make my contribution to the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 debate. I am proud to stand here today as a member of a government which understands the effects of binge drinking, as a member of a government that is committed to tackling the serious problem of binge drinking and as a member of a government which is putting in place practical solutions to reduce the levels of risky and at-risk drinking.

It is the legislation we are debating here today which has formed a crucial part of the government’s strategy to try to reduce the levels of harmful drinking amongst all Australians and especially amongst younger Australians, who often turn to these sweet, sugary-tasting drinks—the RTDs, also known as alcopops. It is for this reason that the government on 26 April 2008 undertook the step to increase the rate of excise on these beverages from $39.36 to $66.67 per litre of alcohol content. This new level of tax now applies to all spirit based ready-to-drink beverages which do not exceed 10 per cent alcohol by volume. The amendments contained in these bills will also ensure that new beer and wine based products which mimic the taste of ready-to-drink spirit beverages will not escape this new tax. The Rudd government has acted to ensure that these beer and wine based RTDs which have become more prominent in the 12 months since the last measures were introduced do not become a loophole for alcohol manufacturers to exploit, whereby they would be able to produce products which were very similar in taste to spirit based alcopops but attracted a lower tax because they were beer or wine based.

The measure we introduced in April last year reverses a decision made in 2000 by those opposite. It was back in 2000 that those opposite decided to give alcohol companies a tax break by taxing alcopops at a rate similar to that for full-strength beer. It was this decision that made alcopops far more affordable for young people and, consequently, the drink of choice for a large number of them. As a result of those opposite giving the alcohol companies a tax break, an explosion of alcopop sales occurred; even the alcohol industry itself admits that, since 2000, sales of alcopops have increased by 250 per cent. These alcopops are marketed directly at young people. Alcohol companies use bright colours and sweet flavours to hook young people on them—not to mention the fact that the sugary taste of the alcopops helps mask the distinctive taste of alcohol. Most RTDs have quite a strong alcohol content; with most ranging between five and seven per cent, many young people are able to drink these products quickly and get drunk faster.

This is why the Rudd government moved to correct the bad decision made by those opposite. We are a government which is serious about addressing the binge-drinking epidemic which Australia is currently experiencing amongst young people. For too long we had a government which provided little action on binge drinking, but now, finally, we have a government—the Rudd Labor government—which is determined to find practical solutions to excessive alcohol abuse. Like many of my colleagues, I call on those opposite to stop playing politics and to join with us to pass this measure and rectify past mistakes. During the Senate Standing Committee on Community Affairs inquiry hearings on alcopops, there were wide-ranging discussions on sources of data presented as evidence. As stated in the majority report, the committee preferred sales and consumption data rather than the survey data as the basis for its findings, although survey data was also widely used in the hearing. In evidence, Professor Steven Allsop, appearing in a private capacity, stated:

… it is universally accepted that sales data are strongly and closely aligned to consumption … Even national surveys with very large sample sizes, like the highly regarded National Drug Strategy Household Survey … account for less than 60 to 70 per cent of alcohol known to be consumed from sales data …

So what does the sales data tell us? Let us look at the Australian Taxation Office clearance data. This data tells us the amount of taxable alcohol in beer, spirits and RTDs sold in Australia. As the Senate committee’s majority report states:

Compared to the same period in 2007, the clearance figures for the period May to September 2008 show:

• a 34.6 per cent decrease in alcopops clearances;
• a 17 per cent increase in full-strength spirit clearances;
• a 7.9 per cent decrease in total spirit clearances (RTDs plus full-strength spirits); and
• a 6.1 per cent increase in beer consumption.

The ATO figures also show that, since the introduction of the measures, the growth in excisable alcohol consumption has slowed. The Department of the Treasury reported that the current projections, based on the ATO figures, show a reduction in consumption of RTDs of 34.6 per cent. We have also have ACNielsen Liquor Services Group data. Across all the beverage types, the figures show a 2.7 per cent decrease in consumption, which is equivalent to 64 million standard drinks. The ACNielsen ScanTrack data comparing May to January 2008 with the same period in the previous year shows:

• a 29 per cent decrease in total sales of RTDs (equivalent to 310 million standard drinks);
• a 24 per cent decrease in sales of RTDs with more than 6 per cent alcohol;
• a 31 per cent decrease in sales of RTDs with less than 6 per cent alcohol; and
• a 38 per cent decrease in sales of vodka-based RTDs with more than 6 per cent alcohol.

The biggest decrease is in vodka based RTDs, which are designed for and targeted at young people. As Mr Munro from the Australian Drug Foundation pointed out, the 38 per cent decrease in vodka based RTDs is a significant result in the context of the stated intent of the tax increase:

… it is important, given this tax is aimed particularly at young, underage drinkers and young female drinkers, to recognise that vodka alcopops are preferred by young drinkers and particularly by young females.

So this is telling us that the tax has been successful when it comes to reducing the attraction of and demand for alcopops, with a massive decline in alcopops sales, the largest decline being in the sales of the vodka based, high-alcohol drinks favoured by young women. The Senate committee’s majority report points out:

… there was no significant dispute that RTD sales have reduced significantly since the tax increase.

There were a number of positions put forward regarding the substitution effects following the tax measure—that is, consumers of alcopops moving to other cheaper alcoholic beverages. While all submitters and witnesses agreed that some level of substitution has occurred, there was disagreement as to its extent and significance. The Alcohol and Other Drugs Council of Australia in their submission to the inquiry stated:

At present there is minimal data to either prove or disprove significant substitution effects.

However, they expressed the view that, while the ATO data did show that there was a substitution from RTDs to full-strength spirits, total spirits consumption fell by 330,000 litres of pure alcohol. Another issue was the effectiveness of cost-shaping behaviour. A number of public health experts endorsed the effectiveness of the price-levers approach to reducing alcohol consumption.

I am baffled as to how those opposite still cannot put all of the pieces of this simple puzzle together and support this bill. The first piece of the puzzle illustrates clear facts about the levels of young people undertaking risky drinking. The 2007 National Drug Strategy Household Survey found extremely distressing patterns of binge drinking by Australian teenagers, especially teenage girls. The survey found that, in any given week, approximately one in 10 12- to 17-year-olds—which equates to 168,000—reported binge drinking or drinking at risky levels. Almost 20,000 girls aged between 12 and 15 reported that they drink daily or weekly, and more than one in four girls aged between 14 and 19 years—237,000 girls—drink at risky or high-risk levels every month.

These are, indeed, very distressing figures. They clearly highlight the huge binge-drinking problem among young Australians. This is coupled with the evidence of the surge in popularity of alcopops, which can be found in a survey commissioned by the department on the alcohol consumption patterns among Australian 15- to 17-year-olds. This survey identified that, between 2002 and 2004, the percentage of female drinkers aged 15 to 17 reporting they had consumed alcopops at their last drinking occasion jumped from 14 per cent to a staggering 62 per cent. In addition, the Australian secondary school students’ use of alcohol in 2005 report found that, between 1999 and 2005, the proportion of teenage girls aged 12 to 17 who chose RTDs as their preferred drink rose from 23 per cent to 48 per cent. These facts clearly prove that binge drinking is a major problem among the youth in this country. What is even more alarming is the surge in the popularity of alcopops as the drink of choice for young people.

The second piece of the puzzle is the testimony of so many health experts in support of this measure. I might just remind the chamber of some of those. Mr Geoff Munro, the National Policy Director of the Australian Drug Foundation, said:

The industry claims a rise in tax has no impact on consumption of alcopops. But increasing taxes is a proven and effective method of decreasing sales of alcohol to young people. This tax is working on young people. If it prevents young people from taking up drinking early in life, it will have a profound impact on the health of Australians.

Dr Rosanna Capolingua, President of the Australian Medical Association, said at the Senate inquiry into these bills:

Teenagers who have limited disposable income will be particularly sensitive to price. This strongly suggests that a very effective lever to reduce teenagers’ consumption of alcopops is to raise their prices through an excise and/or custom tax increase. The AMA believes that current evidence from Australia and overseas provides every reason to expect that the alcopops tax will act to reduce demand for alcopops. Recent and emerging data in Australia on the consumption of alcopops appears to confirm this particular expectation.

Mr Daryl Smeaton of the Alcohol Education and Rehabilitation Foundation said:

International evidence demonstrates that taxing alcopops at the same rate as bottled spirits will change the consumption patterns amongst young people and lead to less alcohol-related harm. Australian Education and Rehabilitation has economic modelling data which demonstrates that young binge-drinkers prefer to drink Ready to Drink (RTD) spirits because they offer the most alcohol for the cheapest price.

And the final piece of the puzzle, for the benefit of those opposite, is of course empirical evidence which shows a reduction in the sale of alcopops.

Australian Taxation Office figures gathered from the first nine months since the increase in the alcopops tax are significant: they show that alcopops sales have dropped 35 per cent compared to the previous year. In fact, the Hon. Nicola Roxon, the Minister for Health and Ageing, rightly pointed out in the other place that these figures are significant and well beyond the government’s modest predications. She said:

When this measure was first introduced, modelling predicted that it would slow the astronomical growth of alcopops sales, which would have been an achievement in itself. In fact, alcopops sales have slumped—bringing overall spirits sales with them. Despite a smaller increase in full-strength spirits sales, overall spirits sales have fallen by almost eight per cent.

I hope now that I have outlined for those opposite the three key pieces of the puzzle so that they might be able to put them together and come up with the solution and pass this legislation.

We have the first piece: the measure is backed by research. The second is that the measure is backed and supported by a wide range of health experts and professionals. Finally, the measure is backed by evidence which shows a clear reduction in the sales of alcopops. I call on all those opposite to act now and join with the government to get serious about tackling binge drinking. All the evidence supports the government’s measure as an effective policy initiative to reduce alcohol abuse.

If this measure is voted down in this place, the government will be forced to hand back to alcohol companies around $290 million of tax already collected. By not supporting this legislation, those opposite will be responsible for taking a significant amount of funding away from Commonwealth preventative health measures. It is extremely important that those opposite support the measure that we are debating here today, because it forms one part of the Rudd Labor government’s large-scale approach to tackle binge drinking.

In March last year, the Prime Minister launched the National Binge Drinking Strategy. This involved $53.5 million of funding to initiate three new practical measures to help reduce alcohol abuse. At COAG, the Rudd Labor government announced that it would be making the single largest investment by an Australian government in preventative health. The $872 million of funding has been provided to support a range of programs and interventions to reduce the impact of chronic illness in the community.

This government has firmly put alcohol abuse as a high priority in the National Preventative Health Partnership. Currently, the National Preventative Health Taskforce is developing a national preventative health strategy for Australia which will deliver more significant initiatives to tackle alcohol abuse. The Rudd Labor government has a clear-cut plan to bring down risky levels of drinking. The Rudd government has put in place a range of successful policy measures to help reduce alcohol abuse, and we have an opposition who are still unwilling to jump on board and support the government in this fight.

The Senate majority report makes two recommendations. The first was that the government develop strategies to facilitate the collection and coordination of national public health data. The second recommendation was of course that the legislation be passed.

As I have said, a number of health professionals and experts in the field—people who have dedicated their adult lives to public health policy—support this legislation. And who opposes this legislation? The industry; the spirit manufacturers; those who stand to lose financially with the reduction in sales of alcopops—those very people who, as Minister Roxon noted, showed a willingness to target the youth market with new alcopops-style products that avoided the tax increase.

As I commend the legislation to the chamber, I can only hope that those opposite have a change of heart and support these very important preventative health measures. On concluding, I remind the Senate of Professor Moodie’s comments. When asked what message the community would receive if the alcopops tax legislation failed in the Senate, he said, ‘I think it will be quite devastating.’

Cory Bernardi (SA, Liberal Party) Share this | Link to this | Hansard source

In rising to speak on the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009, I would like to let the Senate and anyone listening know that I come from a family that has had a great deal of interest in the wine and liquor industry. My father has been a publican and a restaurateur; I have been involved in hotels, as have my brothers and my mother—and quite proudly so.

As a publican, I have seen—and I am sure other publicans have seen—all manner of behaviour as a result of inebriation. On occasions, it may be fair to say that some of us have been affected in one way, shape or form in regard to that. However, I do not believe, frankly, that a great deal has changed over the last decade—certainly since my first exposure to the hotel industry. People will, unfortunately and regrettably, sometimes overstep the mark in regard to the consumption of alcohol. Sometimes this is indeed intended. They go out and deliberately set out to become inebriated. They think that it is going to enhance their good time. Others on occasion simply have one drink too many and, appropriately, find themselves perhaps unable to function at their full capacity.

Society has done a great deal and taken a great many steps to ensure that a great many of the harmful effects of overconsumption of alcohol have had their impacts reduced within the community. We have had anti-drink-driving advertisements and laws in place. That has certainly changed people’s behaviour for the better. I regret, as I am sure all senators do, that so many people continue to flout the law in this regard. But to suggest that there has been an increase in binge drinking goes against every instinct in me and every piece of anecdotal evidence that I have seen accumulated over the course of my 40-odd years of life. There are lots of young people who experiment with alcohol. Some will see that as a coming of age while others will regard it as a dereliction of responsibility, either by parents or society as a whole.

