Voodoo tax policy on alcopops
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If only all tax increases were this easy. The Federal Government introduces a surprise tax rise, and actually gets applauded for it. Then again, it’s rare that the impact of a tax is primarily on young women, many of them below voting age, who are being demonised as binge drinkers (cue the usual file footage of semi-conscious teens staggering around, or belting each other). They’re unlikely to get a particularly sympathetic run in the media. Especially when you’ve got heavyweight handwringers like the Alcohol and Other Drugs Council, and the Australian Drug Foundation, cheering the Government on, and it’s only days since the 2020 summit Health stream recommended higher sin taxes. We’ve still yet to see any evidence that binge drinking is now any worse than in the past, when Passion Pop and rum’n’cokes, rather than RTDs, were the chick drinks of choice. But the debate has moved beyond that. The middle-class wowsers, keen to demonstrate their moral superiority, have politicians and the media convinced our yoof are going to hell in an alcohol-laden handcart. Not that either group, for their separate reasons, ever needed much convincing.
So that’s $500m a year in extra revenue for the Government, and the only dispute is over whether the Howard Government should’ve done the same a few years back. Nice work. What’s alarming is that the Government felt compelled to justify the tax rise by declaring that a ”significant proportion” of the revenue would be directed to the new black in health funding, preventative health programs. The concept is called “hypothecation” and it’s on the rise as politicians try to defend unpopular taxes. Apparently - and there’s no evidence to actually demonstrate this - taxation is considered more palatable if the revenue is directed into programs related to the area being taxed. The transport industry and petrolheads have been at it for decades, arguing that more petrol excise should be spent on roads. Road safety campaigners have pushed for revenue raised from traffic infringements to only go to road safety programs. The health sector have been pushing for higher taxes on alcohol for years to fund more health spending, and the idea got another go round at the 2020 summit. But it’s voodoo tax policy. People who want existing taxes redirected to their preferred cause are just like any other rent-seeker or lobby group, except they’re hiding behind some fake notion of fiscal justice. And they never explain what school or hospitals should be closed to cover the reduced funding that, say, more road expenditure would require. Proceeds from the Medicare levy don’t quite stretch to cover the nation’s health budget, for example. And if there’s additional revenue, then all stakeholders should have the opportunity to argue where it would be best spent, not just the nanny-statists determined to stamp out recreational activities they disapprove of. If there’s a case for more spending on preventative health - and there is - then it should be funded from general revenue, not linked to specific taxes. That just reduces spending and policy flexibility for governments and establishes meaningless linkages. And in any event, the people likely to be forking out this additional $500m a year are unlikely to care either way where the money is spent. Download Bernard Keane’s take on the new tax via Crikey Podcasts here |
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15 Comments
Bernard: I wish to apologize for my comments yesterday. For once I disagreed with what you said. However, to have been as offensive as I was is unforgivable.
Hey Chris,
Save yourself some serious cash! Grab a bottle of bacardi and some schweppes lime or raspberry soft drink and mix your own…Add about three teaspoons of sugar to a glass and presto!!
Instant bacardi breezer
…..good luck in your retirement with your investments (:
I think that it was a wise move to increase the tax on these drinks. I do not know why thier introduction was snactioned in the first place. I suspect that it was the free alcohol from producing low strength bear tht mad it possible . To make a drink that is sweet but with a relatively high alcohol content is trap for the young. Good idea Rudd and Swan!
It is appropriate that the tax on ‘alcopops” are increased. Nicola Roxon’s bs swipe at the previous government was a cheap shot and shoud be seen as such. How disingenuous then to seek an ‘excuse’/ hypothecation. It has the smell of ex-Victorian ALP staffers all over it. I do hope this government will amount to more than the cynical pr manipulation characteristic of this Victorian state government
Good thing speed is so cheap … ferris wheels and merry-go-rounds and all that
Tweak, speed was around and cheap long before the popularity of “alcopops”. The only RTD beverages then were cans of UDL which were not full of sugar or caffeine and tasted foul!
The price of ready-to-drink beverages, or ‘‘alcopops’’, will increase from between 30c to $1.30 a can or bottle depending on their alcohol content. It would be a price rise likely to deter young people from consuming such beverages and convert to alcoholic drinks without so much sugar and caffeine and therefore hopefully decrease the resulting abuse of alcohol. I support it Kevin Rudd and Nicola Roxon. They are being sensible without being a “nanny state”. Roxon’s vitriolic swipe at the previous government however was just plain silly. That idiot Mungo MaacCallum had previously denigrated Rudd for highligting the increasing youth alcohol abuse problem. As I said at the time, it was the single most “real” thing Rudd has done since his appointment and he has acted. Good!
