Alcopops Tax

Mr HAWKE (Mitchell) (11.11 am)—It is a privilege to rise today to oppose this bill.  Let us be clear here today about what this government is seeking the parliament’s permission to do.


The government is asking the parliament to validate a tariff—a new tax, an excise, whatever you want to call it—when we know clearly that the intentions of this measure have been a total and utter failure. We know that this is a complete policy failure. We have had member after member on the government benches tell us today that this is all about the health of the Australian community, that these bills are somehow tied integrally to the health of Australians, to the consumption levels of alcohol and to health outcomes that the government is seeking to change or alter. But what is really going on is that this government is seeking to increase the excise, the tax, collected on one category of alcohol—ready-to-drink beverages.




Those opposite contend that by increasing tax on one category of alcohol they will effectively reduce alcohol consumption in our society. Of course, we know that that is an absolute and utter farce of a contention. We know that that objective will not be achieved through these measures. In fact, all of the evidence that is presented to us by anybody who exists out there in the real world—the people who drink in the pubs, the people who deal with the youths who have consumed too much alcohol on a regular basis—corresponds with what commonsense tells us about these measures. It tells us that young people, when faced with a choice between a newly high-taxed, expensive alcoholic product and a cheaper alcoholic product, will simply move from consuming the newly taxed product to the cheaper product. It is simple consumer behaviour.


Once again, this provides me with an opportunity to lecture this government and Labor Party members with a simple lesson in economics and the free market, which I know they are now suddenly very opposed to. When you tax one product heavily, you will decrease the consumption of that product. I have no doubt that they have examples and evidence of the decrease in the consumption of ready-to-drink beverages. But we have seen an increase in the consumption of spirits—straight spirits. We have seen an increase in the consumption of other forms of alcohol—beer and cheap wine.


Mr Deputy Speaker, if you were the person in this country responsible for the marketing of hipflasks, how would you come up with a policy that would dramatically increase the sale of hip flasks in Australia? With the best will between us in this place we would not find a way to increase the sale of hipflasks quite dramatically but under this government we have seen a soaring in the level of hipflask sales. That distortion that has been created by these measures, which seek to tax one category of alcohol with no regard for the consequences. If this is a genuine health measure, there are many questions that need to be asked. Why would we validate a measure that is not achieving health outcomes?


Many of the members opposite in their speeches recently have focused on the taste of ready-to-drink drinks as if that is somehow some sort of compelling argument for us to validate an excise measure— whether the drinks are sweet or whether the drinks are sour. They seem to be obsessed with sweet-tasting drinks. Somehow we should tax sweetness as if it is bad and allow sour drinks because that is somehow going to bring about a better outcome. This is the level of debate that we are subjected to in this place. We understand on this side that this is purely a tax grab. This is purely a way of raising revenue. It is not designed to achieve a particular health outcome and, if members opposite want to stand on the fact that this is a health measure, then they had better acknowledge that this is not going to achieve in the real world the very benchmarks that they have set up for policy success in this area.


A question must be asked in relation to these bills: what is happening to the money that is being collected— allegedly for health measures, as Minister Roxon, the Minister for Health and Ageing has said.  Hundreds of millions of dollars have been collected.  Ironically, this is nowhere near what the government projected. Initially I think it was $3.1 billion across the forward estimates, then $2 billion when the tax hike was first mooted and we now know that it will raise only about $1.6 billion on the forward estimates. Between $220 million and $345 million has already been collected with this tax binge that the government has embarked upon. Has anything between $220 million and $345 million been spent on health measures?


We know that nothing like that has been spent on health measures. We know that the government has not embarked on a new era of attacking binge drinking—of meaningful policy initiatives that have been designed to send binge drinking on a downward spiral. We know they have spent a small amount—$53 million—on advertising and some other minor measures.


When I speak to the bodies that deal with youths who are affected by alcohol in my electorate and in greater Sydney, where I come from, they tell me a couple of things, and it is very important that we take note of the people who are on the ground and are dealing with these issues. If the government is serious about addressing binge drinking, it will have an ally in the opposition because we also seek to address the very serious problem of binge drinking, especially amongst our youth. But when the charities and the voluntary sector ask: ‘Are you discouraged? Have you stopped drinking because of the increase in your favourite ready-to-drink mix?’ the young people they talk to— the people who are affected—say: ‘Of course we haven’t. Of course we’re now drinking either straight spirits,’ or ‘We have moved to wine or beer.’ Interestingly, the feedback that I have received is that they simply turn the advertisements down when they are watching the television. They do not listen to them.