To increase the tax regime on a single alcohol product or a variety of alcohol products in the same category is, I think, addressing the wrong problem. If you have an epidemic of binge drinking, the problem concerns how it is that children get access to alcohol when they should not have access to it. Are hoteliers or publicans flouting the law by selling alcohol to children or are children just being as ingenious as they always have been in obtaining what they can, where they can, whether it be when their parents are out or from a compliant adult or from one of their friends who looks somewhat older than they are? There are any number of reasons that people can obtain alcohol when they are not entitled to it.

It is really gilding the lily to suggest that simply because someone has a drink that happens to be a whisky and coke in a can, or any other ready-to-drink beverage, it is somehow a greater crime or a greater problem than if they were to drink a beer, which has a similar or the same alcohol content. It gilds the lily to such an extent that, instead of addressing what is, I think, a serious issue in our community—notwithstanding the fact that I do not think it is any greater than it has been over past decades—it is being dressed up as a health issue when the government is really just trying to extract billions of dollars from the Australian community. I think that is wrong.

I say that in all genuineness because I do not believe that the Australian people need any more taxation, quite frankly. We have to remember where this tax was conceived. This tax was conceived when there was a war on inflation and we had to slow the economy. We had to slow the economy because inflation was the genie that was out of the bottle—this was less than 12 months ago. This shows how clearly the Rudd government have misread the Australian economy. They dressed this new tax up and said, ‘We are going to save young people from themselves.’ These are the same people who handed out billions of dollars in their cash splash and said that it was okay for people to spend that money on poker machines or drinking or on any other vice they liked. It did not matter as long as it was spent. And yet there are probably millions of Australians who have been penalised by this illegitimate taxation increase because it has been dressed up as a measure to stop binge drinking.

I will put my hand up and say, ‘I am very happy to have a ready-to-drink can, because it is convenient.’ It means that if I am going out to a barbecue and I do not feel like having a beer or a wine I can have a premixed drink and know exactly what dose of alcohol I will be getting. I am not alone. Many people in our community find this to be a convenient way of enjoying alcohol responsibly. Sure, some people choose to abuse it by consuming too much. But people choose to have too much of any number of products they consume, including alcohol, no matter whether they buy a carton of beer instead of a six-pack of beer or a flagon of port instead of enjoying a more moderated dosage. If people want to get stonkered, they will. If that is what they want to do, that is what they will do. The way to change that behaviour is to educate the person, to help them through if they have a problem with it and to make sure that we change the attitudes of society towards the acceptability of it. That is part of the deal that we have got to do.

The problem with this measure is that it is just taxation; it is a pecuniary taxation measure that targets everyone who enjoys reasonable consumption of alcohol. It does not address the fundamental root cause of the problem of alcohol abuse, which may be self-esteem, or society’s ideals or other issues. It does nothing to redress the consumption of alcohol. I do not just say that anecdotally, because in the Senate committee report on ready-to-drink alcohol beverages—and I have to say it was excellent, particularly the report at the back from the coalition senators—the Australian Drug Foundation presented some data that was obtained by ACNielsen. I am advised that this is the most comprehensive and up-to-date data on overall packaged alcohol sales in Australia—this is off-licence consumption where you go to a bottle shop and take away the drink of your choice. In the month on month figures from January 2008 to January 2009 there was an increase in consumption of nine million standard drinks. Yes, there was a change in the consumption of ready-to-drink beverages—of course there was because they had just put the price up enormously. And people said: ‘I do not want to drink them. I cannot afford to spend $30 on a six-pack of ready-to-drinks, so what will it do? I will buy some beer or I will buy a big bottle of spirits and mix them myself.’

Where is the common sense in this debate? If you put up the tax on one product it simply transfers the consumption to other products or, indeed, to other substances. The increase in monthly consumption of standard drinks was nine million and that data says it all to me. I am approaching this from a position of realism, because I have lived and worked in the hotel industry and I have been exposed to it for all its good and all its bad. I will not stand by and listen to the people in the liquor industry being condemned by the other side of this chamber when its products are enjoyed responsibly by so many people. The people involved in the ready-to-drinks industry and the spirits industry are defending their own interests, and the interests of people who responsibly enjoy ready-to-drinks or spirits, and they have exposed that this is nothing more than a taxation grab that is not going to make a meaningful difference to alcohol consumption or binge drinking in this country. These industry representatives have been scathingly condemned for that by the other side of this chamber. Anyone would think we were dealing with an illegal product. We are not. We are dealing with a legal product that is enjoyed responsibly and the other side simply want to tax it to fight their war on inflation—a war that we know was phoney and unnecessary.

When you are giving a speech in a debate and your contribution is broken as mine has been by the suspension of the sitting, you are able to reflect on what you have already said. In case I stated it incorrectly, I want to reaffirm to the Senate the point I was making about the increase in net alcohol consumption in terms of standard drinks. I referred to a nine million increase in standard drinks year on year. What I want to clarify, to make sure it is understood, is that this is a nine million standard drinks increase in one month alone compared with the figure for the same month in the previous year. So, in January 2009, nine million more standard drinks were consumed than in January 2008. I am repeating this so that, firstly, the Senate understands exactly what I meant and, secondly, to highlight once again the folly of this tax on one sector of the alcohol industry. It has simply translated consumption from one product to another. The social engineers are well at work within the Labor Party, dressing up this tax and saying they are saving young people from binge drinking. Really, they are not saving people from binge drinking; they are transferring binge drinking or any alcohol consumption into other products and penalising, unfairly, millions of Australians. And they did it because they desperately wanted to grab some additional revenue to slow the economy when growing an economy was evil and was going to be the recipe for doom because the inflation genie was out of the bottle, as Mr Rudd said. We know that was a myth. We know that was a hoax. We know that this government clearly has no idea and no capacity to manage an economy. But, gosh, it knows how to tax.

Ever helpful, I would like to suggest that if the government were serious about redesigning the tax system within the alcohol industry it would look to a more measured effect. It would not target a particular product that, in this case, has about the same alcohol content as a standard beer. It would not target a product that gave people a measured dose. If it were serious about this it would ensure that all products containing alcohol were taxed according to their alcohol content. I know that any number of people would disagree with that, but the fact is it makes sense—and, if we cannot bring common sense into this equation, what can we do? We have to have common sense in how we write and interpret legislation. To those who argue against it, I say: a beer with five per cent alcohol is the same as a ready-to-drink with five per cent alcohol or another beverage with five per cent alcohol. They are the same: they have the same impact and effect on people—unless I have missed something here about alcohol affecting people differently depending on what it has been mixed with.

So we have a refusal by this government to take on any serious reform. I understand there are sensitivities around introducing a volumetric based taxation system into the alcohol industry because it will affect a number of key sectors, including the wine industry. But let me put some cards on the table here. I am a great supporter of the wine industry and I think Australia’s future in wine lies in the upper, premium end of the market where we can add good value because we have outstanding grapes. If we are going to continue to compete in the lower, bottom end of the market I think we are going to get swamped. I say that not because I wish it to happen but because we see overseas countries that are lower cost producers and sometimes do not have the same resource restrictions that we do, most prevalently through government inaction on the Murray River which is reducing some of our wine grape growers to such meagre allocations of water that they cannot adequately grow grapes.

Rather than tackle that issue and take a sensible and measured approach and say, ‘Let’s look at how we can make a transition in this regard,’ this government says, ‘No, if it is something with sugar in it which is in a can that you have to open to drink, and if it contains alcohol, then it is the evil causing our kids to binge drink.’ It ignores the millions of people who drink responsibly in this country. And, as I said, it has been proved that the government’s approach has not decreased consumption of alcohol at all. I quoted the figures before, showing that nine million more standard drinks were consumed in January 2009 than in January 2008. Those figures are not in dispute; they are from a reliable dataset that is incorporated in the outstanding report that Senator Cormann and others have contributed to. If we accept that this bill has had no reasonable intended effect, and we say it is flawed and is no longer about slowing the economy—although the Rudd government is doing an enormously good job at slowing the economy and decimating families across the country—then what is it about? It is about cash. It is about Labor reverting to type: ‘We want your money. We think we are better equipped to decide how it is spent. We think we are better than you at deciding what is good for you.’ That is the theme of this government, except when it wants to throw billions of dollars out in a cash splash and says to people: ‘Yeah, you can go out and play the pokies and drink to your heart’s content. It doesn’t matter what you do with your money as long as you spend it.’ That is the ill-considered policy contradiction of this government.

One question that has to be asked now is: if this revenue measure is not endorsed by the Senate, what happens to the $290 million from this tax that has already been collected? Frankly, there are any number of ideas. The alarmists will tell you that the alcohol industry wants it back and is demanding it back. The people in this industry have been characterised in the most vile and vicious way by those who are seeking to make a political point. It is really quite grubby when a legal industry is targeted so horribly in the name of defending a very flawed policy.

The coalition wants to see the $290 million in tax spent in a positive way that will benefit the community—through education. That is why I support the amendment moved by Senator Cormann in the second reading debate today. It is very important that we make a positive contribution to the community, particularly when there has been such a stuff-up by the government, who have lost control of their own legislative agenda. It has been such a stuff-up because it has not had a meaningful impact on binge drinking; there is no evidence to support their goals, and no anecdotal evidence; and it does not pass the common-sense test.

If a bill does not pass any of those tests, what should we be doing? We should be making the best out of it. Let us make the best out of this. Throw this silly legislation in the bin or, if you cannot do that, amend it so that the $290 million or so is spent in a positive manner. Will the Labor Party do that? It is a challenge to the Labor Party. It is going to be a challenge to the other senators in the chamber as well to see whether they will accept such a positive and inspired amendment as was moved by Senator Cormann.

We have to get serious about this. No more monkeying around. The Australian people have been sold a pup by this government. This government said that there is not a sliver of economic daylight between them and the economic conservatives. We now know that that is not true. This government said it would stand up for working families. We now know that that is not true, because there are fewer working families, and the working families who enjoyed a ready-to-drink beverage can no longer do so at a reasonable cost.

This government has been making slipshod decisions on the run, desperate for an agenda. It found an agenda and this agenda is absolutely flawed. It tried to slow the economy. It was so successful at slowing the economy that the economy is now teetering on recession. These are the issues that the Australian people are concerned about. They want to know that their standard of living is not going to be jeopardised and they do not want these hidden, grubby, low, taxation measures. And I say ‘low’ taxation measures because that is the scale at which they were slipped in, not because they are low-tax measures. They are low because the government slipped them in under the guise of worthwhile policy. They were slipped in under the guise of health measures, which has proved to be ineffective. This government is spinning out of control and this legislation needs to be rejected.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

The Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 are commonly known as the alcopops bills and they increase the excise rate and the customs duty rates applying to alcoholic beverages that do not exceed 10 per cent by volume of alcohol but include the mixing of spirits in their production. The stated purpose of these bills is to reduce youth problem drinking. This is based on the premise that young people, particularly young women, prefer ready-to-drink beverages, otherwise known as RTDs or alcopops. Research shows that the more we can delay the start of youth drinking and the extent of unsupervised drinking the more likely we are to curb problem drinking in adulthood.

When introducing these bills, the Minister for Health and Ageing claimed:

… the increase in the rate applying to alcopops reflects the government’s concern at the growth in alcopop consumption, alongside their appeal to young and underage drinkers—and the role that they play in encouraging binge drinking.

She also claimed that the ‘alcopops measure is not the only measure the government is introducing to tackle alcohol abuse’. Clearly, the minister believes that the purpose of the alcopops tax is to target youth binge drinking, including underage binge drinking, because of the sweetness of these particular beverages. It is an idea that I fully support.

In my home state, Drug and Alcohol Services South Australia reports that in excess of 85 per cent of South Australian children over the age of 14 consume alcohol and 85 per cent of South Australian school students aged 12 to 17 have tried alcohol. Further, in South Australia statistics show that almost 65 per cent of the alcohol consumed is done so in a risky or excessive manner. It worries me deeply that so many young people in my home state, and indeed nationally, are putting their health and their futures at risk through unsafe drinking. When considered with the growing rate of binge drinking amongst our youth, it makes this a paramount issue of concern.

Before discussing these bills further I think I should declare an interest in these bills—namely, that I have a teenage son. I know that this sort of declaration may be unconventional, but he is the most important interest that I have. As a parent I am acutely aware of the influences of peer pressure, alcohol advertising and social modelling on young people like my son and his peers. I believe all parents share these fears, and in most Australian families one does not have to look too hard to find a relative who has had a problem with drinking.

Neither does one have to look too far to see the devastating impact of problem drinking on their partner, their children and their lives. I drink rarely, but I am no wowser. I believe that people should be able to enjoy a drink, particularly South Australian fine wine. But I believe that as adults we must drink responsibility, not only for our health but also for the sake of those who are silently watching our every action. With this in mind I want to commend the current DrinkWise campaign and the advertisement that is currently on television that highlights the role of parents in modelling responsible drinking.

So when the government announced a tax to target youth binge drinking, and specifically alcopops, I was hopeful. I was hopeful that all the revenue raised from the tax would go into health and education measures to address problem drinking; hopeful that the trial of the tax would result in a decline in overall alcohol consumption in Australia; hopeful that evidence would show that the tax also reduced binge drinking amongst our youth. Perhaps, as is my way, I was too hopeful.

When I looked at the initial alcopops package more closely I became concerned that it looked like the government was using a health issue to obscure what was primarily a revenue-raising tax. The alcopops initiative was not tied specifically to increased funding to reduce binge drinking. The initiative was not targeted beyond a claim that young girls, young people, liked RTDs. The initiative was not attuned to the possible substitution of other alcohol beverages or harder drugs.

