No Evidence RTD Tax Hike Is Working
Coalition Senators Dissenting Report
Coalition Senators pursued this
inquiry to give the Rudd government every opportunity to present the evidence
that the 70% tax increase it applied to a single alcohol product category had
worked to reduce alcohol abuse and related harm.
To many this measure had always
been nothing more than a tax grab, which the government – for obvious political
purposes – had dressed up as a health measure.
Given the measure has now been in
place for nearly a year, the government had every opportunity to present at
least some evidence that it was achieving its objectives. Yet, absolutely no
evidence was provided by either the government or those supporting the tax
increase that it had worked to reduce at risk levels of alcohol consumption or
alcohol abuse related harm.
Furthermore,
this legislation is a move away from what has been put forward by most of the
health groups appearing before the inquiry (and the 'RTD industry'!) as their
preferred approach to alcohol taxation. Those supportive of this measure to
increase taxes on one product category with comparatively lower alcohol
content, while at the same time calling for an approach to alcohol taxation
which would result in lower levels of taxation for RTDs, were unable to explain
that obvious flaw in logic.
One health expert pointed to the
evidence that taxing lower alcohol content beverages at a lower rate was the "most
cost effective strategy the government could introduce" to achieve a reduction in at risk levels of alcohol
consumption[1].
Dr Rosanna Capolingua, National
President of the AMA told the Committee that "the AMA would advocate
volumetric taxing, where the price signal would depend on the alcohol content
of a drink, and that would be across the board"[2]. Most health groups promoted
the view that volumetric taxation of alcohol was where they wanted to go from a
public health perspective. And the reason given was invariably that such a
system would discourage (through financial disincentive) drinking of higher
alcohol content beverages in favour of lower priced, lower alcohol content
beverages, with a shift in popularity towards lower alcohol products reducing
the incidence of alcohol-related harm.
In the
context of statements like those it is difficult to see this legislation as
anything other than a step in the wrong direction from a public health policy
point of view. That is assuming of course that the government's objective was
indeed to reduce at risk levels of alcohol consumption and alcohol abuse
related harm rather than mere revenue raising.
On a matter of process, the
government should be embarrassed that this legislation to validate a tax that
has been in effect for nearly a year is being considered by the Senate with
only four days to go before the final deadline. The government should be
ashamed that straight forward questions submitted to Treasury during the
inquiry, like how much actual revenue has been raised as a result of this
measure to date still remain unanswered.
Budgetary Context of the
'Alcopops Tax'
The 70% increase in the excise on
RTDs (or 'Alcopops') was the single biggest revenue measure in the Rudd Labor
Government's first budget, with an estimated revenue (then) of $3.1 billion.
The 'Alcopops measure' has to be
considered in the budgetary and political context in which it was introduced.
Labor's first budget was a high
taxing high spending budget, with an estimated $15 billion increase in net
spending and an increase in revenue through new tax measures of nearly $20
billion.
The new Labor government had won
the election less than six months earlier as 'economic and fiscal
conservatives' and had not yet rediscovered the 'temporary' deficit.
Labor was intent on demonstrating
that in government it was able to maintain a healthy surplus, at a level
similar to the $22 billion left behind by its predecessors. In order to achieve
that, the staggering increase in net spending had to be masked through a range
of revenue measures, preferably aimed at some (politically) easy targets.
Whether it was this $3.1 billion
tax on Alcopops or the $2.5 billion additional tax grab on the North West Shelf
gas project in Western Australia, the government was no doubt confident that
the political strategy would work. The tax on alcopops could be sold as a
health measure and the tax on the North West Shelf as a tax on big (read rich)
oil and gas businesses.
Who could possibly disagree with
a measure aimed at preventing young people in particular from binge drinking
and alcohol abuse related harm?
If the Government had indeed put
an effective strategy to tackle alcohol abuse and binge drinking on the table,
no doubt there would have been broad support.
But of course it had not.
What did the Rudd government
actually do?
From 27 April 2008, the Government in effect abolished the category 'other excisable beverages not exceeding 10
per cent by volume of alcohol'.