Clearly, though the $53 million the government has already pumped so far into this has not achieved its objective, we know that alcohol consumption levels and hospitalisations have continued to increase since these measures for alcohol related matters were introduced.


We know that every benchmark the minister and the government have set for the success of this policy is an abject and utter failure except for the collection of revenue. But I should also correct myself there. They thought they would collect $3 billion in the budget—$2 billion across the forward estimates—but we now know they will collect revenue of only $1.6 billion. It has been a failure not only as a health initiative but also

as a tax initiative, and we understand that this is primarily a tax initiative.


You can go further afield and examine the attitudes of young Australians as to whether the government’s measures are doing what they set out to do. You can go onto Facebook and have a look at the serious and mounting opposition that comes from the young people who use that medium. It is young people primarily who are scattered across there. There is a group on Facebook called Aussies Against the Alcopop Tax Increase.


It has more than 72,000 members now. Having run some Facebook sites, which I have on very important issues in north-west Sydney—including building a metro line—and having had those established for a year or more and having 1,000 members or so, I know that getting to 72,000 members is a very significant achievement. The people who have put together this group say to me they are overwhelmed with young people who are concerned about paying more for their favourite category of alcohol. That is not an indication that people want to continue to binge drink—we know that most people, most of society, behave responsibly with alcohol; most people can do the right thing in relation to drinking—but it tells us is that young people are awake to what the government is doing here. It is not seeking to genuinely lower the rates of alcohol consumption. Imagine if the government proposed a tax on beer.


Why did they not propose a tax on beer if they were looking to lower alcohol consumption in Australia? We know that ready-to-drink drinks is a niche category. We know that it is not as common as beer and we know that, if the government proposed a tax on beer, they would face a serious and substantial backlash—as they should—from the Australian community.


I think the member for Dickson’s suggestion in relation to what should be done with this revenue that has already been collected—the $220 million to $345 million—is a good one. He is suggesting that, if this government is serious, all of that revenue ought not to go back to the companies that it has been taken from. The member for Shortland is quite wrong in saying that we are directed by the distillery council.


The opposition have proposed that that money be spent on more initiatives and better initiatives and, indeed, be given to the sector that needs it the most—that is, the sector that deals with people who have alcohol problems and the effects of the consumption of too much alcohol. If that money were spent in that way, that would be a meaningful outcome of these measures. But we know that this government is not looking to spend that money in this area; it wants to create this wedge, this dynamic of, ‘Well, the money will go back to the industry and therefore the parliament must pass this measure.’ We know that is a furphy. We can put in place legislation here that can send that money to where it is needed most, and if the government is serious about health measures then that is where that money should be spent.


If this government went into our community and said, ‘We’re imposing a new excise on one category of alcohol, and the purpose of that excise is the health of people suffering from alcohol abuse,’ and that were the government’s position—that it was the truth and that that is what that money was collected for—then that is what the money should be spent on. No government ought to have the right to single out an industry sector—to single out people—and to tax them unfairly in a way that does not produce the effect intended and does not result in the money ever being spent in the way it was intended. That has been tried before many times in the past. In fact, in Boston many years ago, people reacted to the unfair taxes that were imposed on particular categories of goods. Indeed, every industry sector in Australia ought to watch this issue very care fully. They ought to look at the government and think, ‘Our industry sector could be next.’ If the government is willing to single out one sector of an industry and heavily tax it with no real outcome, where clearly its objectives are not being met, then any industry sector could be the subject of the government’s next delight in or passion for taxation.


Indeed, we are facing one of the most serious economic circumstances of our time. We have heard that consumption is vital to our recovery. We have heard that handouts of cash to everybody to continue to spend are the order of the day and that they will somehow save us. Yet this government, at the same time it is giving, is seeking to take in the form of new taxes. It is seeking to take money out of the economy by taxing

alcohol, it is seeking to take $250 from every student and it is seeking to tax more than it did before. That, I think, gives the lie to the idea that somehow consumption is our way out of economic problems.


