Second Reading Speech
Ms ROXON (Minister for Health and Ageing)I move:
That this bill be now read a second time.
The amendments that I am introducing today seek to confirm in legislation the increase in the excise and excise-equivalent customs duty rate applying from 27 April 2008 to 'other excisable beverages not exceeding 10 per cent by volume of alcohol', commonly referred to as 'alcopops' or 'ready-to-drink beverages' or 'RTDs'.
On 26 April 2008, the government gazetted increases to the rate of excise and excise-equivalent customs duty applying on such beverages from $39.36 to $66.67 per litre of alcohol content. I tabled the excise and customs tariff proposals in the House of Representatives on 13 May 2008.
The Australian Taxation Office and Australian Customs Service have been collecting excise and excise-equivalent customs duty at the higher rate since 27 April 2008.
The amendments that I introduce today seek to confirm in legislation that higher rate of taxation for alcopops.
The amendments set out in the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 will alter the schedule to the Excise Tariff Act 1921 for other excisable beverages not exceeding 10 per cent by volume of alcohol from $39.36 to $66.67 per litre of alcohol content on and from 27 April 2008.
This rate is subject to indexation on a half-yearly basis and is increased in February and August each year.
Full details of the Excise Tariff Amendment (2009 Measures No. I) Bill 2009 are contained in the explanatory memorandum.
As most members are aware, this measure-reversing a serious mistake made by the Liberals in 2000-is backed by research, backed by health experts, and backed by the evidence.
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.
I would like to begin by focusing on the epidemic of binge drinking. I will then address the role of alcopops in this; the mistake made by the Liberals in 2000 and the consequences of that mistake; what we have done to fix it, and what that action has achieved; the position of public health experts; and the range of measures we are implementing to tackle binge drinking.
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.
Nevertheless, the opposition has doubted that binge drinking is an issue, so let me address that first of all.
In any given week, approximately one in ten 12- to 17-year-olds are binge drinking or drinking at risky levels.
Almost 20,000 girls between the ages of 12 to 15 drink daily or weekly.
The number of young women aged 18 to 24 being admitted to hospitals because of alcohol has doubled in eight years.
In a year, more than three-quarters of a million Australians are physically abused by persons under the influence of alcohol, and in 2004-05 the social cost of alcohol misuse in Australia was estimated to be about $15.3 billion.
Last year, NSW Police Commissioner Andrew Scipione estimated:
... 70 per cent of every police engagement with a member of the community in the streets of NSW has alcohol as a factor.
And on Monday in the West Australian it was reported that girls are turning increasingly to violence and crime, with new figures showing a 70 per cent rise in offences by females 18 and under in the past three years. Western Australian Police have warned that a yobbo culture has developed among young girls, similar to young men, and police are being inundated with reports of drunken, antisocial behaviour by women.
Acting Inspector Cameron Taylor, from the central metropolitan district, said:
There seems to have been a change in social standards and it's become more acceptable and normalised for girls to drink and get aggressive ... Quite often when officers are dealing with males they will be confronted by females who are abusive and aggressive, which as recently as five years ago was much less likely to occur.
So we know that binge drinking is a problem. Parents know it is a problem. Police know it is a problem. Health experts know it is a problem.
But the member for Warringah, on the other hand, has described concerns about binge drinking as 'a beat-up'. The member for North Sydney has urged people not to 'overplay it'.
These are irresponsible attitudes, and they inform the irresponsible approach on the other side of the House to this alcopops measure.
What much of the debate over the last 12 months has centred on is the role of alcopops in binge drinking-with the alcopops industry and the Liberals on one side, and the health experts and the Labor government on the other.
So let me take the House through the evidence.
Alcopops are targeted directly at young people and underage drinkers. This is simply indefensible. By using bright colours and sweet flavours, alcopops companies aim to hook young people on drinking early in their lives.
Research shows that alcopops expose young and inexperienced drinkers to higher than normal risk because they are more likely to make false judgments about the product they are consuming.
But with all that going on, in the year 2000, the Liberals made a terrible decision, and that was to give the alcopops industry a tax break.
This mistake has had consequences.