As such RTDs, even though much
lower in alcohol content, have since been taxed at the same rate as full
strength spirits.
In so doing the government
removed the incentive, generally promoted by health groups, to encourage the
consumption of comparatively lower strength alcoholic beverages.
The legislation before the Senate
seeks to validate that decision by Government.
There has been much rhetoric from
the government that this measure is designed to close a 'loophole' created by
the previous government.
The reality, as is quite often
the case under this Labor administration, is very different from the rhetoric.
To make up for the abolition of the 37% wholesale sales tax from 1 July 2000, which applied to beer and other beverages with less than 10% alcohol,
the relevant excise was increased. Given that the alcohol content of RTDs was
comparable to the alcohol content of full strength beers they were taxed at the
same rate. This achieved tax neutrality for substitute products with similar
alcohol content.
The removal of that tax
neutrality by the Rudd Government has resulted in marked increases in the sale
of beers since May 2008 as well as the creation of so called malternatives.
According to the AC Nielsen data, relied on by most health groups appearing
before the inquiry, beer sales have been higher every month compared to the
same month in the previous year except August 2008 (the relevant graph
presenting AC Nielsen data and supplied by the Australian Drug Foundation can
be found further below).
Evidence based policy
development or just political rhetoric?
Coincidentally, the Prime
Minister addressed Commonwealth heads of agencies and members of the senior
executive service in the Great Hall in Parliament House a couple of days after
the Alcopops measure was leaked and came into effect. In what clearly were
unrelated comments the Prime Minister told senior officials that the Government
as part of its agenda for the public service was committed:
"...to ensure a robust, evidence-based policy
making process. Policy design and policy evaluation should be driven by
analysis of all the available options, and not by ideology... the government will
not adopt overseas models uncritically. We're interested in facts, not
fads..."[3]
Coalition Senators identified
very clearly in their dissenting report after the first Senate inquiry into
this measure[4]
that the government had not followed the Prime Ministers advice about
evidence-based policy development on this occasion.
To assess whether a particular
policy measure has or hasn't worked, the first thing needed is an ability to
review the policy targets and performance measures that were set when it was
introduced.
The problem with the increased
tax on RTDs is that the government in introducing the measure did not set any
targets or performance measures[5],
other than the $3.1 billion fiscal target specified in the 2008/09 budget
papers.
Since the measure was first
introduced, the government continues to adjust its objectives and how public
health success is to be assessed. Apparently a temporary reduction in the sale
of RTDs to the whole RTD drinking population now proves success. That is
irrespective of whether it is a reduction among 'at risk' drinkers or
responsible drinkers, and irrespective as to whether the reduction is
sustainable (and expected to be sustained).
The decision to implement a tax
on ready-to-drink beverages was announced in a pre-budget leak on 27 April 2008 (timed for the Sunday papers).
Attributed to ‘a senior
government source’[6],
the leak followed the release of the 2007 National Drug Strategy Household
Survey on 26 April 2008.
The key feature of the leak was
the deliberate effort to present the tax increase as a health measure. At that
point the revenue 'estimate' by the unnamed source was around $2 billion.
A few days later this is what the
Treasurer Wayne Swan told David Speers on Sky News on 30 April 2008:
TREASURER: I can’t comment on budget decisions, that’s for Budget night. I just
make this point about the excise increase on RTDs: that was closing a loophole
that was left open some years ago, and it also relates to teenage binge
drinking. So, it was a very specific initiative for very specific reasons.
SPEERS: But teenagers binge
drink beer and other drinks as well.
TREASURER: I think the evidence is pretty clear from all of the experts that this
measure will have an impact on teenage binge drinking, and it should be seen in
that light, not in the light of revenue.
Another example of the
government's political rhetoric was the Prime Minister's interview with Neil Mitchell
on Radio 3AW, Melbourne, 2 May 2008:
CALLER:
But, these prices are also affecting the prices that adults, that have paid
taxes like myself for 30 years, we’re just an average family, and mixed drinks
like Johnny Walker and cola or Jim Beam
and cola have all gone up.