If you look at some of the data that has been collected, you will see it provides us with a snapshot of what people are thinking about these measures. A Galaxy survey was conducted, asking Australians whether they thought the tax on ready-to-drink products was effective or whether it should be scrapped. It produced the following results. Only 12 per cent of people came forward and said, ‘We think this tax is effective; we

think it will do what the government says it will do.’


Seventy-eight per cent thought it was ineffective. Does this pass the common-sense test? If you went into a pub and were told: ‘Here’s your 20 categories of alcohol that you can buy over the bar; we as a government are going to increase the tax on this one by 70 per cent, but we’re going to leave the taxation treatment the same on all of these other categories, and therefore the price on that one category will go through the roof but the price of every single other category of alcohol will stay low,’ what do you think people would do? The common-sense test tells us that they will go for those other forms of alcohol and stop buying the highly taxed product, and that is exactly what is happening. Furthermore, the survey revealed that 77 per cent of people thought the tax should just be scrapped. I think that is a snapshot of community attitudes.


You will not get an argument in this place about the worthiness of tackling binge drinking or have a genuine debate about how we solve the issue of people who have problems with alcohol consumption. We know what these bills are really about; we know they are simply a tax grab for the bottom line of the budget.


Singling out any industry sector for a false purpose is not something that we should ever seek to do. Indeed, that is why I, in particular, and the opposition will be opposing these measures.


We would support sensible measures to reduce binge drinking. I think we ought to listen to the people who know the most about these things. Why haven’t the experts in this field been brought to Canberra to discuss these matters—to discuss what can be done with this revenue and how it can best be spent? I get feedback from the very serious charitable and voluntary organisations in my own electorate. I know that they know how to address these problems. They are already in the field addressing these issues. They are having great success in that field, because that is what they do.  But we are not listening to them; we are listening to a cash-strapped government. We are listening to a group of people who seem to think it is their right to tell people what to do every day of their lives—what to drink, what to eat, how to think and how to feel.


The Minister for Health and Ageing tends to come into this chamber and act as if it is her right to single out an industry sector and tax them heavily for a purpose when it does not achieve that objective. She seems to act as though it is her right when that industry sector are providing a legal product, employing Australians and simply doing what they are allowed to do by our market system. I do not accept that it is her right to single out people for this unfair treatment. If the government is serious about addressing health issues then there are ways of being serious about addressing them, but we have not seen them from this government. What we have seen are purely revenue and taxation measures designed to increase the bottom line of the budget.


Things such as education and law enforcement have been totally overlooked by members from the government benches who have addressed this question. Instead of treating the Distilled Spirits Industry Council as though they are criminals engaging in some form of underhand activity—instead of antagonising and attacking them—why wouldn’t you seek to work with the industry on solving this problem? Of course, we know the government have not taken that approach. 


They have taken the attitude that the industry is against them, that they are against the industry and that the government know best, which I always have a level of scepticism about. The government need to be taking measures on law enforcement, industry involvement, community engagement and rehabilitation. This is clearly a policy failure in what it has set out to do in terms of health, and the maligning of this industry sector is something that I think is unedifying to watch, unnecessary and, indeed, a real stain on government in this country in general. In addressing both of these bills and why we are here today, I think it is also important that we do not overlook the fact that you cannot legislate for common sense. You cannot legislate to stop people from being stupid. You cannot legislate to stop people from binge drinking. All of these things have been tried before in human history, and all of them have failed.


Attempts by government to legislate human behaviour usually end up producing an opposite set of effects or an unintended set of effects. Indeed, as I outlined earlier, if you want a good example of that then the increase in the sale of hipflasks, of straight spirits and of beer and wine is the unintended consequence of this tax and revenue measure. It may have produced a decline in one category which you have taxed—because whatever you tax you create a disincentive to buy—but why tax one category of alcohol and not others? It gives the lie to the stated reason of the government behind this policy measure.


We know that you cannot put a law into place that will stop people from behaving badly, but the reality is that most Australians behave responsibly with alcohol. It is a part of our culture. There are parts of that culture which need addressing. There are serious health implications in relation to the abuse of alcohol, and they do need addressing. We are here to say to the government: if you are genuine about pursuing health initiatives then pursue health initiatives. Do not pursue revenue measures that will not achieve a health objective.