To begin with, Brett Naseby: I think you’re missing the point. The brewery companies were exploiting a what was already a large hole left by the previous government, to provide a product that entailed just opening a bottle to have instant gratification. Open 10 bottles and you are smashed, legless, whatever. In case you hadn’t noticed, people are inherently lazy-just look how acceptable it has become to drink beer from a bottle. Something which makes me wish I loved beer just so I could give it up as a protest- Once the kids have to make their own mixtures they’ll start to drink something else.
Certainly, it’s a quick tax by the government. However, if, like me you had lived in the heart of Commercial road’s nightclub district for 10 years you would know how p*ssed the teen-aged market is, night after night plus Sundays. It is time for people to stop all this politically correct cr*p. How about you geniuses coming up with a solution to this problem?
I’ve been cut and pasting on the Slog the full page retail adverts for booze. On some days there are way many. That’s real money. I worked 12 months humping boxes of booze into car boots and it’s cured me of romance about this drug trade -even with the fine wine selection. At 18 I knew my merlot from my sauterne. But what I was really thinking this last 36 hours is internet porn. Teenage, especially girl drinkers are digital natives and the net is to a great extent about easy access to high level porn. That time of life is already alot of pressure learning sexual diplomacy between the genders and then you’ve got this totally unreal fantasy of porn stars completely deflating any subtle romance or mystery. Well you can pretty well bet those teens with raging hormones will be checking out the xxx sites and the pressure amping up in so many ways. Body image, unsafe sex, peer pressure etc - ITS ENOUGH TO DRIVE A KID TO BOOZE do yer reckon old Laurie Oakes? Well he might ask on Sunday 9.
‘Australia is on a bender.The young are drinking more frequently, in greater quantity, and are starting the habit earlier. The heavy increase in drinking in teenage girls is alarming the medical profession.’ Recent evidence? Try Nation Review 10-16 November 1977, kept for the flip side article by Sam Orr, “Across the Western Plains I Shall Chunder”. Sam’s Brown Dog Wine Guide lists Passion Pop under “Best Fighting Wine (Blue Healer class) ahead of other past classics such as Choc Mint Marsala, Cold Duck, Banana Rum and Sip-and-go-Streaking.
This will do for drink abuse what speeding fines had done for speed abuse… precious little. Where is the education in either area? If it costs too much then those who cant afford it will switch drinks or to something even worse. For the rest who will just as easily spend $8 on what was a $7 drink, what difference will it make.
Rob from the Boozewatch team
Bernard, “binge drinking” existed 50 years ago - I was there - but it was not regarded as a problem. Perhaps that was because the legal drinking age was 21 and most did not indulge in serious binge drinking until about 17 but the results were as lethal then as now.
I know it sounds radical, revolutionary even, to suggest to you that the community - and the State is supposed to represent the community - should take some action; “Nanny State” to you perhaps. Unfortunately, the better solution - but not as profitable - would be to legislate a reduction of the alcohol content of ALL drinks - progressively - to something like a quarter of the present level or 2%, whichever is the lower.
Culture change? Yes but to do that we must first change the culture.
Bernard: what a contemptuous piece of garbage you have written. You have sought to stir people up just for the sake of it. I never thought that a Crikey political writer could become so nauseatingly, politically correct. In short, the teen-aged market is in dire trouble. Also, to the writers who want an across the board tax on all all alcohol. Leave we adults who enjoy our drinks be, we are old enough to know when to stop. The youth market doesn’t and will do anything to be seen as being cool.
Once again Bernard: have you no shame? You are so quick to denigrate a problem, how about you fixing it? I will be all ears.
It is plainly obvious this is a revenue raising objectgive NOT to stop binge drinking!
If the PM wants to stop binge drinkign and lower the risks just halve the alchohol content. How simple is that ?
Is this a Howardite hangover? I agree with Bernard that this is demonising teenage girls - in a similar fashion to that preposterous TV show “Ladette to Lady”. And who do you side with - the pissed bogan chicks or the hoity toity wankers trying to re-educate/improve them? Hypothecation means to pledge (money) by law to a specific purpose - it doesn’t refer to raising money for a specific purpose. My prediction is that the excise increase will not reduce consumption, but a significant amount raised by it will still be spent on “harm reduction/prevention” campaigns that don’t work. The result? A meaningless, self contained, self referential loop that makes Kevin look good, increases the workload of public servants and fills the coffers of advertisers. Fair suck of the sauce bottle.