Alcohol Advisory Council Amendment Bill — First Reading 
Alcohol Advisory Council Amendment Bill — First Reading 
[Volume:645;Page:14555] 
Alcohol Advisory Council Amendment Bill 
First Reading 
Debate resumed from 21 February. 
Dr JONATHAN COLEMAN (National—Northcote) 
: 
 After that extremely wide-ranging Government motion No. 2 we now come back to something that is somewhat more prosaic: the Alcohol Advisory Council Amendment Bill. On the last day of the last sitting week I spoke for 1 minute on it and I made the point that National will be supporting this first reading. Now I have the opportunity to expand on that a little further. 
The purpose of this bill is to amend the Alcohol Advisory Council Act 1976 with a view to simplifying and modernising the levy-setting mechanisms of the Alcohol Advisory Council (ALAC). The bill changes the method of calculation of the ALAC levy charged on each alcoholic beverage. ALAC is currently funded by a proportionate levy on four categories of alcohol—beer wine fortified wine and spirits—according to their volumes consumed during the previous year. The total levy collected for ALAC in 2005-06 was $13 million. The new method that this bill introduces is a levy per litre of alcohol content which is similar to the classification system used by the Customs Service to calculate excise duty. The result is that drinks with higher alcohol percentages will contribute a higher proportion of the levy so spirits will attract a higher levy than wine which will in turn attract a higher levy than beers. The levy change will advantage those beverages with high volumes but a low alcoholic content—such as beer and especially light beer—and low-strength spirits such as alcopops. 
A key factor in the Ministry of Health’s choosing the preferred option was its similarity to the current method that the Customs Service uses to collect excise tax. Industry feedback provided during consultation favoured rolling the levy into the excise tax. The Customs Service and the Ministry of Economic Development also favoured this option in order to reduce compliance costs. Only Treasury and the Ministry of Health favoured the proposed option. The ministry favoured it because it shows a direct link between the industry and ALAC’s work and Treasury favoured it because it makes ALAC’s costs transparent. 
One can see the logic that the Ministry of Health is following. Obsessive consumption of alcohol is harmful and ipso facto the higher the concentration of alcohol the greater the negative effects in terms of health and social impacts. However there are strong arguments that much of the negative impact of alcohol in New Zealand society may be attributed to beverages that are lower in alcohol but tend to be consumed to excess by at-risk groups. It is a fair bet that young people who get into trouble in whatever form through the abuse of alcohol are more likely to be drinking beer and alcopops than Pinot noir and I believe we will be hearing a lot more on that subject during the select committee process. There is no doubt that we have problems with alcohol in New Zealand society—problems that stem from our ingrained attitudes to drink. This issue is discussed regularly in different forms in this Parliament and it is pretty clear that alcohol abuse impacts on the lives of hundreds of thousands of New Zealanders and their loved ones. 
ALAC fulfils an important role in encouraging the responsible consumption of alcohol and in minimising its harmful effects. It was set up in 1976 when a royal commission recommended its establishment following an inquiry into the Sale of Liquor Act. Its budget for 2008 is $12.5 million. Other sources for ALAC’s funding were considered including having a higher excise tax or funding it through Vote Health but these were dismissed by the Ministry of Health. ALAC is an organisation that deserves Government and industry support. Its education campaigns and research studies have helped to shape and change many New Zealanders’ views towards alcohol. None the less by no means is ALAC’s job finished which is why the alcohol levy is so important and why this legislation is needed. 
A recent Ministry of Health review of the levy-setting provisions found them to be outdated and not future-proofed against new types of beverage. They were found to be overly complex and it was noted that they are presently set by the Minister through a  
Gazette 
 notice which is inconsistent with the setting of the gambling levy. This review consulted the beverage industry widely and found support for adjusting the levy-setting mechanisms. Three options were given to industry stakeholders and relevant Government departments to consider. The first would have brought ALAC’s levy under excise and excise-equivalent duty and the second would have seen all funding for ALAC taken out of Vote Health. The third was the option we are now discussing: using classification bands to determine the levy. This option was seen by Treasury and the ministry as the best one because it lawfully addresses the problems uncovered by the Ministry of Health review. However the majority of industry stakeholders although not opposing this option as such preferred rolling the levy into the excise tax. 
The Beer Wine and Spirits Council and especially the New Zealand Winegrowers association favour the excise option because they believe the classification method will unfairly impact on their products which are by nature higher in alcohol content than many other alcohol products. To the Ministry of Health and Treasury the third option is preferable for a number of reasons. It updates the levy-setting mechanism by bringing it into line with current Customs Service excise-collecting systems it future-proofs against new kinds of alcoholic products it more easily takes into account any new types and it simplifies the system as the new levy-setting mechanisms are far simpler to calculate than the current ones. 