But despite all this—to paraphrase The X-FilesI still wanted to believe that the truth was out there somewhere. I wanted to believe that this initiative would contribute to more people drinking less and fewer people drinking to excess. Consequently, over the last six weeks, I have repeatedly asked the minister’s office to provide evidence for the success of the alcopops tax. I have also asked my office to conduct a thorough review of all related research. This is because I believe the best way to distil the substance from the spin with these bills is to separate out each possible purpose of the tax and look at what the evidence says.

So my first question is simple: have these bills worked as a new tax? Clearly, the answer is yes. These bills will raise $1.6 billion in tax revenue for the government in the first five years, although it is significantly less than the amount first estimated.

However, my second question is a little more difficult: has this tax been used to support better health policy that targets unsafe drinking? It would seem that the answer to this is both yes and no. In response to a question I put to the government in February this year, Senator Ludwig explained that $872 million of new money from the alcopops tax will go to the National Partnership Agreement on Preventative Health with the states and territories. So, yes, this tax will support health and education initiatives. But the majority of this money will go into obesity, healthy activity and tobacco measures, all of which are worthy things. So the money raised under the guise of a youth targeted RTD tax is not being targeted to address youth binge drinking. Admittedly, the government has invested $53.5 million in the National Binge Drinking Strategy, but this was set aside anyway and is not tied to the new money from these bills. Further, $53.5 million for targeting problem drinking is nothing compared with the $1.6 billion to be raised by this tax or indeed the $6.75 billion, or thereabouts, in revenue that the government raises in alcohol excise each year.

While the government asserts that this is new money, how many of these projects are new and how many would have been funded in any event in the absence of this particular tax? That is an important question and I am still not satisfied with the extent of the answers I have received with respect to that. Despite my repeated requests for information, the government has not been able to be forthcoming about how much of the new alcopops money will go into new programs. Some would say the government is a bit elusive. In other words, the government is giving past initiatives or ones very much like them new names and new money so they can free up $872 million elsewhere in the budget. That is a question that needs to be asked. I look forward to answers from the government in relation to these questions.

My third question is the most complex of the three: has this tax had a direct health policy outcome by changing unsafe drinking behaviour amongst adolescents? As yet, I do not know. Let us consider if there is enough evidence to conclusively respond to this third question. Firstly, has the tax changed overall alcohol consumption?

Earlier this year, Senator Ludwig informed the Senate that the consumption of full-strength spirits had increased by 19 per cent between May and September 2008. Macquarie Research data suggests beer volume consumption was up 1.1 per cent for the November 2008 quarter against the same 2007 quarter. Curtin University reported recently in the Medical Journal of Australia that consumption of alcohol in April to June 2008 dropped by 2.7 per cent on same period of 2007. Meanwhile, Roy Morgan Research reported recently in its longitudinal, non-commissioned study of alcohol consumption that there was no change in consumption over the years 2007-08.

In short, overall alcohol consumption has continued the trend of recent years where there has been a slight decline, with fewer Australians drinking greater amounts. That is one assertion. In this, the alcopops tax may well have had a negligible effect, which leads to a second question: what has the alcopops tax done for RTD consumption? Treasury figures estimate that the fall in RTDs will result in a 10.5 per cent tax increase over the period 2008-09 and an increase of 15.8 per cent over 2009-10. This is largely due to a substitution to full-strength spirits.

Minister Roxon claimed in February this year that the alcopops tax has worked because tax figures say sales have fallen by 35 per cent in the last nine months compared to the previous year. Further, the ATO found a 54 per cent decrease in RTDs and a seven per cent increase in spirits in the period April to June 2008. Meanwhile, ACNielsen research has found that in May to November 2008 RTD consumed volume was down by around 27.6 per cent and the number of standard drinks down by around 31 million standard drinks. Over the same period, spirits consumption went up by around 12.6 per cent volume and 12.6 million drinks. That said, overall spirit consumption was down by about 10 per cent. ACNielsen also found that from May 2008 onwards RTD consumption was down significantly while spirits consumption was up, beer consumption was up slightly and wine consumption was down. Compare this with Roy Morgan Research, which found that RTDs as a part of total consumption declined from 7.9 per cent in 2007 to 7.2 per cent in 2008.

When focusing on the period since the introduction of alcopops, there has been a decrease from 7.9 per cent to 6.4 per cent in RTDs, but beer and spirits have increased. Morgan also found that total alcohol volume declined by 16 per cent for RTDs with an associated six per cent increase in beer and a seven per cent increase for spirits.

Curtin University research has found that consumption of RTDs in April to June 2008 dropped by 26.1 per cent from the same period in 2007. It found that there had been a shift to beer, which was up 1.5 per cent, and spirits, which were up by11.2 per cent. This is only half the decline in RTDs. Roy Morgan Research, interestingly, conducted research which showed that 18- to 24-year-olds buy according to brand rather than price. This questions the very premise of the alcopops measure in the first place.

So what do all these statistics tell us? Unfortunately, not a lot conclusively, but it would seem that while RTD consumption is down there has been a substitution effect into beer and spirits. However, the evidence is not available to know to what extent.

My third and most important question is: has the alcopops tax reduced adolescent binge drinking? For this question we have virtually no data. We know that the 2007 National Health Survey found that high-risk youth drinkers prefer beer if they are male and spirits if they are female. This study suggests that high-risk youth drinkers do not prefer RTDs, which casts doubt on the targeting of the alcopops measure.

But, beyond that, my office has not been able to find any evidence and the government, as yet, has not been able to provide me with such evidence to address the issue of the effect of the alcopops tax on youth binge drinking. Rather, there has been government and departmental criticism of research that does not concur with the government’s position, a matter with which I do not wish to engage.

So what we have is a situation where the government and the distillers are trying to slug it out when neither has the ability to deliver the knockout punch in terms of conclusive evidence. The important question remains: is this tax having a direct impact on youth binge drinking? Of the evidence presented to me so far, not only do I lack enough independent research supporting the government’s claims, I also lack virtually any evidence that any changes have been caused by the alcopops tax. Even if I give the government the benefit of the doubt and accept that the available research results point to change, this change is at best correlated; it is not causal.

Put simply, drinking patterns may have changed, but we do not know that the alcopops tax did it. Other influences on changing drinking patterns over the last year include broader social attitudes to drinking, media coverage of changes, drink promotions, the influence of the Christmas period, cash handouts, end of school and Schoolies Week and changing attitudes due to the global financial crisis. Anecdotal evidence from people I have spoken to in the industry and in correspondence with my office would seem to suggest that many young people have just shifted to another drink. And when we view alcohol consumption in the context of an Australian culture that views drinking as a sign of celebration, a badge of masculinity or a rite of passage, the matter becomes even more complex.

I am yet to see the evidence that convinces me that this tax is meeting its claimed health policy objectives. My adviser working on our review of this research was previously a research fellow on an Australian Research Council project and an academic who has assessed dozens of postgraduate applications for project approval. He informs me that if one of his PhD students came to him with this collection of research as evidence to substantiate the alcopops tax, he would send them out of his office and tell them to try again. This is not because each of the individual research projects is of a poor standard; rather it is because none collect the correct data to answer the specific question. There is no hard data to tell us if the alcopops tax has reduced youth binge drinking. So, if one cannot decide on the evidence, one must look at other arguments.

I must admit I have been swayed by the calls of the AMA and other health organisation to support these bills because they, on anecdotal or other grounds, believe they will help. And, like most Australians, I am more inclined to trust my doctor than a distiller. So, on balance, I am inclined to support these bills, but there still remain a number of reassurances that I need from the government.

I would like to be reassured that more of the revenue gained from this tax will be invested into new projects that specifically target binge drinking in Australian society. It is interesting to note that a media release of the Minister for Health and Ageing of 17 November 2008 titled ‘National Binge Drinking Strategy’ referred to the approval of 19 community projects to tackle binge drinking, totalling about $3½ million—for example, Newcastle City Council for a project to manage environments in the Newcastle late night inner city to reduce the level of harm associated with binge drinking; the Broken Hill Community Drug Action Team for the Drink Safe Community Initiative; and the Lutheran Church of Australia for the On Friday Night in Kilburn Project. All these seem like good initiatives for the local communities involved, enabling them to give alcohol-free alternatives to young people. But this is $3½ million. It is a paltry amount. There were over 300 applications; if you assume that many of those applications were worthy then what the government is putting into this is inadequate.

I would like to hear from the government what it is doing to address any possible substitution to other alcoholic beverages or harder drugs due to the introduction of the alcopops tax. I would also like a commitment from the government that it will commission independent research about alcohol consumption patterns and specifically problem drinking. With this information we will not find ourselves again trying to make such important decisions with such limited evidence.

Finally, I would like a detailed commitment from the government about any plans to address the important issue of the proper regulation of alcohol advertising. I thoroughly endorse the comments made by my crossbench colleagues Senator Siewert for the Greens and Senator Fielding on behalf of Family First. These are important issues, especially when you consider the impact of advertising. I refer to a University of Connecticut study published in the Archives of Pediatrics & Adolescent Medicine. This research found that for each extra alcohol advertisement experienced per month, young people consumed one per cent more drinks. I would expect that when it comes to sponsorship—and Senator Siewert referred to the VB sponsorship of some of our major sporting codes—it is even more pernicious and insidious in its impact on young people. These are issues that need to be tackled. The government, while it has made some commitments in relation to this, needs to go further and stand up to the alcohol industry and tackle these issues head on.

In summary, I want to believe that this tax will be responsible for a reduction in binge drinking in our community. But my question to the government is this: apart from my respect for the health and medical groups that have called for the continuation of this tax, why should I believe? The evidence appears inadequate, the existence of new programs is under question and the proposed health and education measures are not tied to this tax. The level of funding for these programs is quite paltry—quite inadequate in the scheme of things. It is inadequate in the context of the $1.6 billion this tax will raise over the next few years. It is woefully inadequate in the context of $6.7 billion that the Commonwealth raises from alcohol revenue each year.

My hope for the committee stage is that the government can provide the evidence and reassurances that I have requested so that my final decision can be made on concrete commitments rather than just hope and faith. I indicate my support for the second reading of these bills but reserve my position in relation to the third reading. I look forward to further discussions with the government in relation to this in the very near future.

Mark Furner (Queensland, Australian Labor Party) Share this | Link to this | Hansard source

I am pleased to be able to speak today in the chamber in relation to the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009. As a member of the Senate Standing Committee on Community Affairs I was present at the two public hearings in Canberra on 10 and 11 March 2009. Following the tax increase in 2008, the committee conducted inquiries into ready-to-drink alcohol beverages and the Alcohol Toll Reduction Bill 2007 [2008]. These inquiries provide some important context for the current inquiry. In particular, the RTD inquiry found:

Risky and high risk drinking by young people and underage drinkers—

particularly young women—

has become a major public health issue.

And:

Data over recent years has also highlighted the rise in popularity and influence of pre-mixed alcohols, known as ready-to-drinks (RTDs) or ‘alcopops’ … on teenage alcohol use, particularly for females.

And RTD beverages are a popular and commonly ‘first-used alcoholic beverage among younger age groups’.

The purpose of these bills is to bring into force the government’s decision to increase the excise and customs duty on the beverages commonly known as ready-to-drink beverages or alcopops. On 27 April 2008, the excise rate on such beverages was increased from $39.36 to $66.67 per litre of alcohol content. The bills will obviously reverse the Liberals’ decision in 2000 to give alcopops a tax break.

During the recent inquiry into RTDs, the Australian Institute of Health and Welfare, AIHW, submitted that there is no agreed definition of the term ‘binge drinking’; it can mean either excessive consumption on a single occasion or a prolonged period of drinking. Accordingly, the AIHW preferred the language used in the National Health and Medical Research Council guidelines, which use the terms ‘risky’ and ‘high-risk’ drinking. It would be fair to suggest that no-one could establish a definition of binge drinking as a result of the inquiries.

The increase to the excise and customs duty was duly supported by public health and drug experts on the grounds that it would help to reduce risky drinking among young Australians, reduce their exposure to alcohol and lead to positive health outcomes. Those in opposition to the increase to the excise and customs duty generally came from the alcohol industry, such as the industry representative bodies and producer groups, which tended to favour evidence and views that questioned the effectiveness of price increases in reducing consumption and which highlighted the role of substitution in undermining price-increase approaches to reducing consumption. Some witnesses voiced their support for a form of volumetric tax; however, that is not the purpose of these bills.

The committee was provided with copious amounts of data, and a number of sources of evidence were relied on by submitters and witnesses. In general terms, the sales and consumption data rather than the survey data as the basis for its findings in relation to the inquiry’s terms of reference demonstrate a more reliable source. The basis of this preference was described by Professor Steven Allsop, who appeared before the committee in a private capacity. He said:

… it is universally accepted that sales data are strongly and closely aligned to consumption of alcohol and are preferable to survey data. Survey data … are notoriously flawed in their capacity to accurately account for consumption. Even national surveys with very large sample sizes, like the highly regarded National Drug Strategy Household Survey … account for less than 60 to 70 per cent of alcohol known to be consumed from sales data. … The reason is that there are a number of methodological problems, including the frequently observed phenomenon that people, either in error or deliberately, underestimate their personal alcohol consumption.

