Hughes Darren: Alcohol Advisory Council Amendment Bill — First Reading 
Hughes Darren: Alcohol Advisory Council Amendment Bill — First Reading 
[Volume:645;Page:14512] 
Hon DARREN HUGHES (Deputy Leader of the House) 
 on behalf of the  
Associate Minister of Health 
: I move  
That the Alcohol Advisory Council Amendment Bill be now read a first time. 
 At the appropriate time I will move that the bill be referred to the Health Committee for consideration; that the committee present its final report on or before 26 June 2008; and that the committee have the authority to meet at any time while the House is sitting except during oral questions during an evening on a day on which there has been a sitting of the House and on a Friday in a week in which there has been a sitting of the House despite Standing Orders 192 and 195(1)(b) and (c). 
The Alcohol Advisory Council Amendment Bill amends the Alcohol Advisory Council Act 1976 to update and simplify the current mechanisms for setting the Alcohol Advisory Council (ALAC) levy. The primary objective of ALAC is to promote responsible drinking and strategies that will minimise alcohol misuse. ALAC’s functions include research dissemination of information educational programmes and innovative treatment programmes designed to achieve its objectives. ALAC is funded by a levy on all alcoholic beverages manufactured in and imported into New Zealand. Payments from producers and importers are made monthly to the New Zealand Customs Service at the same time as and in addition to any excise and excise-equivalent duty payable under the Customs and Excise Act 1996. The total levy amount for ALAC during the 2005-06 year was close to $13 million. This is small in comparison with alcohol excise which was $712 million for the year ended June 2006. 
The bill is a technical amendment bill and it provides for a levy-setting regime that is fair up to date and simple to calculate. It is also future-proofed against the emergence of new types of beverages that would not easily fit into any liquor class in the current system—for instance some hybrid drinks that have a mixture of wine and spirits. 
Simon Power 
: What’s a hybrid drink? 
Hon DARREN HUGHES 
: They have a mixture of wine and spirits. 
In 2004 the Ministry of Health reviewed the current levy-setting mechanisms. The review found that the way the levy was calculated and apportioned was outdated and overly complex and that there was no process for Cabinet involvement in setting the levy. This bill proposes to calculate the levy for each product according to a system using alcohol classification bands. This is similar to the approach used by the New Zealand Customs Service to collect alcohol excise and excise-equivalent duty. Under this system a dollar amount per litre will be set for each alcoholic beverage according to its alcohol content or deemed alcohol content. This means that alcohol beverages with a higher volume of alcohol will contribute a higher proportion of the levy. 
The amendment bill will permit regulations to be made for the purposes of aligning the classes of liquor under the Act with the system for classifying beverages that is used in the Customs and Excise Act 1996. The bill provides for a transitional provision to ensure that the current obligation under the Act to pay the levy determined under the principal Act before its amendment will remain in place until the first levy set under the new system is in place. 
The main concern for the industry arising from the review in 2004 was to align the notification dates of the CPI increase on excise with the ALAC levy  
Gazette 
 notice. The date it has been aligned to— 
Simon Power 
: Where’s the old Mr Hughes? 
Hon DARREN HUGHES 
: —wait for it—is 1 July. It is intended to pass the bill in order to have the calculation in place for the 2008-09 funding round. For this to be possible a short passage through the select committee will be needed and that was indicated in the referral motion at the beginning of this speech. Given that the bill introduces common-sense changes to simplify levy processes for the industry and in order to provide the opportunity to have the new calculations in place we will be asking the select committee to consider reporting back as early as possible. In line with the Standing Orders of the House I recommend that the committee present its report on or before 26 June. 
I commend this amendment bill to the House.