PM:
Well, we’ve got a real problem when it comes to teenage binge drinking. Talk to
any police commissioner across the country and they’ll tell you that. Difficult
to deal with this. Some of the data we’ve got from the National Household Drugs
Survey says we’ve now got 30-40,000 teenage girls aged 14-19 and 23,000 boys
the same age, consuming alcohol at a level that puts them at high risk of long
term harm. And if you look at what they’re drinking, take girls for example, in
the year 2000, 14 per cent of female drinkers aged 15-17 were reported drinking
these ready to drink drinks — I’ll just finish this one other point — and by
2004, that had increased by 60 per cent. So there is a big linkage between
binge drinking on the one hand and these forms of drinks.
David,
sorry it’s hurting you. It’s a blunt instrument. I understand that. But, we’ve
got a responsibility to act when it comes to young people, and police
commissioners across the country are crying out for action.
However, what were the facts?
What was the evidence about at risk levels of alcohol consumption and alcohol
abuse related harm collected by the Australian Institute of Health and Welfare
(AIHW)?
According to its submission to
the May 2008 Senate inquiry, the AIHW (a more independent point of reference
than either the Prime Minister or the Treasurer), concluded based on the same
evidence regarding alcohol consumption patterns across Australia as per the
2007 National Drug Strategy Household Survey that[7]:
-
The overall drinking status of the Australian population had been
stable over the past two decades;
-
There had been a modest increase in the apparent consumption of
RTD alcohol beverages over the past five years;
-
The preference for RTDs had increased slightly over the period
2001-2007, particularly in older age groups;
-
There had been virtually no change in the pattern of risky
drinking over the period 2001-2007, including among young Australians;
-
The increased availability of RTDs did not appear to have
directly contributed to an increase in risky alcohol consumption;
Critically, in its very extensive
surveys in 2001, 2004 and again in 2007, the Australian Institute of Health and
Welfare identified that the drink of choice for those drinking alcohol at risky
or high risk levels was[8]:
-
full strength beer for males (for all age groups, including 14-19 year
olds);
-
full strength bottled spirits and liqueurs for females (14-29 year
olds);
-
wine for females 30 years and older;
Obviously David Speers from Sky
News was onto something. So much for evidence-based policy development!
The evidence from the AIHW
released the day before the government announced its increased tax on RTDs had
demonstrated that the 2007 results of its National Drug Strategy Household
survey were consistent with those in the previous two surveys. The alcoholic
beverage of choice among those drinking at problem levels had remained the same
in each one of those surveys and they weren't RTDs. But that didn't suit the
government's political strategy so that's not what the Prime Minister and the
Treasurer told the Australian people.
Nearly one year on - where is
the evidence at?
The Government's stated
objectives were to reduce binge drinking, particularly among young people, to
reduce at risk levels of alcohol consumption and alcohol abuse related harm.
The stated objective was not to
reduce overall sales in RTDs (in fact the government's 2008/09 budget estimates
assumed increased sales of RTDs). Nor was it to increase the sale of full
strength spirits by 17% between 1 May 2008 and 31 January 2009. Nor was it to create new loopholes to be exploited by the alcohol industry. Or to raise
$1.5 billion less in revenue than what was presented as the budget estimate to
Parliament in the 2008/09 budget papers.
In relation to the $1.5 billion
reduction in revenue from this measure since it was announced in the budget,
the Rudd government is taking spin to new and unprecedented levels. Incredibly,
Ministers are seeking to make a virtue of the fact that as a result of not
doing their homework properly they have significantly overestimated the revenue
the government would raise from this measure.
The Minister for Health and
Ageing has been arguing with a straight face that the reduction in revenue was
in fact evidence the measure was working because sales had been dropping faster
and further than the government had anticipated.
This is after the government had
refused Opposition requests to release information about how much revenue had
been raised as a result of this tax increase for months. If the significant
downward revisions in revenue forecasts from the increased tax on RTDs were
such good news, why did the government not share it with us earlier? Does
anyone really believe that the government would have sat for months on
'evidence' that its controversial tax slug on RTDs was 'working', and so much
better than expected at that?