The Australian Taxation Office clearance data is the amount of taxable alcohol in beer, spirits and RTDs sold in Australia. Compared to the same period in 2007, the clearance figures for the period May to September 2008 showed a 34.6 per cent decrease in alcopops clearances. A number of witnesses and submitters relied upon the ACNielsen Liquor Services Group data showing the number of standard drinks consumed in May to July for the years 2007 and 2008 by beverage type. That data showed a 26.1 per cent decrease in consumption of RTDs, which is equivalent to 91 million standard drinks; a 1.5 per cent increase in consumption of beer, which is equivalent to 13 million standard drinks; and a 2.6 per cent decrease in consumption of wine, which is equivalent to 21 million standard drinks. The Nielsen figures showed a 2.7 per cent decrease in consumption, which is equivalent to 64 million standard drinks. Mr Strachan, the Chief Executive Officer of the Winemakers Federation of Australia, indicated that the whole of the industry relies on those larger companies which purchase Nielsen and that that is a fairly strong indication that they think it is reliable. In his view, it is the best around and it is highly likely to be reliable.

The budget papers from May 2008 estimated the excise and customs duty increase would deliver an ongoing gain to revenue of $3.1 billion over the forward estimates—notwithstanding that the explanatory memorandum to the bills provided a significantly lower updated estimate of $1.6 billion over the forward estimates. Mr Colin Brown, Manager, Costing and Quantitative Analysis, Department of the Treasury, advised the committee on the assumptions underlying the estimates of forward revenue arising from the measure. Mr Brown noted that, taking into account an initial drop in demand for RTDs, the projections assumed an ‘underlying rate of growth in RTDs’ that accounted for future growth in population and the economy. If senators vote against this bill, not only will the liquor distillers make an enormous amount of money but, in just a few weeks, teenage girls will be back paying pocket money prices for lollywater drinks.

Senator Bernardi, in his contribution to this debate, questioned what would happen to the $290 million in returned excise if these bills were defeated. One member in particular of DSICA is demanding the return of his share of the excise if these bills are defeated. That is an indication that people out there in the industry want their money back should these bills be rejected.

The Alcohol and Other Drugs Council of Australia indicated that there is currently ‘minimal data to either prove or disprove significant substitution effects’. However, it expressed the view that the ATO data did show that, while there was a substitution from RTDs to full-strength spirits, total spirit consumption fell by 334,000 litres of pure alcohol. The ADCA also referred to data provided by ACNielsen ScanTrack showing that, from January to November 2008, there was a 2.3 per cent decrease in the value of the dark RTD market and a 0.2 per cent increase in the value of the light RTD market.

Ms Pezzullo, Director of Access Economics, in her evidence to the committee claimed to have anecdotal evidence from Adam of Sydney, who said:

I’ve got to say that I personally have increased my consumption of sprits as I now buy a bottle of Bourban every couple of days now instead of the 2-3 cans of ‘Woody’ I used to … but now that I have a whole bottle of spirits sitting there, after I’ve had a couple, as long as I’ve got enough coke to get me through, I tend to drink a few more. Yes, it is cheeper, but I know I’m drinking more. I just can’t afford to be buying 4 cans of bourban premix for $20 when I can buy a 700ml bottle of bourban with 2 litres of coke …

You would really have to challenge this evidence on the sole basis of trying to find a liquor outlet that sells a 700-millilitre bottle of bourbon and two litres of coke for $20. Maybe Adam was flying in and out of the country every couple of days and purchasing it duty free.

The Choice website shows that alcopops are very appealing to younger people and contribute to underage and binge drinking. In Choice’s trial, 24 per cent of the 18- to 19-year-olds thought there was no alcohol in the alcopops they tasted. The regulation of alcopops marketing—and of alcohol more generally—does not effectively protect teenagers. Parents need to get involved and keep the lines of communication open.

The committee also became aware of websites on Facebook condoning and encouraging youths, mainly women, to photograph themselves drinking various types of RTDs. Some bloggers went to the length of identifying themselves as young school-age children. In one case, a young girl appeared to be in a school uniform.

Last year the New South Wales Commissioner of Police estimated that ‘something like 70 per cent of every police engagement with a member of the community in the streets of New South Wales has alcohol as a factor’. Surely our police have better things to do than go around to clean up the mess that RTDs generate among the youth in our society.

The Winemakers Federation of Australia conducted a comparison of the long-term compound growth rate of total wine sales with the compound monthly growth rate for the eight months after the tax increase. It concluded that, taking into account normal seasonal trends, there was no evidence of substitution of wine for RTDs. ADCA’s submission, having considered the ATO clearance data as well as the ACNielsen consumption data, concluded the tax increase:

… was designed to specifically reduce consumption of one type of beverage, ready-to-drink spirits. On that measure, the tax reform appears to have been successful.

The National Drug Research Institute noted that the ACNielsen data showed that since the increased tax there had been 43 million fewer standard drinks consumed as RTDs. Associate Professor Anthony Shakeshaft from the National Drug and Alcohol Research Centre commented that the extent of the changes in consumption of RTDs demonstrated the potential for price measures such as tax increases to influence consumption behaviour. All of this evidence clearly shows a reduction in consumption of RTDs firmly in the context of long-term consumption patterns, demonstrating that the 34.6 per cent reduction was even more significant considered in this light. Professor Chikritzhs provided figures which revealed the effect of growth in RTD sales post 2000 on consumption levels of young people. He said:

In 1999, before reductions in tax and in the retail price of RTDs in 2000, RTDs were the preferred beverage of about 23 per cent of 12- to 17-year-old female drinkers. By 2005, after the tax decrease, 48 per cent of young females drank RTDs, while the preference for higher-taxed spirits fell from 42 per cent to 30 per cent. For 12- to 17-year-old males, RTD consumption  increased from 6 per cent  to 14 per cent.

Mr Munro, National Policy Manager of the Australian Drug Foundation, drew attention to ACNielsen data and showed a 38 per cent decrease in sales of vodka based RTDs with more than six per cent alcohol, and described this as a significant result in the context of the stated intent of the tax increase.

We have heard from those opposite of the belief of youths mixing their own spirits with their mixers and leading to an increase in drinking. There has been no evidence of the amount of consumption anywhere that indicates an increase where consumers choose to buy a bottle of spirits and mixers, nor was there any evidence of the amount of mixers purchased when consumers purchase bottled spirits—none whatsoever.

Development of beer and wine based alternatives to RTDs resulted from the introduction of the tax on RTDs. Beverage companies had responded to the increased excise and customs duty by developing so-called ‘malternatives’. The government acted decisively on this and on 25 February 2009, in recognition of malternatives and the potential for similar wine based products to be developed, the government moved amendments to the bills to ensure that such products do not undermine the purpose of the 2008 changes by providing substitutes for alcopops that are not subject to the duty increase and are therefore cheaper.

We heard evidence from the ADCA that excessive consumption, understood as risky and/or high-risk consumption in relation to short- and long-term harm, is prevalent among consumers of alcohol. In particular around 50 per cent of alcohol is consumed at risky or high-risk levels for short-term harm and around 40 per cent of alcohol is consumed at risky or high-risk levels for long-term harm.

Recent changes occurred when, on 6 March 2009, the National Health and Medical Research Council released new guidelines on safe drinking. The new guidelines specify that two standard drinks a day for both men and women and four on one-off occasions is advisable to avoid alcohol related injury or disease. The guidelines emphasise the risks of alcohol consumption for young people, saying that people under the age of 15 should not drink at all and that persons between 15 and 17 years of age should delay drinking as long as possible. These new guidelines provide a lower level of alcohol consumption to avoid alcohol related harms than the previous guidelines, effectively lowering the consumption level that should be classed as risky or high risk.

One would only need to accept a clear understanding that the National Health and Medical Research Council made this change in warnings and guidelines for a sole reason. The reason is clear to most of us—that is, we have a drinking problem in our society, particularly amongst our youth. An industry insider recently told the Age that companies targeted young people by sweetening drinks to mask the taste of alcohol. The insider indicated:

These figures prove that RTDs are consumed by the riskiest drinkers and pose an immediate threat to the health and wellbeing of teenagers around Australia. Some single cans contain almost three standard drinks, which means young people get drunk quickly.

Thousands of teenagers are admitted to hospital after overdosing on alcohol each year. Some suffer permanent brain damage, and some die, yet the industry is increasing the strength of drinks favoured by the youngest binge drinkers.

Many witnesses and submitters, particularly those representing health bodies, endorsed the changes. In particular, Professor Alan Moodie stressed the importance of a comprehensive, long-term, multipronged approach. He said that we should look at some of our past successes in Australia and he referred to tobacco, road trauma, skin cancer or cardiovascular disease as examples of how we have been able to make inroads in those insidious diseases.

Even Dr Rosanna Capolingua, President of the AMA, also expressed support for a comprehensive approach:

We support the alcopops tax in the context of broader measures to address harmful drinking, particularly among young people.

The AMA believes that the positive potential of this tax measure would be significantly strengthened if the government … implemented a multifaceted and substantial strategy of alcohol harm reduction and prevention measures addressing alcohol marketing, advertising, labelling and early intervention.

Even within the industry, DSICA was supportive of the government’s broader preventative health strategy, particularly as it relates to reducing alcohol related harm, stating:

DSICA recognises and commends the Government’s focus on preventative health, and … the creation of the Preventative Health Taskforce.

In conclusion, particularly as a parent of young teenage children, over the years I have been involved firsthand with young children who have been affected as a result of indulging in alcohol and particularly RTDs. We need to try to tidy up this particular issue for our youth. By no means am I a wowser. However, we need to introduce appropriate measures such as in these bills to try to turn the tide on the drinking culture, which is currently getting out of hand. I commend the bills to the chamber.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I rise in this debate tonight on the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 because I know there will be people in the Australian community who are going to read theHansard from tonight or who have heard parts of this debate and who will hear the logic that is being used by government senators, and they will be attracted by the logic which is used by those senators. But I put to the Senate that that logic is very flawed. It is logic which is not followed through in a way which actually demonstrates cause and effect of the kind that this Senate should be identifying and acting on as the basis for its actions, particularly actions that have the effect of imposing taxation on the Australian community to the tune of well over $1½ billion. The logic used by the Labor senators in this debate is along these lines: we have a major problem with the abuse of alcohol in the Australian community; too many people, particularly young people, are using it at excessive levels; and the costs to the broader community are very severe; the government is acting on this problem by imposing a tax on the areas where apparently young people are heavy consumers of particular alcoholic products; therefore, the Senate should support the government’s attempt to attack this problem of excessive drinking by young people, and the government should therefore rely on the support of all parties in the Senate to pass its legislation.

That superficially sounds very attractive, but it hides a multitude of intellectual sins. Firstly, I am certain that nobody in this place would dispute that alcohol is a terrible scourge in the Australian community and that it would be completely wrong to oppose measures that genuinely reduce the abuse of alcohol in our community, particularly by younger Australians. But senators in this place need to go one step further and satisfy themselves that what is being done by the government is actually making a difference to the harmful levels of alcohol consumption by the Australian community and particularly by young Australians.

I concede the evidence does tend to suggest that there may have been some reduction in the total amount of alcohol sold to the Australian community as a result of this tax. But what is not clear and what was not demonstrated by any witness during the Senate Standing Committee on Community Affairs inquiry is that this reduction in alcohol consumption is actually occurring among younger drinkers—or in fact among drinkers of any age—who are presently abusing alcohol. That is the problem which this legislation encounters, legislation which imposes a colossal burden on certain people in the Australian community who consume these products.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Kids.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

The minister at the table says ‘kids’, but we do not know that it is kids.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

We have got a good idea.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

We might assume it is kids, but it is also fair to suppose—because we are dealing with supposition here—that many young people are substituting their alcohol in so-called alcopops with alcohol in free spirits, spirits that they mix themselves; and that the reduction in alcopop consumption is attributable to those older or more mature users of alcopops who have decided that cost is a factor in their consumption and they are moving to other, less expensive drinks. That hypothesis is as equally plausible as the hypothesis which the government has glibly asserted during this debate: the consumption of RTDs is going down; therefore our measure must be working in respect of abuse of alcohol by young people. The evidence simply is not there.

The danger in this scenario is that, while the evidence is not there, we know that at some point somebody is going to obtain evidence about the effect of this tax increase on the consumption levels and abuse of alcohol by younger Australians. And if that evidence, which this side of the chamber was expecting to have been obtained by the government during the last 12 months, does indeed suggest that simply substitution has been occurring and there is no significant improvement in the level of alcohol abuse by younger Australians, then the measure is repudiated, the public policy process whereby we make decisions on these matters is comprehensively undermined and future measures which rely on knee-jerk reaction or gut instinct about what needs to be done will be under a cloud—as perhaps they should be. But we cannot afford to make that mistake when so much is at stake in terms of the tax burden on the Australian people and when we potentially do so much damage to an industry which presently employs thousands of people in the sale of a perfectly legal product; namely, ready-to-drink beverages.

I think what has happened here is that many stakeholders in the community, particularly health stakeholders, have been urging more vigorous action on the part of government to deal with the problem of alcohol abuse for some time. Those people have been heartened by the announcement by the government that it would impose a very heavy level of taxation on a particular part of the alcohol market. Those stakeholders have been stampeded into supporting this measure—despite the lack of evidence before it was imposed that it was going to work and despite the lack of evidence that in the 12 months or so since it has been in operation that it has made any difference in this particular area—and have been prepared to support the measure because they have desperately wanted something to be done for a long time. At last something is being done and they are prepared to support it irrespective of the lack of hard evidence that usually such people in debates on public policy prefer to rely on when supporting or opposing particular measures. That is very sad, because if this measure is not having a positive impact on the level of abuse of alcohol by young people, as we on this side of the chamber believe may well be the case, and that evidence ultimately becomes available, then we will put back the wherewithal for a sensible debate about these sorts of reforms very significantly in the future, and that would be a great pity.