In addition the bill sets out new provisions to allow Cabinet a role in the process thereby bringing it into line with the same process as the setting of the gambling levy. An up-to-date simplified levy-setting mechanism is necessary for ALAC and the beverage industry for obvious reasons and it is the main reason why the National Party will be supporting this bill going to a select committee. 
I would just like to mention briefly three main provisions of this bill. Firstly there is a new definition of “wine”. This bill repeals all previous definitions of “wine” and replaces them with the following: “ ‘wine’ means the product of the complete or partial fermentation of any fruit … vegetable or honey and—(a) includes—(i) cider perry and mead; and (ii) fortified wines such as sherry port and fruit or vegetable-based liquors; …”. This classification simplifies the definition in the current Act which defines different kinds of wine rather than the concept of wine itself. 
The second important provision relates to the definition of “class of liquor” which is a new definition in the bill. This definition classes liquor into groups for the purposes of identifying the amounts of levy that will be taken out of any particular leverage—for example more than 1.5 percent but not more than 2.5 percent alcohol content and so on. 
The third main provision is in regards to the setting of the levy. This sets out the calculation that the Minister must use to find the correct figure for each class of liquor. Some of these rates may be variable in which circumstances the bill notes that the Minister must determine what these rates are. In addition as mentioned earlier the Governor-General may also fix the levy if directed to by the Minister. 
Although National essentially supports this bill at the first reading we take issue with it for a couple of reasons. Firstly the bill obviously advantages those beverages with low alcoholic content but high volume such as beer especially light beer and low-strength spirits—those sometimes referred to as alcopops. Whether this will see an increase in production of these alcopop products remains to be seen but it is an issue that may need to be addressed at a later stage and one that will no doubt be discussed at the bill’s hearing in the select committee. 
Secondly National is concerned that a number of the industry stakeholders as well as the Ministry of Economic Development and the Customs Service favoured rolling the levy into an excise tax rather than the option under debate here. We need to make sure that their concerns about the chosen levy-setting mechanism are heard and appropriately considered. Thirdly National strongly believes that an extra clause should be added to this bill requiring the Minister to consult with the sector if a levy increase in excess of the consumer price index is planned in any year. This will give the sector confidence in the administration of the levy and allow stakeholders to feel more involved in the levy process as a whole. 
So to sum up National will support this bill at its first reading and looks forward to the discussion of the bill at the Health Committee. We are sure this bill will attract a wide range of submissions and I think there will be some quite interesting debate in the committee. 
LESLEY SOPER (Labour) 
: 
 I rise as the deputy chair of the Health Committee to support in a short speech the first reading of the Alcohol Advisory Council Amendment Bill which as was pointed out on behalf of the Associate Minister of Health Damien O’Connor the last time the bill was before the House is a non-controversial and common-sense bill. The bill is largely a technical amendment bill and should be dealt with quite quickly in the select committee though there will be some interesting discussion. 
The prime objective of the Alcohol Advisory Council (ALAC) is to promote responsible drinking and strategies that will minimise alcohol misuse. The Alcohol Advisory Council Amendment Bill amends the Alcohol Advisory Council Act which had its origins in 1976 to simplify the current mechanisms for setting the ALAC levy. The technical amendment provides for a levy-setting regime that is fair up to date and simple to calculate. It proposes calculating the levy for each alcoholic product according to a system using alcohol classification bands that is similar to the approach used by the New Zealand Customs Service to collect alcohol excise and excise-equivalent duty. Basically the system sets a dollar amount per litre for each alcoholic beverage according to its alcohol content or deemed alcohol content. So beverages with a higher volume of alcohol will contribute a higher proportion to the levy which seems fairly common-sense. The beer industry will be affected most by the proposed update to the calculation due to the high volume of imported and manufactured beer products in New Zealand. The spirits and wine sectors will contribute a lower proportion of the levy. Any effect on the price to consumers should be minor. 
The bill is also future-proofed against the emergence of new types of beverages that would not fit easily into any liquor class in the current system. For instance some hybrid drinks have a mixture of wine and spirits. The bill repeals a host of definitions and replaces them with one very straightforward definition of “wine” and inserts a new definition of “class of liquor” each class being defined by reference to the proportion of alcohol it contains. 
This bill as I said is relatively short and technical. I am looking forward to its swift passage so that ALAC can get on with the very good work it does in education programmes research dissemination of information and treatment programmes. Thank you Madam Speaker. 