Government still expecting
Alcopops sales to grow into the future
The reality is that even with its
revised revenue estimate of $1.6 billion the government continues to expect
sales (and thus consumption) of RTDs to increase in the years ahead. So even by
the government's latest measure of success (reduced sales of RTDs), the
government does not expect its increased tax on RTDs to work. The graph below
out of the MYEFO 2008/09 was provided by Treasury at the end of February 2009
in answer to a question about volume growth rates assumed by Treasury moving
forward. It shows that for the years 2009/10 to 2011/12 the government expects
RTD sales (and consumption) to grow by a compounded 7.8% each year from 2009/10
onwards.
Either this revised estimate is
now accurate and the government's rhetoric about seeking to achieve reduced
sales is just that – rhetoric, or the 7.8% estimated growth for RTD sales is
still exaggerated. If it is the latter then the loss in revenue will be much
more then what has been conceded by the government to this point.
The government's assumption of
increased sales in alcohol products after an initial drop off is of course
consistent with the international evidence, which was widely canvassed in the
first Coalition Senators Dissenting Report last year. There it was noted for
example that total teenage alcohol consumption in Germany increased between
2004 and 2007 after a 2004 tax increase[9].
Since then it has also come to
light that the (then) New Zealand Labor Government considered and rejected an
increased tax on RTDs because "there is no evidence internationally in
support of targeted taxes on RTDs leading to a reduction in alcohol-related
harm" and "overseas experience has shown that where there is a
reduction in RTD consumption, this has led to an increase in the consumption of
other liquor"[10].
Is there any evidence of
reduced consumption among problem drinkers?
The stated objective was to
reduce consumption by those drinking at risky levels and to reduce alcohol
abuse related harm. Is there any evidence that the measure is working given the
government's originally stated objectives?
The short answer is no.
While there is evidence of a
significant drop in sales of RTDs, nobody can say who is drinking less. Is the
responsible consumer drinking less, with the risky drinker substituting RTDs
with full strength spirits? Or is there reduced consumption across the whole
'drinking population'? Nobody knows, because nobody has collected the evidence.
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[11]
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"
Given the public interest in this
tax measure, and given the significant question marks over whether this measure
would be effective this lack of effort by the government is at least
surprising. At worst the government did not want to look for evidence which may
not have fitted within its political (and high taxing, high spending) agenda.
Below is a representative sample
of comments made by witnesses before the inquiry about the question of evidence
whether the increased tax on RTDs had helped achieve a reduction in at risk
levels of alcohol consumption or alcohol abuse related harm:
Professor Tanya
Chikritzhs from the National Drug Research Institute:
Senator CORMANN—You talk about the close correlation between sales
data and consumption data. Are you aware of any evidence, like looking at sales
data that would indicate whether there has been a reduction in sales to risky
drinkers—binge drinkers, people exposed to harm from at-risk levels of
drinking?
Prof. Chikritzhs—Directly answering that question the answer is no.
The sales data that we currently have addresses the overall population, so we
are unable to determine exactly who is not doing the drinking of those RTDs, those
alcopops, anymore.
Senator CORMANN—I am sorry; if I could just pin you down, because I
am running out of time. Very specifically, this measure is a 70 per cent
increase in the tax, in the excise on RTDs. How do we know that in Australia it
has actually achieved a reduction in at-risk levels of binge drinking and
alcohol abuse related harm?
Prof. Chikritzhs—The answer to that question is that we cannot be
certain about who is drinking less and about whether they are in a high risk
group.
Associate
Professor Anthony Shakeshaft from the National
Drug and Alcohol Research Centre at the University of New
South Wales:
Prof. Shakeshaft—... Unfortunately, we just do not have the data that
would tell us whether young people who were going out on Friday and Saturday
nights—whatever it is—and getting really drunk are still doing that and, even
if they are, whether they are doing it on some other type of alcohol.
Dr Rosanna
Capolingua, National President of the AMA
Senator CORMANN—...what I am focused on at this point is evidence that
consumption has reduced among those that the government tells us they were
targeting—binge drinkers, particularly young Australians drinking at risky
levels that are exposed to harm from alcohol abuse. Are you aware of any
evidence about that category of Australians rather than those that are
consuming alcohol, including RTDs, responsibly?