What this government has presented as being very unsatisfactory I think is an almost deceitful approach towards the task of demonstrating the worthiness of its legislation. It introduced the tax almost a year ago. It relied on the capacity of governments to delay the introduction of the legislation underpinning this taxation for almost a year. I think it would be reasonable for people observing this process to have assumed that the reason for the delay was not the heavy nature of the government’s legislative program—I do not need to remind senators that there have been a number of occasions where we have had no business to do in this chamber in certain weeks—but, rather, the government was delaying the introduction of the legislation in order to collect the evidence that this measure was going to deal with the problem that it said was going to be addressed—excuse my assault on the microphone.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

You must be angry.

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

I must be angry, indeed, Senator. That evidence has not been collected. The interval of one year has not been used to produce the case for this legislation. The government has not even gone away to research this issue, to the best of our observation on the Senate inquiry. If we had been assured that there was some long-term research underway by the Australian Institute of Health and Welfare, or something of that kind, we would have been reassured, but it is not there.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It is there!

Gary Humphries (ACT, Liberal Party) Share this | Link to this | Hansard source

It is not there, Minister. We asked. I suggest that, if senators who were not part of the inquiry have any doubt about that, they should read through the last three or four pages of the minority report on this inquiry and see all of the witnesses—the National Drug Research Institute, the AMA, the Alcohol and Other Drugs Council, the Alcohol Education and Rehabilitation Foundation, the Australian Drug Foundation et cetera—who were asked the question: ‘Have you seen any evidence of the positive effect of this legislation on use or abuse levels by young people?’ Every one of them said, ‘No, we have not seen that evidence.’ Without that evidence, it makes it very hard for the Senate to act in a responsible way in supporting legislation of this kind.

As I said before, we have been working on the basis of supposition to some extent. Without that hard evidence I just spoke of, we have been asked to assume that a measure attacking alcohol through taxation must necessarily be an effective one. But I think that it is perfectly possible to suppose a quite different scenario—that is, the young people who are presently abusing or have in the past abused alcohol are simply finding other, cheaper ways to access that alcohol. I had an email from a young man in New South Wales after the tax was first imposed. I think it is worth reading part of that email to the Senate:

I am a 21yo male living in NSW. I voted for Labour in the election, indeed I voted for Maxine McKew in place of former Prime Minister John Howard. I have always considered myself a ‘labour man,’ and it never crossed my mind to vote liberal, indeed I thought I never would. However, the action the Labour Government is taking toward the ‘Alcopops’ is one which I find completely unacceptable, and your opposition to which I can’t help but to support. While I myself do enjoy alcohol, I must stress that the tax increase will not affect me much at all—I never drink RTD’s. I drink wine, beer and if I drink spirits, I mix them myself. So you must ask why it is that I am so opposed to the new legislation, despite my habits indicating that I will be virtually untouched by the new taxation. I find myself completely at a loss as to how it is the Labour Government even concieved such an idea, nevermind thought it was a good one. The logic in itself is almost childish in its application, ‘What drinks are the young binge drinkers drinking? Well the money spent in Marketing seems to indicate that they have a preference for the RTD’s so we should make them more expensive.’ Of course the logic is just as childishly put aside as is demonstrated when I asked my younger sister (she is 17) what her friends would do—’Drink straight spirits or goon (cask wine)’ was the reply. So all the Labour Government is achieving by implementing this law is simply to push young children who wish to drink to do so with drinks that are at least twice as strong as the RTD’s they are wishing to ban?? As I said, I am completely at a loss as to how this was ever supposed to work.

This is not some apparatchik who has written an email to support the case the opposition made; this is a person who has contacted me to demonstrate very logically what young people who presently access alcohol would think about a tax on a particular kind of alcohol. Of course they would migrate to some other kind of alcohol, some other kind of beverage that still allows them access to alcohol—but with all the concomitant dangers that the use of bottles of straight spirits and other mixers present to young users when mixing those alcohol products themselves. That is a perfectly plausible explanation of what young people would do. Young people will stop using alcohol because one particular kind of alcohol is more expensive? I do not think so. I think the evidence will suggest at the end of the day that that is not the case.

Some of the advocates for the government’s legislation who came before the inquiry suggested that this was a good move because it was the first step towards a volumetric approach to alcohol taxation. That sounded good superficially but failed at a rather obvious hurdle: if you were to tax Australian alcohol volumetrically and achieve the same tax take that we now achieve from the taxation of alcohol, we would in fact reduce, not increase, the taxation levels on RTDs. On a volumetric approach, RTDs are overtaxed. You would need to reduce the taxation in order to achieve a volumetric approach, so that argument was spectacularly illogical—unless, of course, you have an argument that we should increase the level of taxation across the board. That model, incidentally, raises many billions more in taxation from alcohol than is the case at the present time. If that is the ambition of the government, I would be pleased to hear it, because I would be surprised if they were prepared to admit that to the Australian community. Perhaps it is their ambition.

The other point that was conceded by most of the witnesses is that a strategy which relies simply on one plank, which is to increase alcohol taxation levels on one particular form of alcohol, suffers from an immediate and obvious problem: it is not part of a concerted, across-the-board attack on alcohol abuse. There needs to be a broad approach not just across different forms of taxation but also with different measures dealing with availability of and access to alcohol, which is in the purview not only of the federal government but also of the state governments and sometimes even of local governments. The lack of that strategic approach was very evident in the comments made by witnesses to the inquiry. This government was not in a position to say, ‘We are working with state governments to look at hotel trading hours, promotions on billboards, advertising in local communities and so on’—or, for that matter, at issues of television advertising of alcohol. None of those things were part of this strategy. There were no measures of that kind that were alluded to except that the government was putting aside about $50 million from its $1.6 billion worth of tax take for some preventive activities—a pathetic token gesture given the enormous amount of money the government is raising, even taking into account that its tax take has approximately halved from what it originally estimated it would be when this measure was first announced at this time last year.

This adds up to a very unsatisfactory package It adds up to a half-cooked chicken, and I do not think the Senate should pass something so un-thought-through into law. I think the Senate has been disregarded and abused by having this legislation brought forward so late in the 12 months that the government had to validate its announced taxation measure from March or April last year. If it had been serious, it would have engaged the Senate on this issue much sooner. It has not done so, very clearly, because it did not have the evidence, it knew it could not produce the evidence and it thought that, the larger the amount collected under this measure, the harder it would be for the Senate to knock it back. I am sorry; I do not think that is a good enough political reason to support legislation which is essentially flawed. I say to the Senate that if evidence can be produced that this legislation in the future will actually reduce the harmful intake of alcohol by young people I would unquestionably be over there, voting with the government to support it. But evidence is not there. Until the evidence is there, I think it is quite irresponsible to expect the Senate to take this sort of measure on trust and to support it. I hope there will be the evidence based approach that we all should live by, particularly when such enormous amounts of public money are being talked about.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

It is always a great pleasure to follow the ever-thoughtful Senator Humphries, one of the great legislators of this chamber. The tax we are debating is yet another example of Labor’s nanny-state approach to governing. The government contends that this legislation, the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009, is intended to reduce binge drinking. I do not accept that contention for one second.

The RTD tax is nothing but a naked tax grab. Even if we give the government the benefit of the doubt, even if we accept their claims at face value, the truth is you cannot solve social ills through a tax. You cannot cure the ills of society through a tax. You cannot change behaviour and you cannot eliminate binge drinking through a blunt tax. If it were possible to do this with binge drinking then it would also be true for obesity, smoking and tooth decay. Through applying the right tax at the effective and appropriate level to the offending cigarettes, foods and beverages, surely we could stop smoking, tooth decay and obesity, as well as binge drinking. But, as every senator in this chamber knows, that is absolute nonsense. The government, or at least its senior members, know this as well as we on this side of the chamber do. Some on the other side of this chamber with a social-engineering heart may have a genuine but wrongly held belief that you can cure social ills through a tax. But the architects of this tax in the other place—Mr Rudd, Mr Swan and Ms Macklin—know better. They are smarter than that. They know that this tax is nothing but a tax grab.

But, as is so often the case, it is much more important for Labor to be seen to be doing something than to actually do something practical. I must say that Labor’s approach to taxation of RTDs reminds me very much of the Victorian government’s approach to binge drinking and alcohol related crime in the city of Melbourne. The state Labor government’s solution to that issue was not to put more police on the beat, was not to have an education campaign and was not to put more public transport on; no, the Victorian state Labor government’s solution was to institute a 2 am lock-in. If you were at a venue—a bar or a nightclub—once 2 am hit you had to stay in. If you left, you could not come back in and you could not go into another venue. You had to stay in. That was the brilliant solution: the 2 am lock-in. That was the nanny state’s solution. Their objective was not to address the problem, which was a law and order issue; their approach was to punish small business and young people, the majority of whom do the right thing. That 2 am lock-in trial went for a few months, but—surprise, surprise—at the end of it the government decided that it had not worked. Such is the case with this particular legislation as well. That sort of approach never works.

When the Rudd government introduced this particular tax grab on premixed alcohol in its first budget, it claimed, as I have said, that it was a measure to address concerns about drinking amongst young people. It claimed that binge drinking had reached epidemic proportions amongst Australians aged 14 to 19 and that only a tax increase on these popular drinks could tackle the looming health problem. I have Mr Swan and Ms Roxon’s media release of 13 May 2008 here—it was quite some time ago, 13 May 2008—which cries:

Binge-drinking is a community-wide problem demanding a community-wide response, and this decision by the Rudd Government is an important part of that response.

Well, was it? Let us see. I must say that the dissenting report of Senator Cormann, Senator Humphries and Senator Birmingham sheds a lot of useful light and provides a lot of good information on this subject and whether that great media release of 13 May last year did fulfil its promise.

The opposition and many in the industry were wary that this tax was not a health measure but, as I said, simply a policy designed to raise revenue. The claim was that a 70 per cent increase in excise on RTDs—a narrow category of alcohol beverage—would help reduce rates of binge drinking amongst Australian youth. That decision, taken nearly a year ago, should be very easy for the government to defend if it has worked. They should be able to point to tangible benefits from the introduction of the tax, such as declining rates of binge drinking and reduced hospital admissions amongst the target group of young drinkers, especially females. But the government have failed to do so. They have been unable to provide any solid evidence to prove that this tax is achieving its objectives. We do not have to go any further than the opposition senators’ minority report to discover that:

The government by its own admission did not even try to get the evidence to demonstrate whether or not the measure had reduced at risk levels of alcohol consumption or alcohol abuse related harm.

In answers extracted from Treasury as a result of an Order of the Senate the Government admitted that beyond the 2007 National Drug Strategy Household Survey (before the measure was introduced) it had:

“not collected any additional national consumption data on the reduction of risky or high risk and/or at risk behaviour since the introduction of the RTD excise increase in April 2008”

They have not collected any additional data. I thought that government senators might actually try to hide this fact in their majority report, but I was actually surprised by their honesty. At 1.195, they write ‘notwithstanding its partial and inconclusive nature’, referring to the partial and inconclusive nature of the evidence.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

That is as bad as it gets from government senators!

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Indeed! And they go on to say at 1.196:

… it was not possible to definitively conclude that this reduction in consumption had resulted in a reduction in levels of risky and high-risk consumption of RTDs by young women, leading to improved health outcomes.

Well, what is the point? If you do not actually have the evidence to prove that the purpose of the tax is being met, what is the point of the tax? Government senators themselves recognise the complete and utter lack of evidence at recommendation 1:

The Committee recommends that the government develop strategies to facilitate the collection and coordination of national public health data to better inform policy approaches to the reduction of alcohol-related harms.

In other words, there is no evidence. That is why the No. 1 recommendation of the government’s own majority report is: ‘We had better set about the task of finding evidence.’ That is quite extraordinary and quite a damning admission.

Further to that, a report by Access Economics found that there has been no meaningful decline in the rates of hospital admissions of people aged from 12 to 24 for alcohol related illnesses. When you look outside the government’s own resources and evidence and you look to independent evidence, you cannot find any there, either. You would think that, if binge drinking were being reduced, one area in which you would see results would be hospital admissions. After all, the government TV campaign focused on teenagers vomiting, suffering from alcohol poisoning, getting in furious and serious fist fights in nightclubs and leaving with blood streaked faces, and falling through glass coffee tables and ending up with multiple severe cuts and wounds. Despite the tax and despite this advertising campaign, those admissions have not budged one bit.

I concede that the sale of RTDs has fallen, but we have no indication of where that fall occurred. Was it among binge drinkers? We do not know. Was it among vulnerable youth? We do not know. Was it among those who are sensible and moderate drinkers? We do not know. From which category has the new legion of full-strength spirit drinkers emerged? If it is from young, vulnerable drinkers, the government policy may have done more harm than good. Bizarrely, the government have made no efforts to measure this. They have not gone to any lengths to analyse the effects of the new tax. They were simply unable to answer senators’ questions on these topics during recent estimates. How can they be confident that this tax is the right approach?