JO GOODHEW (National—Aoraki) 
: 
 I rise to take a fairly brief call on the Alcohol Advisory Council Amendment Bill. I think it has been made abundantly clear by my colleague Dr Jonathan Coleman that National will be supporting this bill and the reasons why we will support it. 
This bill is about a method of calculation of the Alcohol Advisory Council (ALAC) levy on alcoholic beverages. The method is a simplification of the current system. We are actually simplifying things for a change rather than making them much more complicated and bureaucratic and that is one of the reasons why National will certainly support the bill. 
As we all know ALAC’s role is to encourage responsible consumption of alcohol and minimise abuse. I want to briefly spend a moment or two on why it is so important that we not only simplify the method of calculating the levy but also maintain our funding of ALAC. We have a pattern of drinking here in New Zealand. We have a binge drinking culture but not only a binge drinking culture; we have a pattern of drinking that is quite damaging and costs this country quite a lot. I would like to quote very briefly from the  
Proposed ALAC Strategic Direction 2007-2012 
 which states: “This pattern of drinking results in a range of harms that is estimated to cost New Zealand in 2002/03 at least $2 billion …”. We know that that harm has escalated since then. ALAC also told us “It has been estimated that 22% of all injuries treated in hospital and the consequent ACC costs are linked to alcohol … New Zealand Police estimate 70% of their work is linked to alcohol and recent Alco-Link data equates this to Police dealing with 258 offenders per day”—every single day of the year—“who have been affected by alcohol.” Regrettably these numbers are not going down; they are going up. 
I want to spend a moment or two talking about the community action that is part of ALAC’s work and also the community action that is part of New Zealand communities working together to overcome the problems associated with alcohol. On many occasions in my previous job working for the Timaru District Safer Community Council and with other people within the Timaru district and Aoraki electorate I have seen ALAC and its partnerships at work. I have attended ALAC’s partnerships conferences and understand some of the ways it tries to lead communities to take action for themselves. I have worked alongside community and public health alcohol educators along with liquor liaison committees within a community where the industry the enforcement agencies and organisations like the safer community councils all get together to come up with good strategies to deal on a local basis with the local harm to local people. 
I tell members that I have taken part in controlled purchase operations commonly referred to as stings. They are part of the arsenal that helps us to address the harm caused by alcohol but those very same stings address only a small part of the problem—that is the sale of alcohol to minors. There is a very much larger problem of alcohol bought legally but then made illegal when passed on to under-18-year-olds to drink. Of course most of the problem around that is the fact that these under-18-year-olds are drinking an inappropriate amount of alcohol. That is in many respects why we have such a lot of harm. 
ALAC works a lot with the local councils with the territorial local authorities and works under the auspices—or I should say alongside—of the various Acts that come into play when we talk about alcohol and its regulation: the Sale of Liquor Act the Local Government Act 2002 and the Resource Management Act. ALAC works in with communities to discover the very best possible arrangements for opening hours for monitoring host responsibility and for days and hours of trade—in fact all monitoring enforcement and indeed prosecutions of those who break the law within communities. 
I finish by touching on one rather more recent endeavour—or shall I say pathway—that ALAC is going down: CPTED or Crime Prevention Through Environmental Design. It is about councils designing their communities to be safe—safe from any criminals who are out there but also safe for those young people who are drinking alcohol. One example of how that works is when communities have safe lighting pathways. A young person who had perhaps fallen foul of alcohol and collapsed on a street would always be seen because there would not be dark and shadowy areas for him or her to fall into. That is Crime Prevention Through Environmental Design and it is one of the ways communities are looking to make their young people safer. 
Let me tell members that the ALAC helpline which is an alcohol and drug helpline had 15180 valid calls—that is up by 3 percent—in the last year. That is yet one more example of why we need to make the funding mechanism much simpler. National will support this bill’s referral to the select committee for a very good reason. ALAC’s budget for 2007-08 is $12.5 million. Let us make things simpler rather than more complicated for a change. The National Party supports this bill’s referral to the select committee. 
BARBARA STEWART (NZ First) 
: 
 On behalf of New Zealand First I rise to support the referral of the Alcohol Advisory Council Amendment Bill to the select committee. It is a relatively short but technical bill and it is very timely to update and simplify the mechanisms for setting the levy because it is over 30 years since this was done. 
The Alcohol Advisory Council (ALAC) was established in 1976 by an Act of Parliament following the report of the Royal Commission of Inquiry into the Sale of Liquor. The commission recommended establishing a permanent council whose aim was to encourage responsible use and minimise the misuse of alcohol. There is still a long way to go; ALAC is a very important body. 