Dr Capolingua—The AMA advocates that data collection to obtain that
evidence is required.
Mr David
Templeman, CEO, Alcohol and Other Drugs Council of Australia
Senator CORMANN—Focussing very specifically on the type of target
group, if I can call it that, such as those Australians dinking at risky or
high risk levels and binge drinkers, are you aware of any evidence that would
demonstrate that there has been a reduction in consumption in those target
groups?
Mr Templeman—No, we are not.
Professor
Ian Webster, Chair, Alcohol Education and Rehabilitation Foundation[12]:
Senator CORMANN—What
evidence are you aware of that the incidence of alcohol abuse and of binge
drinking has reduced as a result and since the introduction of the 70 per cent
tax increase on RTDs?
Prof. Webster—None. I am a physician. I work with people with drug
and alcohol problems. I think it is too early to make a judgment like that. In
any case, I suppose the sorts of problems one sees in service are well-advanced
problems in any case. I have not seen any evidence which has shown a decline in
alcohol problems in the community since it was introduced. It would require
very, very focused and very structured studies to define that. I probably do
not need to elaborate on that, but even just collecting data from the emergency
department.
Mr Geoff
Munro, National Policy Manager, Australian Drug Foundation:
Senator CORMANN—But do you know whether the demand of the proportion
who drink at dangerous levels has reduced as a result of the increase in the
tax on alcopops, and have you got some data for that?
Mr Munro—I do not think anyone has that data because it is
simply too early to have collected it. That data will take some time to
collect. As we have said in our submission, we cannot expect to have definitive
data for some time. As I have tried to point out today, the evidence that we
have so far indicates that alcopops have taken a huge hit—
Senator CORMANN—In
terms of overall sales.
Mr Munro—Yes—and presumably some young people who drink
alcopops will be affected.
Ms Lynne
Pezzullo, Director, Access Economics:
Senator CORMANN—Are
you aware of any evidence that harmful excessive alcohol consumption has
reduced since the introduction of RTDs? You have told us that, in relation to
alcohol related hospital use, there has been no change. But are you aware of
any evidence that there has been a reduction in harm from alcohol related—
Ms Pezzullo—No, we are aware of no evidence of any reduction in
harm.
Mr Hamish
Arthur, National Corporate Affairs Manager for the Australian
Hotels Association:
Senator CORMANN—Mr Arthur, are you aware of any evidence that the
incidence of alcohol abuse or binge drinking has reduced as a result and since
the introduction of the 70 per cent tax hike on RTDs?
Mr Arthur—Not specifically, no. We have not seen a measurable
change. It has only been 11 months since it came in. It goes back to my point
about major cultural change in that we think there are far more effective
measures of bringing about cultural change when it comes to responsible
consumption of alcohol than the tax increase. So the answer to that is no.
Adjunct Professor Michael
Moore, CEO of the Public Health Association:
"There has been a significant debate
over evidence. We like to base our policy as far as possible on evidence...it is
difficult because one of the things that the industry seems to be demanding is
that a causal link be established between a taxation measure and a health
outcome. Whilst you can look at evidence, to then also work towards a causal
link is difficult."
Ms Melanie
WALKER, Health Policy Officer, Public Health Association:
Ms Walker—An important distinction Michael was making in his
comments is that while at this early stage, given that we have had less than a
year of the legislation, it might be difficult to measure outcomes as such in
terms of overall reductions of binge drinking or reductions within particular
age groups, there are some indicators in the data that has been collected in
terms of outputs: reductions in sales.
What about alcohol abuse related
hospital use?
One of the measures identified by
a number of witnesses as a performance measure to assess whether the increased
tax on RTDs had been effective in helping to reduce alcohol abuse related harm
was the analysis of alcohol related hospital use.
Access Economics conducted
analysis on behalf of DSICA of available information on trends in hospital use
– admissions to both public and private hospitals as well as visits to
emergency departments[13].
Its conclusion was that there was "little change to alcohol-related
hospitalisations for young people following the introduction of the new
tax"[14].