Most health experts advocate an approach to taxing alcohol that directly contradicts the government’s position. That is even though many of those experts appeared before the Senate inquiry to support the government’s measure. Volumetric taxation, where lower concentration of alcohol in a drink attracts a lower excise, would use a graduated level of taxation to discourage consuming products with higher levels of alcohol by volume. The government’s decision to tax premixed drinks, which have similar levels of alcohol concentration to beer, at the same rate as raw spirits creates the bizarre incentive to consume products with higher levels of alcohol by volume. The reality is that the government did not introduce this tax as a health measure. If the health and welfare of young Australians were in the forefront of its mind then it would have introduced volumetric taxation measures. That would have been one approach.

The reality is that the government were looking to raise revenue, pure and simple. This tax was supposed to raise $3.1 billion in extra revenue for the government. It was one of the three major tax hikes in the Rudd government’s first budget. The Rudd government wanted to prove something in that budget to the Australian people. They knew that the Australian people were rightly sceptical about their ability to manage the nation’s finances and keep Australia out of debt—how funny that is now—and they had a plan to send a strong message that they were different from previous Labor governments. They are not so different after all.

They said that they were going to post the biggest budget surplus in recent history, but they did not want to do so with politically painful spending cuts. Because Kevin Rudd ran as an economic conservative in the federal election, they could not get away with personal income tax hikes or company tax hikes. So what did they do? They went for the politically easy tax grab. First they went for luxury cars. No-one was going to put up much of a fight to defend cheaper BMWs or Mercedes imported from overseas. Then they went for the North West Shelf gas project. No-one was going to die in a ditch to defend a big oil company. Lastly, they went for the alcohol industry. We were told that they were simply trying to look after the health of young Australians who were risking their futures by binge drinking on sugar flavoured pre-mixed drinks. They thought that they would tug at the heartstrings so that people would buy it and they would get this tax grab through. The government was simply eyeing the $3.1 billion in tax revenue that the grab could deliver them.

Unfortunately, Labor’s tax grab has had serious consequences for young Australians. It follows logically that raising taxes by type of alcohol will not stop people drinking all types of alcohol. It will just lead them to switch from the newly expensive drinks to the other cheaper alternatives. It is obvious when you think about it. If product A becomes more expensive you will transition to product B, which is cheaper, which has the same effect and which, if you mix it in the right combination, can have the same flavour. It is obvious; it is clear. It is what is called the substitution effect. Anyone with a rudimentary understanding of economics—or even a rudimentary understanding of human nature—would be able to tell you that that was what was going to happen. This tax has done just that: it has led to a major and significant substitution effect.

How do we know this? Well, we can hazard a guess after looking at the figures. Between 1 May 2008 and 31 January 2009, the sale of full-strength spirits increased by 17 per cent. I wonder why that was? As I said, this would not come as a surprise to anyone who knows the first thing about economics. When the price or availability of their desired product changes, consumers substitute the next best thing. For those who drink RTDs—typically a liquor such as vodka mixed with a soft drink like lemonade or raspberry flavoured soda—the choice is easy. They get the now comparatively more affordable full-strength spirits and some soft drink and mix it themselves. It is the obvious thing to do.

But there are serious consequences to this decision. Inexperienced drinkers, unable to easily measure their drinks, may well be pouring these drinks themselves and making concoctions that are far too strong. As a result, they may end up consuming much more alcohol than they intended. This is particularly a risk with the government’s supposed target group of 14- to 19-year-olds. By contrast, premixed alcohol is clearly labelled; you know what you are getting. You can see the alcohol on the side of the bottle or can and you can even measure pretty easily the number of standard drinks you are consuming. It is much easier to monitor the number of drinks that you have had in that situation.

If you are mixing your own, perhaps for the first time, you will have little idea of what you have actually drunk. The massive increase in sales of hip flasks—by 20 per cent according to the alcohol industry—further underscores this point. We do not need to think too hard as to what may be going into those hip flasks or why their sales have increased so dramatically. There is no doubt that, this weekend, teenagers across Australia will be swigging full-strength spirits or spicing up their Diet Cokes from flasks in their back pockets. This is something that I am sure is happening more often than before this tax was introduced. No doubt parents will have to pick up their intoxicated teenage sons and daughters from house parties this weekend. And if their children got drunk because they did not know how to mix their own drinks then many may be able to thank the Rudd government’s RTD tax for the increase in that situation.

The government has totally mishandled the process of this legislative change, which was announced proudly on budget night. It required ratification by both houses by 19 March this year. With just three sitting days to go to validate the decision, the government still has not secured passage of its bill. It leaves the Senate with a short period of time to evaluate the merits of this policy. The government of course has warned that if this bill does not pass the Senate millions of dollars in taxation revenue will have to be handed back to the alcohol industry. They mention this because they are attempting to use this as a threat to bully the Senate into supporting their bill.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

That is another thing that is untrue, of course.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Indeed, it is untrue. But this need not be a problem; it is easily fixed. If the government had sought to consult with this chamber—which they seldom do—before introducing the legislation, perhaps even the potential of that situation could have been avoided. The opposition has recommended that the revenue collected so far from the tax should be focused on the problem the policy was actually designed to address: binge drinking. There is the capacity for the parliament to validate the revenue already collected and there is also the capacity for the parliament to ensure that the money collected—the money which could be validated—is not returned to the industry in the event that this bill is defeated. That is easily done by legislation and most in the industry do not want the money returned. That money can be quarantined and it can be put to the purpose that this legislation was intended to fix—that is, we could put the money towards advertising campaigns and other worthwhile purposes.

The government must take responsibility for this situation. The policy was not a measure designed to address public health concerns. It was simply a tax grab. It risks making binge drinking amongst teenagers more dangerous than before. The legislation is a con and a sham—it always was—and this legislation should be defeated.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

In speaking on the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009, it is a pleasure to follow on from Senators Fifield and Humphries, who have made very strong contributions and presented very clear, relevant and practical information as to why this government measure is a flawed one. That is not to say that the issues that some believe are at the heart of this are not serious, because they are. The impacts of problem drinking are quite serious in our community. They may not necessarily be as widespread as is suggested by some who speak with great rhetorical flourish about the extent of those impacts but there are very real impacts and there are some very real chronic and acute harms that accumulate from the abuse of alcohol.

I acknowledge this as I have seen it firsthand across a range of communities, in my personal circumstances and in my past employment. I heard my friend and South Australian colleague Senator Bernardi put on the record his family background working in the hotel industry and owning and running hotels. I place on the record my professional background, having worked for the Australian Hotels Association and the Winemakers Federation of Australia. In those roles I personally have seen some of the impacts of alcohol abuse. I have been there in pubs and venues to see the types of acute harms that can accumulate when people choose to drink too much. I have travelled to Alice Springs and visited the liquor licensing officials there in a number of the hotels throughout that community. I have seen the perpetual cycle of abuse and it is indeed not only an acute level of abuse—that is, abuse that occurs on the day and the harms that flow from that—but it is also a chronic level of abuse.

But I come back to the word I used before: ‘choice’, meaning that people choose to drink. That does not mean that we should not try to educate them—try to ensure that they understand the harms that can flow from abuse of these products—but we need to understand that there is no simple government measure that will fix it or change it. It is a complex problem. When people do things that in many instances they know have the potential to lead to harm, they are doing so for a whole range of very complex factors that stretch way beyond their hip pockets. Unfortunately, the government’s approach seems to go nowhere beyond their hip pockets. That is the great failing in the approach that is being put forward here by the government.

There is a real issue to try to minimise the harms that flow from alcohol abuse, as from the abuse of all other licit and illicit substances. And those harms require clear, coordinated strategies and sound policies, not simply a one-issue press release taken off the shelf and sent out for want of a good Sunday news story—which, frankly, is where this came from. They actually require government to think a little harder about how it can shift a cultural issue, because that is what this is. It is a cultural issue that runs to personal choice and personal responsibility, and it requires greater policy insight than this government has shown in dealing with this issue to date. In looking at a simple measure like a tax measure, government needs to ask itself a number of questions. What cost is there to the introduction of this tax measure? At whose inconvenience? Who does it harm? In what manner will it be applied? Based on what evidence is it to be applied to ensure that whatever its aims are they will be achieved?

Quite often, for governments, imposing a new tax measure or a tax hike is simply all about raising new revenue. In fact, that is usually—almost 100 per cent of the time—the reason governments adjust taxation upwards. But, even then, they need to question themselves as to the evidence on which they are basing that, because sometimes when you raise taxes you actually end up collecting less revenue. It has been known to occur that you can cripple an economy by raising taxes too far and therefore see less revenue raised. Or, as in this instance, you can predict a certain level of government revenue that might stem from your tax rise and discover some nine months down the track that it is only going to be about half that, at least for the category in question. Those are all questions that this government appears to have failed to ask itself before deciding to drop that great story to the Sunday papers—quietly, on a Saturday, under an embargo—to ensure that it got fabulous headlines about the ‘war on binge drinking’ across the national media one Sunday morning back in April last year.

In considering the alcohol debate we need to consider that there are different types of drinkers. There are those who are responsible drinkers and there are those who suffer from drinking at levels that put themselves at risk of chronic or acute harm. The overwhelming majority of people, though, are responsible drinkers. We see all sorts of statistics presented from time to time to support arguments about what proportion of people are or are not drinking at levels of risk. And we have seen just recently the National Health and Medical Research Council reduce the level for so-called safe consumption to just two standard drinks a day. When it is reduced to that level, a large proportion of Australians—unsurprisingly, I would contest—fall into the at-risk category, because if that is your definition then you will see lots of people pushing that two-drink limit. I suspect that most people in this chamber and most people in any other workplace, if they are being honest, would acknowledge that that is a frequent occurrence, if not in their life then in the lives of those around them. But it is a frequent occurrence that does not lead to any immediate acute harms in 99.9 per cent of instances and, indeed, does not lead to any necessarily long-term chronic harms in the vast majority of instances either. So they are not the ones that you should be targeting.

The ones that quite clearly need to be targeted are a much smaller proportion of the population who drink to great excess. What is that great excess? It seems a little hard to get to the bottom of that when it comes to government policy making. If I refer to the government’s work and the work of the Senate Standing Committee on Community Affairs in its majority report, I see references to binge drinking, to risky drinking and to high-risk drinking. But can I find a definition at all as to who we are trying to target and what volume of consumption enters that risky zone, that binge zone, so that it is worthy of and warrants this punitive type of tax based clampdown? I cannot find it anywhere. The government has launched a war on binge drinking through the Sunday papers, yet it does not seem to know exactly what its target is. I contend that, if a government wants to launch a war, it should know what its target is and it should know what it is aiming to seriously and genuinely achieve.

Today, as Senator Fifield mentioned, is the fourth to last day the government have on which they can deal with this issue. I referred before to this being a Sunday paper announcement back in April last year. This matter was gazetted on 27 April 2008. Here we are with just three more sitting days to go and the government finally bring it to this place for debate. What have they been hiding from? What have they been avoiding? Why haven’t they had the courage to come in here and debate this before? Is it that they were hoping to acquire the evidence? As Senator Cormann and many others have so clearly detailed, they have failed miserably if that was their objective. Indeed, Senator Fifield highlighted that the concluding remarks in the majority report of the community affairs committee inquiry into this bill demonstrated—and this is according to government senators—that the evidence was ‘partial and inconclusive’ and said:

… it was not possible to definitively conclude that this reduction in consumption had resulted in a reduction in levels of risky and high-risk consumption of RTDs …

Well, what have they been waiting for then? Surely, if they have waited since April last year to bring this on, one would have expected the government to have generated some evidence to back up their claims that this measure is one worth pursuing. Instead, we have government senators acknowledging that, basically, there is no evidence; there is no relevant data.

It is backed up, of course, by many of the witnesses who appeared before the Senate inquiry into this matter. I give particular credit to Senator Cormann for his work in the minority report of Liberal senators tabled with the overall report into these bills. Senator Cormann and Senator Colbeck have worked hard to prosecute the argument that this is a flawed tax measure introduced by a government desperate for cash, not the health measure they present it as. Senator Cormann presents in this report, along with Senator Humphries and me, some 10 witnesses—not one, two or three but 10 witnesses—all of whom highlight the paucity of evidence when it comes to the impact of this tax measure.

We have Professor Ian Webster, probably a lifetime worker in the alcohol sector and Chairman of the Alcohol Education and Rehabilitation Foundation—indeed, a foundation that was established from another failed attempt by a government to increase excise. Professor Webster says:

I haven’t seen any evidence which has found a decline in alcohol problems in the community since it was introduced.

He has not seen any evidence, as of course the government senators have not. We have the AMA advocating that ‘data collection to obtain that evidence is required’. They are not the only ones advocating that because, as Senator Fifield again highlighted, it was the first recommendation of the government’s majority report. They have had since April last year to collect the data, but it ends up as the first recommendation of their report. You do have to wonder what they have been doing and, if they cannot present a compelling case today for the passage of this legislation, then the Senate should have serious misgivings about allowing its passage at all.