Between the year 2000 and 2004, the percentage of female drinkers aged 15 to 17 who had consumed alcopops at their last drinking occasion increased from 14 per cent to 62 per cent.
For females drinking at risky and high levels in 2004, 78 per cent drank alcopops on their last drinking occasion. That figure had increased from 21 per cent in 2000.
The industry itself admits that their sales grew by 250 per cent since the year 2000.
So the Rudd government made the entirely sensible decision to reverse the Liberals' mistake.
The government decision leads to the logical situation that all spirits-bottled or pre-mixed-are taxed at the same rate.
As a result, the price of most alcopops has increased.
Research shows us that price increases can play an important role in tackling binge drinking, and that higher prices lead to a reduction in consumption, especially amongst young people.
In fact, an independent expert report, commissioned by the Howard government, found that:
... alcohol excise taxes are capable of being designed explicitly to target the types of alcohol known to be the subject of abuse (for example, high strength beer and alcopops) ...
For example, studies show that young people are more influenced by the price of alcohol so that increasing the tax rate on alcoholic drinks which are specifically targeted at the youth market ... is likely to be effective.
And as a result:
There would appear to be strong justification for the April 2008 increase in the Australian tax on pre-mixed drinks ... by 70 per cent.
And, indeed, Collins's and Lapsley's faith has been borne out by the empirical evidence that we have in Australia.
Tax office figures drawn from the first nine 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 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.
It is perhaps not a surprise, then, that despite the opposition of the alcopops industry and the Liberal Party, health experts have supported this measure in droves.
Let me quote some of them for the House:
Australian Drug Foundation
The CEO, John Rogerson, says:
This tax fixes a problem started with the introduction of the GST and shows that the Government is serious about tackling alcohol problems in our community.
Australian National Council on Drugs
Dr John Herron, a former Liberal minister and former AMA president, wrote in a letter to the Prime Minister:
I am writing on behalf of the Australian National Council on Drugs (ANCD) to congratulate your government on the recent announcements regarding alcohol, particularly the public personal support you are providing for the encouraging work undertaken by the Minister for Health & the Parliamentary Secretary for Health.
Utilising the taxation system is one of the most effective measures we have for reducing alcohol related harm and problems for both individuals and communities.
Alcohol and other Drugs Council of Australia (ADCA )
David Templeman, the CEO of the Alcohol and other Drugs Council of Australia, said that 'this initiative clearly recognised the problems created by the excessive consumption of RTDs which were attractive to the youth market'.
Public Health Association of Australia
The Public Health Association's Mike Daube says:
There is now dramatic evidence showing that young women are out-drinking their male counterparts and unfortunately many of them drink to get drunk ...
We know that price is the most effective single measure in reducing alcohol consumption, especially by young people. This increase will make a real dent in one of our biggest current social problems.
So that is the alcopops measure-backed by research, backed by health experts and backed by the evidence.
The alcopops industry has been ruthless in trying to undermine these facts, motivated, of course, by a desire to protect their profits. Before explaining the array of measures that we are taking to tackle binge drinking, I would like to briefly address some of the myths they have attempted to propagate.
Firstly, the allegation that 'there is no evidence the measure is working'. This is absolutely wrong. As I have said, figures from the Australian Taxation Office-the most reliable figures available-show that the sales of alcopops have fallen significantly.
Even when you take into account a rise in the sales of full-strength spirits, total spirits sales have fallen by almost eight per cent. As I have explained, that is a significant drop, and well beyond initial predictions.
The industry has tried time and again to confuse this issue, arguing that annual seasonal variations, which occur year in, year out, show trends that they simply do not show.
Secondly, the allegation that 'because some young people are now drinking full-strength spirits, they are more likely to drink more without meaning to'. In fact, research shows that young and inexperienced drinkers who drink alcopops are at higher than normal risk because alcopops disguise the taste of alcohol, which may lead to false judgments.
Thirdly, the allegation that 'the measure has failed because alcopops producers are now producing beer-based alcopops to get around this measure'. In fact, it seems this is exactly what all companies do when faced with a tax measure that is impacting on their bottom line-try to find some way to get around it. This is one of the strongest signs yet of the measure's success. What is more, we are looking closely at action to block these companies' shameful attempts to put profit above the health of young people.