The Secretary of the Department
of Health and Ageing went for a stinging and unwarranted attack on the analysis
conducted by Access Economics describing the original report during Senate
Additional Estimates as "one of the shoddiest pieces of work" she had
ever seen[15].
That would seem like very inappropriate and disparaging language from the
Secretary of a major Commonwealth Department. Particularly given Access
Economics evidence that the data had been compiled in the same way as it would
have been if the work had been commissioned by the Department for Health and
Ageing.
Furthermore, the Access Economics
conclusions and the Department of Health and Ageing conclusions about whether
or not the increased tax on RTDs had any effect on alcohol abuse related
hospitalisations so far are very similar (if not the same).
Indeed, in his opening statement
to the inquiry, Mr David Kalisch, Deputy Secretary of the Department of Health
and Ageing had to say this about alcohol abuse related ED presentations[16]:
"The other aspect that I
would also draw to your attention is that anecdotal evidence
we have received from ED
departments suggests that there has been no change to ED
presentations since the change
in the excise." (emphasis
added).
That sounds very similar to the Access Economics
findings indeed.
Are
Australians drinking less?
The answer to that
question is that Australians overall have consumed less alcohol in 2008 then
they have the year before. As previously stated, the AC Nielsen data does not
identify how that reduced consumption is spread across responsible and problem
drinkers.
The AC Nielsen data presented
by the Aust Drug Foundation (ADF) is the most comprehensive and up to date data
on overall packaged alcohol sales in Australia.
This data shows that
the substitution into beer and full strength spirits is now accelerating.
This has resulted in a net increase in total alcohol consumed in both Dec, and Jan (compared to the
previous year). This is consistent with the international experience, for
example in Germany.
According to the AC Nielsen data overall
sales of alcohol were trending down for the first four months of 2008, with May
2008 (the month the RTD tax increase came into effect) the lowest overall
alcohol sales/consumption for the year. Since May it is obvious that the sale
of RTDs has dropped significantly. However it is also obvious that the sale of
beers and spirits has increased. Importantly, the blue line indicating overall
alcohol sales has been persistently trending up ever since May 2008.
As this data compares
every month with the same month in the previous year, seasonal variations can
not be said to be significantly at play.
It is clear that within
eight months, the AC Nielsen data is indicating that overall alcohol sales are higher
than what they were at the same time in the previous year.
The relevant point is
that if there has been no reduction in ED presentations in the first 8-10 months since the tax
increase, then there is no likelihood that there will ever be such a
reduction. This is because total alcohol consumption is now in a net
increase phase (month vs month of the previous year) after the initial net
decrease response.
What
should happen to the revenue collected so far?
Coalition
Senators are of the view that increasing the tax on a single alcohol product
category in isolation is not an effective way to reduce at risk levels of
alcohol consumption and alcohol abuse related harm.
It is the role of the Senate to
examine policy changes such that the increased tax on RTDs, and if it deems
that tax to have been ill-considered, to reject those changes.
However, it is not practical, nor
is it desirable to return all the revenue collected as a result of the
increased tax on RTDs to the distributors of RTD products.
Whilst the current circumstances
are by no means ideal, they are of the governments own making. The Senate can
move to correct this mistake, and there is some historical precedent to draw
from.
During the process of negotiating
A New Tax System through Parliament in 2000 the Howard government
introduced the Excise Tariff Proposal No.2 (2000), which was designed to
offset the repeal of the sales tax legislation on alcoholic beverages.
The legislation enacting the
proposed excise rate – Customs Amendment (Alcoholic Beverages) Bill 2000
– was defeated in the Senate – in part because it was considered that it went
against an election promise not to increase ‘ordinary beer’ taxes by more than
1.9 per cent.