By focusing on just one alcohol product there is a balloon effect. It is one of those instances where you squeeze at one end and it pops up at the other end. That has been quite evident here. The opposition and others have been saying that this would be the case from day one, from 27 April last year. We have been very consistent on the point that there would be substitution—in some instances potentially from licit substances to illicit substances, but certainly substitution amongst the alcohol categories. Whilst the government was very reluctant, it seemed, to reveal terribly much data at all in response to Senator Cormann’s probing questions, we do have the Australian Taxation Office clearance data which shows a 17 per cent increase in full-strength spirits sales since the alcopops tax hike was whacked on, and a 6.1 per cent increase in beer consumption. So certainly the balloon effect is well and truly at play here. They have tried to squeeze and hold RTD sales, but it has popped out elsewhere. Senator Fifield and Senator Humphries and others made very good contributions outlining the impact of that especially when it comes to full-strength spirits. If you drive up the sales of full-strength spirits, you drive up the risk that goes with that. And that risk is very real. It is the risk that comes with taking home or taking to a party a bottle of spirits containing 20 or 30 standard drinks and usually taking it along with one mixer bottle containing 1.25 or two litres of soft drink to go with it. You know that if the whole lot gets consumed in one hit—

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Where is your evidence for that?

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

My evidence, Senator McLucas, is the ATO clearance data that I just cited, showing a 17 per cent increase in the sale of full-strength spirits. Senator McLucas, if you wish to take that on, I can line up hotelier after hotelier who will tell you what the consumption trend is and what the purchasing trend is. It is one bottle of spirits in one hand and one bottle of soft drink in the other, and that is what they walk away with. There is a serious risk if that is their drinking pattern.

I do not disagree that there are some who abuse every category of alcohol including RTDs, and I said at the beginning that we need to work out serious ways to tackle those issues. But, if you really want to focus on tackling that issue, be careful not to squeeze the balloon and create an even bigger problem elsewhere. That is a serious risk that exists there.

In the short time that is left I wish to touch on one specific issue. The government introduced the RTD alcopops tax and then discovered over the following nine months or so that a whole lot of ‘malternatives’, as they have come to be known, have sprung up. We saw beer based and wine based alcopops appear in the marketplace, so a couple of weeks ago Minister Roxon rushed some changes into the House of Representatives to try to cover off those loopholes. It makes some level of sense to try to cover off those loopholes; it highlights the flaw in the government’s approach. It is a bit like trying to plug holes in a dyke: once you get one, another leak springs up and you are continually trying to catch up with yourself.

But there have been some unintended consequences as a result of the government’s moves to broaden the definition. One of those relates particularly to constituents of mine in South Australia—the Angove Family Winemakers. Angove’s have the licensing rights to produce Stones Ginger Beer in Australia. Ginger beer is not exactly a huge-volume product. It is not a product that I sample on a terribly regular basis, I have to say, but nonetheless it is a very traditional product that has been made since the 1700s. Angove Family Winemakers, a wine business in the Riverland in South Australia that has been producing beverages for seven generations now, decided that it would take on as a family business the Australian licence for Stones Ginger Beer. They had a history of making other Stones products as well in this country.

Unfortunately, they discovered, after no consultation with them or broader consultation around the place, that the government’s changes to the definition of beer shifts Stones Ginger Beer from being taxed as a beer to now being taxed as an RTD. That is very disappointing for them. In making their beer they strove to make sure that it would fit the definition of beer. They wanted to be able to call it a beer, they wanted to be able to market it as a beer and they wanted to make sure that it fitted the right definition. They could have made it from wine based spirit and it would have been taxed less, but they chose not to because they wanted to make the real deal and be authentic about it. Now they are an unfortunate victim of these changes by the government.

I note in the majority report—and I give full credit to Senator Claire Moore, the chair of the committee, for her approach to this issue—that the government has suggested that Treasury will look at this issue. Looking at it will not be good enough. My concluding questions to the government in this speech on the second reading, which I will pursue in the committee stage, are these. Will you move amendments to fix the definition of beer to protect this traditional beer product as the definition of traditional wine products has been fixed? Will you look after this small business, this small niche beer product, just as other niche products in the wine area have been looked after? Will you ensure that your unfair measures that have now been whacked on a small South Australian family business are lifted—at least from them—should you manage to convince the Senate to pass this bill? Though I hope you do not pass this bill, I do urge you as the government to consider this issue. (Time expired)

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I rise to make a contribution to the debate on Customs Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009, which, I must say, has been a long time coming. I recall asking Senator Conroy in this place in question time—I think it was last June—where the legislation was and whether drafting instructions had been made for this piece of legislation. Unfortunately, Senator Conroy did not know. It was quite embarrassing for him that he could not answer the question. It was a topical issue. The government had been telling us ‘to get out of the way and pass the legislation’ and had been goading us in public by saying that we were ruining this massive surplus that they generated, which has now disappeared into a significant deficit I might note. But they were telling us ‘to get out of the way and pass the legislation’. So we thought: ‘Let’s ask where the legislation is.’ Unfortunately, when we asked Senator Conroy, he did not know where it was. We happened to ask him the same question the next day. You would have thought that a minister who was prepared for this debate, having been asked a question and deciding to take it on notice, might have done some preparation and found out where the legislation was and what the drafting instructions were. But, unfortunately for Senator Conroy, he still did not know, which gives a demonstration of the complete disarray that the government has been in with respect to this measure.

It has been poorly conceived, poorly designed and poorly handled all the way through. There has been a continuation of selective quoting of statistics to try to put the government’s perspective. It has been quite dishonest the way that the government has managed this, even from the perspective of the figures that it wanted to quote as to the revenue that would be raised from this measure when it first started. I might note that I do not think the Department of Health and Ageing was even consulted on the calculations of this; it was done between Treasury and Customs. The first figure that came out was about $2 billion. That was the first figure that we were told. Before long, that number had been raised to $3.1 billion that was going to be raised by the measure. At that stage, the industry told us that that was above their projections for the growth in RTDs without the new tax. So, clearly, the government had no idea what it was doing. It had made no consultations as to the effects of the measure that it was proposing and it was just hoping that it got it right.

Close to 12 months on, here we have the legislation. We had asked about it, we had been told the drafting instructions had been issued as far back as June last year, and here we have the process just starting. One thing I can say has been a feature of this whole process over the last 12 months is that I do not think that anyone genuinely believes the government in any of the arguments that it has put up. I know that there are some people who are desperate to believe what the government is saying and there are people out there who have genuine concerns about the impacts of alcohol in our society. I know that that is shared on both sides of the chamber, having been through several Senate inquiries myself and having watched the work of the Senate committee in its most recent inquiry. There are people who are desperate to have this issue dealt with in a genuine way by the government, and they were over the moon that their issue had been recognised. That was their perspective.

I went to the drug and alcohol awards in Melbourne one Friday night last year because, as the then shadow parliamentary secretary for health, I considered that it was one of my responsibilities to attend a function of that nature but also, with children in the demographic that this measure was supposedly targeted at, I was interested in talking to the representatives who were there. I might note that this was one of Kevin Rudd’s beachhead issues and this was one of the big deals that he was running with through the election campaign. It obviously showed through in their polling and the focus group work. It was one of those beachhead issues, and he was going to declare war on binge drinking. Despite all that, nobody from the health portfolio of the government was in attendance. They sent a separate parliamentary secretary. I think Mr Shorten was the parliamentary secretary who attended and who took great delight in getting up on the stage to make presentations at one stage in the evening and telling the opposition ‘to get out of the government’s way and pass the legislation’. Poor old Mr Shorten did not know that the legislation had not been prepared yet. He was concerned that we were standing in the way of a tax measure. There is no doubt that this was dreamt up in Kevin Rudd’s office as a tax measure. They needed money, they knew they needed money, they were saying that they were going to cut spending but in effect what they did was put in a huge tax slug at the last election and this was part of it.

They tried to dress it up as a health measure. But, as I said, nobody believes them. My local paper said at the time, ‘Mr Rudd, this policy is plain wrong.’ They put that on the front page of their newspaper. What did they say back in May last year? ‘Our kids turned to the hard stuff.’ We have heard previous speakers tell us that that is what is happening—there is a significant increase in the sales of full-strength spirits. The government tried to play that down. They tried to, again, selectively quote figures to say that the combined sale of RTDs and spirits is down—and it probably is. But they took no account of substitution when they put their figures together. They did not even look at that. That was not part of the process that they considered. Again, it demonstrates how poorly this whole issue has been handled right from day one. As I said, it has been poorly conceived, poorly designed and most certainly poorly handled.

The government, at the time of announcing this measure, promised to spend a large slice of the revenue on a new national health preventative program. The revenue was then estimated to be $2 billion over three or four years. As we have already discussed, the figure has gone up as far as $3.1 billion and now is down to $1.6 billion after a year of getting some real data and doing some real work on how this process might work. A large slice of the extra revenue raised by the higher excise was to be poured into a new national health preventative program. We are yet to see the results of that. I would be interested to see what the crossbenches do with respect to this. I know that during our initial Senate inquiries one of their real concerns was to see what the investment by the government into these programs was. Those in that social sector who are concerned about the effect of alcohol want to see what large slice of this excise increase is going to be spent. We have heard nothing of that. That has completely disappeared from the government rhetoric—again, a promise was made as part of the process, but where is it?

They are busily trying to palm off other measures and other spending as being part of this process. They cancelled a program the previous government had in place and rebadged it. It took them until late last year to get their advertising program underway—rebadging about $57 million that came out of the previous government’s advertising budget, which they criticised when they were in opposition. They criticised those advertising programs, but they rebadged them. Then when they brought their advertising out it was not the most effective. It was another group who came out with an advertising program that actually followed the research about the most positive influence on kids who were consuming alcohol—family. Again, the government have put absolutely no resource towards programs that will assist families deal with their drug and alcohol issues. There has been no resource allocated out of this large slice that they promised of the $2 billion or $3.1 billion or $1.6 billion. There has been no contribution.

It was the ‘Children See Children Do’ alcohol advertisements on television that were the most effective. They are great ads. The father at the barbecue asks the young son to go and get him a beer from the fridge. As the son comes back from the fridge to the barbecue he morphs into a father who asks his young son. It is a very powerful message. Yes, we have a significant cultural issue with alcohol in this country. I do not think there is anyone on any side of the debate who would disagree with that.

During my time on the Senate inquiry it was a pleasure to work with members across all parties. This issue has been dealt with very seriously and very genuinely. There were doubts expressed all the way through about this measure. It is quite interesting to note that there is no definitive evidence presented in the government report to say that this measure has been effective. Yet the dissenting report demonstrates that witness after witness stated that there is absolutely no evidence that this measure has had an impact on harmful drinking—something that the government members would not, or perhaps could not, put into their report.

It is really a pity that the government have taken the approach that they have on this. I said before that there has been a process of selectively quoting statistics. We saw that with the figures on young girls who had a preference for use of RTDs. The government quoted figures—I think it was from 14 per cent up to 67 per cent—for the growth. They did not mention that it had gone past that and come back. They just quoted the gross numbers. They did not say that the number of young girls in the age group they were talking about who were drinking had reduced. Even though it was slight, there had been a reduction. They picked the most emotive, the most selective, statistics and gave them to their backbenchers to come in here and parrot out in their presentations, to dutifully speak off their speaking notes and selectively quote statistics provided by the minister’s office. And yet those who have been to the committee hearings, listened to the evidence and been bombarded with the statistics from all sides—those who have been through that process—know that what the government have been trying to tell us through this debate and the selective quoting of statistics is not right. That is why nobody believes them.

As I have said, there are people who desperately want to believe them, because there are people who are desperately passionate about this issue. Anyone who has seen their kids or other kids in a really sick state through the consumption of alcohol would be passionate about this. But the government has not made a case for the parliament to pass this legislation. If you look at the other minority reports, they continue to have doubts about the veracity of this measure.

In fact, in my local paper there was even a report about the government’s youth delegates to the United Nations. These two young people had travelled all over Australia. They had been all over the country. And one of the issues that they were taking to the UN, to represent this country, was how ridiculous this measure was and how it would not be effective. The kids know. They know how to effectively get around this measure. And I am sure that in time, when the government actually decide to release the figures properly, we will see that. I recall seeing an answer to a question on notice given to Senator Cormann that this information is not in the public domain. The government actually tried to suppress the real data as a part of this process so that they could continue to run their selective arguments in the media and pretend that this was a measure that was going to work.

As we have seen through the committee reports—three inquiries now—there is no evidence that this will work. The government did not take into account issues such as the transfer effect. I think Senator Birmingham’s balloon analogy puts it perfectly: if you squeeze a balloon in one area, it is going to pop out in another area. It is quite clear that there is a redistribution in the consumption of alcohol. I can tell you, I have seen it among the young people that I know. They have moved from RTDs to wine and back to beer. They will find a way. They know what their budgets are and they will find a way to get around it. Most disturbingly was the suggestion by one young person I know that, if the government keep this up, there is an easy way out: ‘For 30 bucks I can get a pill’—probably less, for all I know, but that was the comment that was made to me—‘It’s cheaper, it’ll last longer and I don’t have to worry about all the hangover in the morning.’ That was the most frightening—

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

You be very careful there.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

I am being very careful, Senator. But that was a comment that was made to me by a young person in respect of your measure.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Well, don’t prosecute it in here.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

They said to me, ‘We’re not stupid; we know how to deal with this.’ And it worried the hell out of me, I can promise you, because that is the last thing I would want to see. That is why I want to see this measure dealt with properly by the government—not with dishonest numbers, not with selective quoting of figures like you have done over the last 12 months, not with a completely dishonest approach to this legislation. Don’t come in here telling me you have been genuine about this—it was a tax measure dressed up as a health measure!

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

They didn’t even talk to the health department.