Finally, the allegation that 'the figures show that there is not a binge drinking problem'. This is an argument that the Liberal Party have also tried to make, but again, it is just wrong, as I have already explained in the figures at the start of my speech.
I understand that many people in the community, and in the parliament, are keen to ensure that the alcopops measure is not the only measure the government is introducing to tackle alcohol abuse.
So let me offer my reassurances, in the form of some concrete facts.
The alcopops measure is just one part-albeit an important part-of the government's comprehensive approach to tackling binge drinking.
Early last year, the Prime Minister announced the first steps in our National Binge Drinking Strategy. The strategy includes $53.5 million to address binge drinking among young people. Elements of the package include:
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- $14.4 million to invest in community level initiatives to confront the culture of binge drinking, particularly in sporting organisations. Six major sporting codes have now signed up to that code of conduct-
and I note that the Minister for Sport is in the chamber and should be thanked for the work that she is doing in this area-
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- $19.1 million to intervene earlier to assist young people and ensure that they assume personal responsibility for their binge drinking; and
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- a $20 million advertising campaign that confronts young people with the costs and consequences of binge drinking.
In 2008 I launched that campaign, the government's Don't Turn a Night Out into a Nightmare campaign, to confront young people with the dangers and consequences of binge drinking. The ads are gritty and hard-hitting, for which the government makes no apology.
When I announced this measure, I made a clear statement as to how the revenue would be used: 'This change will see the single biggest investment ever by a Commonwealth government into preventative health measures.'
So it should not have come as a surprise to anyone when at the final meeting for COAG last year the government announced the single largest investment ever made by an Australian government in preventative health, to support a range of programs and interventions to reduce the impact of chronic illness on the community-$872 million. This is all new money.
Tackling alcohol abuse will figure highly in this national partnership.
What is more, the national Preventative Health Taskforce is currently well down the track in developing a National Preventative Health Strategy with alcohol as one of its top three priorities.
Emerging from that strategy will be further, significant initiatives to tackle alcohol abuse.
The alcopops measure will raise $1.6 billion from 27 April 2008 and over the forward estimates, somewhat less than the original estimate at the time of the last budget. This is a clear indication that the measure has been working.
Note, though, our new investments, as I have said-$872 million into the national Preventative Health Partnership, the single largest Commonwealth investment in prevention ever, as foreshadowed at the time of the original alcopops announcement; $53 million already allocated to the National Binge Drinking Strategy; and more to come via the National Preventative Health Strategy. It is clear that this government is serious about binge drinking-far more serious than any government before it.
I might end with a brief note of sadness for the irresponsibility shown by those in the alcopops industry, and perhaps even more gallingly and surprisingly, those on the other side of the House.
The alcopops industry, for their part, have shown a flagrant disregard for the truth and reasoned public debate-I cannot do better than quote Michael Moore, the CEO of the Public Health Association of Australia, when he described the 'sort of tactics of distorting facts and statistics that have been used by some representatives of the distilled spirits industry to protect their own profits.'
What is worse is the Liberal Party have stood by them every step of the way.
Since this measure was announced, the Liberals and Nationals have opposed it. They have doubted the existence of the binge drinking problem-I specifically have mentioned the former minister for health and the former shadow minister for health.
Perhaps even worse, the Leader of the Opposition has thrown up his hands in surrender, suggesting that there is nothing to be done about binge drinking, and even praising 'the enterprising ingenuity of the Australian drinker.'
The Liberals are standing with the alcopops industry as they attempt to protect their profits-at the expense of our young people.
This measure is working. It is backed by research, it is backed by health experts and it is backed by the evidence. It will enable us to make significant investments in prevention, and in tackling alcohol abuse. It should be supported.
When multibillion dollar companies develop products to hook underage drinkers on alcohol, by producing sweet, sugary drinks, then this is something that should be condemned-not rewarded with a tax break. I commend this measure to the House.
Debate (on motion by Mr Billson ) adjourned.