Following negotiations in the
Senate, an agreement was reached with the Australian Democrats for a lower
rate, which was introduced from 4 April 2001 through the Excise Tariff
Amendment Act (No. 1) 2001. As a part of this agreement, the revenue
collected in excess of this lower rate was directed as indicated in the Bills
Digest (pp.2-3)[17]:
Alcohol Education and Rehabilitation Foundation to be
established
On 3 April 2001, in the midst of prolonged debate in
the Senate over the Excise Tariff Amendment Bill (No 1) 2001, the Government
announced it had reached agreement with the Democrats to prospectively reduce
the excise rate on draught beer to no more than a 1.9 per cent increase. The
Democrats agreed to legislation that would validate the excise collected on
draught beer from 1 July 2000 to 3 April 2001, and allocate most of the amount
collected in excess of the new reduced excise rate to establish a new
independent foundation, the Alcohol Education and Rehabilitation Foundation
(the Foundation). Five million dollars from the excise surplus would be
allocated to the Historic Hotels initiative, which provides dollar-for-dollar
grants to preserve historic hotels in regional and country areas which do not
have gaming machines.
According to the Memorandum of Understanding signed by
the Government and the Democrats, the objectives of the Foundation will be to:
-
prevent
alcohol and other licit substance abuse, including petrol sniffing,
particularly among vulnerable population groups such as indigenous Australians
and youth
-
support
evidence-based alcohol and other licit substance abuse treatment,
rehabilitation, research and prevention programs
-
promote
community education encouraging responsible consumption of alcohol and
highlighting the dangers of licit substance abuse
-
provide
funding grants to organisations with appropriate community linkages to deliver
the above-mentioned services on behalf of the Foundation, and
-
promote public
awareness of the work of the Foundation and raise funds from the private sector
for the ongoing work of the Foundation.
This series of events clearly demonstrates
that if it is the will of the Senate, the current impasse of an ineffective tax
not having been validated by the Parliament but been collected by government
for nearly a year can be resolved. That is without the tax collected being
returned to the distributors or retailers of RTDs.
This was confirmed by Ms Christine
Barron, General Manager, Indirect Tax Division, Department of the Treasury:
Senator CORMANN—
...parliament could validate funds collected up until this point and make a
decision as to how those funds ought to be allocated. That would technically be
possible and surely then the government would have to act according to that
instruction—or that legislation and the way it is passed; is that right?
Ms Barron—The
Senate would need to make a request to the House, yes, and if the House agreed
it could come back to the Senate, yes.
Senator CORMANN—If
the parliament as a whole supported that approach, the government would not be
returning funds to alcohol suppliers, they would actually be allocating it
according to the instructions of parliament; is that right?
Ms Barron—Yes,
that is correct, because parliament would have agreed to the increase, yes.
It should also be noted that the
Alcohol Education and Rehabilitation Foundation has funded a series of research
initiatives, including those undertaken by NDARC, NDRI, ADCA, and many other
groups working if the field of substance abuse.
Conclusion
Coalition
Senators were always suspicious that this measure was nothing more than a tax
dressed up as a health measure. The evidence heard during the most recent
inquiry confirmed that.
During
two days of evidence into the tax grab on RTDs not one witness was able to
point to any evidence that it had been successful in reducing alcohol
consumption by binge drinkers or others consuming alcohol at risky levels.
Nobody
was able to point to any evidence that there had been a reduction in alcohol
abuse related harm since the tax increase was implemented last year.
Officials
had to admit that contrary to best practice the Government never put any
performance measures in place to ensure the effectiveness of the increased tax
could be properly assessed from a public health point of view.
Furthermore,
there is clear evidence (acknowledged by Treasury) that there has been
substitution of RTDs with other alcohol products (including more lethal ones). The
trend in the AC Nielsen survey data shows that substitution is increasing, with
levels of overall alcohol sales (and consumption) higher in both December 2008
and January 2009 than the same month in the previous year.
This is
an ad hoc measure, with the Government already scrambling to close a number of
loopholes, when what we need is a comprehensive and strategic approach to the
serious problem of alcohol abuse.
Coalition
Senators recommend that:
-
The increased tax on RTDs not be
supported moving forward;
-
The revenue collected from 27 April 2008 until Royal
Assent of the Bill be validated by the Parliament;
-
That all the revenue collected by the
Federal Government since 27 April 2008 as a result of the increased tax on RTDs
be invested in an alcohol abuse prevention, research, education and treatment
package.
Senator Gary
Humphries
Senator Mathias
Cormann
Senator Simon Birmingham
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