Richard Colbeck (Tasmania, Liberal Party, Shadow Parliamentary Secretary for Agriculture, Fisheries and Forestry) Share this | Link to this | Hansard source

They didn’t even talk to the health department when it was being designed. You cannot come in here and tell me that this was a genuine process. As I said at the outset, this was poorly conceived, it was poorly designed and it is most assuredly being poorly handled—and the Senate should not pass this legislation.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

On 26 April 2008 the excise and customs tariff proposals were published to increase the rate of excise and excise equivalent customs duty applying to other excisable beverages not exceeding 10 per cent by volume of alcohol from $39.36 to $66.67 per litre of alcohol content. The measure has resulted from government concerns at the growth in consumption of alcoholic beverages known as alcopops. As senators are aware, this measure reverses a serious mistake made by the Liberal and National parties in 2000. It is backed by research, it is backed by the health experts, it is backed by the evidence—and, can I say, it is backed by the community.

To ensure that products do not enter the market that undermine these changes, the bill will also alter the taxation definition of ‘beer’ in the Excise Tariff Act 1921 and ‘beer’ and ‘wine’ in the Customs Tariff Act 1995. Changes to the definition of wine in A New Tax System (Wine Equalisation Tax) Regulations 2000 will follow as part of these changes.

The increase in the rate applying to alcopops reflects the government’s concern at the growth in alcopops consumption, alongside their appeal to young and underage drinkers and the role that they play in encouraging binge drinking. Many of these drinks are colourful; they are sweet and sugary. They are designed to make the step between soft drinks and alcohol easy. They are L-plate cocktails. Many alcopops, particularly the white spirit based drinks, disguise the taste of alcohol with their sweet flavour. According to the National Drug and Alcohol Research Centre taste perceptions study they expose young and inexperienced drinkers to higher than normal risks because they are more likely to make false judgments about the product they are consuming. As Professor Tanya Chikritzhs said to the Senate inquiry last week:

… not all beverages are equal in the amount of harm they are likely to be associated with.

That is why the government is concerned about alcopops over other forms of alcohol and with fixing the loophole that was created by the Liberals back in 2000. The very nature of alcopops makes them more harmful to vulnerable young and underage drinkers, the very people who are targeted through the advertising on Facebook and magazines directed at young people and children. No-one who reads the newspaper or watches television can be unaware of the problems caused by binge drinking. Community leaders, police and health experts alike agree that action needs to be taken. In any given week approximately one in 10 12- to 17-year-olds are binge drinking or drinking at risky levels. Almost 20,000 girls aged 12 to 15 drink daily or weekly. The number of women aged 18 to 24 being admitted to hospitals because of alcohol has doubled in eight years.

Risky drinking is a common cause of violence. Almost 500,000 young people aged 14 to 19 years were physically abused in alcohol related incidents in 2007. In 2004-05, the social cost of alcohol misuse in Australia was estimated to be approximately $15.3 billion. For young people, RTDs are a big part of the binge drinking problem. Between 2000 and 2004, the percentage of female drinkers aged 15 to 17 who consumed alcopops at their last drinking occasion increased from 14 per cent to 62 per cent. For females drinking at high-risk levels in 2004, 78 per cent drank alcopops at their last drinking occasion. That figure had increased from 21 per cent in 2000.

Julian McGauran (Victoria, National Party) Share this | Link to this | Hansard source

What is this? The temperance movement!

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

You might think it is funny, Senator. This is the data which your side say does not exist. The industry itself admits its sales have grown by 250 per cent since 2000. So the Rudd government has made the entirely sensible decision to reverse the Liberal Party’s mistake. The government’s decision leads to the logical situation that all spirits, whether bottled or premixed, are taxed at the same rate. As a result, the price of most alcopops has increased. Research shows that price increases can and will play an important role in tackling binge drinking and that higher prices lead to a reduction in consumption, particularly by young people and underage children.

This bill changes the definition of beer to set a combination of minimum limits on bitterness and maximum limits on sugar content that must be present in the final beverage. As part of the sugar requirements, artificial sweeteners will not be permitted to be added to beer. Apart from establishing new restrictions on the definition of beer, the government has also taken the opportunity to make changes that encourage innovation in the beer-making process. The changes will allow additional ingredients to be added during the brewing process, including small amounts of alcohol from a non-beer source. These changes are expected to allow domestic brewers to better compete with international brewers by providing opportunities to produce new beer flavours within the overall new limits concerning bitterness and sugar content.

The changes will only affect grape wine products and not other forms of wine. The category known as ‘grape wine products’ currently includes wine cocktails, flavoured wines and Irish style cream drinks, including wine creams. With a combination of flavourings or ingredients, a grape wine product could be produced to resemble a spirit based RTD product. The new definition will preclude the addition at any time of the flavour of an alcoholic beverage other than wine whether the flavour is natural or artificial and whether or not the flavour contains alcohol. For example, the addition of a rum flavour or a number of flavours that combine to produce a rum flavour would lead to the beverage no longer being classified as wine. Supporting this change, other changes to the definition will act to provide certainty as to the circumstances where alcohol can be added to a grape wine product—that is, alcohol other than grape spirit used in the preparation of the vegetable extract must not add more than one percentage point to the final alcohol strength by volume of the beverage. Without such a limit, additional amounts of alcohol could be added to a grape wine product potentially to provide a spirit flavour. These changes are not designed to have any significant impact on conventional beer and wine products. The government understands from consultations that both the beer and wine industries are supportive of the changes.

Subject to the support of the parliament, the new definitions of beer and wine will apply from 1 July. The 1 July 2009 start date has been chosen to provide sufficient time for industry to be informed of the changes and to make any adjustments. I acknowledge your question, Senator Birmingham. We will deal with that in the committee stage.

The Australian Taxation Office and Customs figures drawn from the first 10 months of this measure show that alcopops sales have dropped by 35 per cent compared to the previous year. This is significant. What is more, it is far beyond our modest predictions. When the measure was first introduced, modelling predicted that—

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

You were predicting it would go up. You are misleading the Senate.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

Do you want to listen or not? When this measure was first introduced, modelling predicted that it would only slow the astronomical growth of alcopops sales, which would have been an achievement in itself. However, as we have heard, the ACNielsen figures—the figures accepted by all parts of the industry—demonstrate a reduction in the overall consumption of alcohol of 124 million standard drinks. That takes into account alcopops, straight spirits, beer and wine. And no-one on the other side is listening because that is the statistic they do not want to hear. They do not want to know that the overall reduction in consumption of alcohol has been by 124 million standard drinks. That is not a bad start. Let me expand on the ATO data. To quote from the Department of the Treasury’s submission to last week’s Senate inquiry:

The clearance data reveals a 34.6 per cent decrease in RTD consumption over the period May 2008 to January 2009, compared with the same period in the previous year. In contrast, solid growth was recorded for this period in each of the previous three years: 12.3 per cent in 2005-06, 8.2 per cent in 2006-07, 10.1 per cent in 2007-08.

So we had year of growth after year of growth for the preceding three years and then we have subsequently seen a reduction by 34.6 per cent.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

What about next year?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It depends on what you do in this place.

Mathias Cormann (WA, Liberal Party, Shadow Parliamentary Secretary for Health Administration) Share this | Link to this | Hansard source

Senator Cormann interjecting—

Steve Hutchins (NSW, Australian Labor Party) Share this | Link to this | Hansard source

Minister, please continue.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

While the clearance data does show an increase in full-strength spirits consumption of 17 per cent—a figure that was quoted by Senator Fifield and Senator Colbeck—they omitted to quote the most important figure. Overall spirit consumption in RTDs combined with full-strength spirits has fallen around 7.9 per cent when compared to the same period in 2007-08. There has been a huge reduction in RTDs; there has been a small increase in straight spirits; but the most important figure is that overall consumption of spirits has reduced by 7.9 per cent—and you are saying the data does not exist.

Opposition Senator:

A 17 per cent increase?

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

I will say it again.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

Yes, say it again—

The Acting Deputy President:

Through the chair, Minister.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

There was a 34.6 per cent decrease in RTDs, a 17 per cent growth in full-strength spirits but—

Opposition Senator:

That is what I said—17 per cent.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

But the most important figure that you will just refuse to hear is that the total consumption of spirits has fallen by 7.9 per cent. Surely that is success.

Simon Birmingham (SA, Liberal Party) Share this | Link to this | Hansard source

While beer has gone up by six per cent.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

It hasn’t. Over the same period there was an increase—sorry—in beer consumption by 6.1 per cent. However, since the increase in the rate of excise of RTDs, the growth in excisable alcohol consumption of beer, spirits and RTDs has slowed. The ATO clearance figures show that the growth in excisable alcohol weakened by 0.1 per cent—

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

The growth is slowing.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

in the period May 2008—keep listening—to January 2009 compared with the same period the year before. In contrast, solid growth was recorded for this period in each of the previous three years—very important figures coming up, Senator Fifield—6.6 per cent in 2005-06; two per cent in 2006-07; and 2.7 per cent in 2007-08. Once again, the figures support the position that the government is taking—this tax is working. The ATO said:

Excise clearance data does not include wine. Wine is not subject to excise duty, and similar volume data therefore is not available from the WET tax regime. However, it is noted that a recent article in the Medical Journal of Australia reported that the consumption of standard drinks in the form of wine in the period May to July 2008 fell by 2.6 per cent compared to the same period in 2007. This contributed to a fall in total standard drinks consumed in this period compared to the same period in 2007.

The Senate needs to remember that this is not the only thing that our government is doing to reduce binge drinking. Back in March last year we announced the National Binge Drinking Strategy, a strategy that has several parts. We are working with individuals through an early intervention program; we are working with local communities through the Good Sports program and through the community level initiatives; and we are talking to the whole community through the ‘Don’t turn a night out into a nightmare’ advertising campaign. But that is not all.

Mitch Fifield (Victoria, Liberal Party, Shadow Parliamentary Secretary for Disabilities, Carers and the Voluntary Sector) Share this | Link to this | Hansard source

But wait.

Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Link to this | Hansard source

That’s right—but wait: this is a comprehensive plan. We are also working with state and territory governments through the Ministerial Council on Drug Strategy on a range of measures that look more broadly at binge drinking: advertising, liquor licensing and secondary supply amongst them. Last week Minister Roxon announced $872 million of preventative health strategies—Senator Colbeck seems to have missed that happening. That is all aside from the work of the Preventative Health Taskforce, the task force that will be making its report and recommendations to the government in June this year.

The health sector is very pleased with the refocus of the government on that part of the alcohol and other drugs sector that causes the most harm to our community. We do have a comprehensive plan in order to change the culture, as Senator Fielding said and I think Senator Birmingham said. We do need to change the culture around inappropriate use of alcohol in this country, and our government is trying to do something about it. By contrast, the previous government did not engage at all in trying to deal with inappropriate use of alcohol. We are now dealing with the results of that inaction.

The alcopops measure will raise $1.6 billion from 27 April 2008 over the forward estimates—somewhat less than the original estimate at the time of the last budget but a clear indication that the measure is working. There is a lot of debate about which figures mean the most and whether there is a clear indication that the measure is working, but can I say that public health measures do take some time to demonstrate effect. We did not put up the tax on cigarettes and have a 10 per cent decrease in smoking overnight. The health experts have all recognised this fact, a fact somewhat missed by those people during the Senate inquiry. Professor Chikritzhs of the National Drug Research Institute recognised that there was no quantifiable evidence at this stage but said—and this is very important:

… various surveys, such as the secondary schools survey and the National Drugs Strategy health survey, [identify] which part of the population prefers to drink RTDs, or alcopops. We know that in the 14- to 17-year-old age group who drinks at risky, high-risk levels for short-term harm, 70 to 80 per cent of that consumption is done via RTDs, or alcopops … We could make an educated guess—

and can I say this is a very educated woman, saying that young people drinking at risky levels—

would be the most likely to be affected by this RTD tax.

We know that it is young people who are drinking large amounts of them. We also know that young people, but particularly underage drinkers, are extremely price sensitive. Professor Chikritzhs gets it. It is astonishing that those on the other side do not.

The coalition senators are therefore saying that the do-nothing approach is the way to go. For the 15- to 17-year-old girls, of which 62 per cent are now drinking alcopops compared to 14 per cent in 2000, that is not good enough for me. For having twice as many young women presenting at hospitals than eight years ago, doing nothing is not good enough for me. And for Senator Birmingham to say that this is a question of choice is not good enough for me because I do not have a choice as a taxpayer to pick up the bill for the health costs for inappropriate use of alcohol, and neither do I have a choice to pick up the bill for the harm and the effects on policing that all our states and territories are now dealing with.

I am amazed that any senator could not vote for this bill. The government’s action on alcopops is working. It may not be working for the distillers or their representatives in this place, the Liberal and National parties, but it is working. The AMA, the Public Health Association of Australia, the Alcohol and Other Drugs Council of Australia, the Royal Australasian College of Physicians, the Australian National Council on Drugs, as well as the experts commissioned by the Howard government, all backed this measure. And so do the Australian public. The Australian Cancer Council surveyed Australians earlier this year, finding 57 per cent support the tax irrespective of where the money goes, but that moves to 84 per cent if the money is being used on public health measures.

This is a strong piece of legislation, it is backed by research, it is backed by the health experts, it is backed by the evidence and, most importantly, it is backed by the community. It will enable us to make significant investments in prevention and in tackling alcohol abuse and, therefore, should be supported.

Question put:

That the amendment (Senator Cormann’s) be agreed to.