We were very pleased to see that the levy setting was going to be simplified. We in New Zealand First believe that this new procedure is more suited for the 21st century and we believe that the public will be keen to have a say on this bill and it is very important that they do so. No doubt there will be wide-ranging discussion at the select committee. A regime that is simple to calculate is important and that it should be aligned to the approach used by the Customs Service seems to be very sensible as the Customs Service actually collects this levy. We are also interested to see that this legislation was important to establish a mechanism for Cabinet to approve the final levy amount as happens with the problem-gambling levy. Again this seems very logical. 
The explanatory note of the bill emphasises that this levy needs to be future-proofed against new types of alcoholic products and drinks. In New Zealand First we wonder how many new types of alcoholic products we actually need particularly as alcopops unfortunately have changed the way our teenagers consume alcohol. It will be interesting to see what other developments there may be. We can count on the fact unfortunately that there will be other developments. New Zealand has changed since the original law was passed in 1976. The levy already encompasses beer grape wines spirits fruit wine and no doubt liqueurs even though they are not specifically listed in the bill. It is a fairly comprehensive list and I would have thought it would cover all the alcohol produced and imported for sale in New Zealand. 
ALAC plays a very important role in education research and advertising and I was very interested to check out the ALAC website and read its vision statement supporting the moderate use of alcohol and the minimising of harm. I again considered that we still have a very long way to go. The website shows the total amount of the levy payable for the year ending 30 June 2008. It is $12.5 million. The levy rates themselves are very clear on the website and I was very interested to see the rates set for the year ending 30 June 2008: beer 1.39c per litre; unfortified wine 5.02c per litre; fortified wine 8c per litre; and spirits 44.59c per litre which is quite considerable. 
We in New Zealand First consider that we still have a long way to go to achieve moderate and responsible use of alcohol despite the campaigns that have been running—very successful campaigns I might add. The latest campaign “It’s not the drinking. It’s how we’re drinking.” really does make people look at what they are doing to their lives. The fact that so many days are lost from people’s lives is quite disturbing. 
I was very surprised that it was so difficult to find information on foetal alcohol syndrome on the website. I had really thought that the minimising of harm would extend to the prevention of birth defects. We know that foetal alcohol syndrome is the biggest cause of non-genetic mental handicap in the Western World and it is the only one that is totally 100 percent preventable. It is a sad fact that foetal alcohol syndrome is often undiagnosed. Problems in children intensify as they move into adulthood and this is when we see many of them involved with the criminal justice system. 
New Zealand First supports the referral of this bill to the select committee. We look forward to the discussion there and we are aware that there is a lot of work to be done in this particular area. 
HONE HARAWIRA (Maori Party—Te Tai Tokerau) 
: 
 Tena koe Madam Speaker. Tena tatou katoa e te Whare. Hoino hakoa e rere ke ana taku mahi ki nga tikanga o te Whare nei e tika ana kia tu ahau i tenei wa hei reo mo te Pati Maori kia mihi atu ki to tatou tuahine a Louisa katahi ano kua uru mai ki roto i te Whare. Te mihi ano hoki ki tona whanau kua tae mai hei tautoko me te mihi ano hoki ki to matou tuahine a Georgina Beyer kua hoki mai ki te Whare. No reira tena koutou tena koutou kia ora tatou katoa. 
Although it is a little out of line with protocol I would like to take the opportunity on behalf of the Maori Party to welcome our sister Louisa to the House. We welcome her whanau who have come to tautoko her on this day and we also welcome our sister Georgina Beyer who has come back to the House for this occasion. Tena koe Georgina. Tena tatou katoa. 
Last August I was out on night patrol around the town camps outside of Alice Springs with the Aboriginal equivalent of the Maori wardens—people who have no police powers but are dedicated to helping whanau trying to help themselves. It was a sobering night in many respects: it was sobering to see the commitment and the patience of the night patrol it was sobering to know that these patrols and other initiatives were going to be disbanded under the racist Australian Northern Territory intervention plan and it was sobering to see the extent of alcoholism in indigenous communities. Although I have done the serious “party hardy” scene all over the country in my day I can tell members that I have never ever seen the level of alcohol abuse I saw that night on night patrol. It blew me away and it also opened my eyes to the way in which we are not dealing with alcoholism in this country. That includes this bill—good bill though it is—to amend the Alcohol Advisory Council Act 1976. 
It is important that we as parliamentarians know that while we pitter-patter around the periphery of the problem of alcohol abuse with bills like this—we have already passed legislation to allow the sale of alcohol in supermarkets and the sale of alcopops to teenage kids and we have extended the opening hours of clubs and bars—we leave our poorer communities to deal with the trauma of the drunkenness the assaults the alcoholism the poorhouses the night patrols the soup kitchens the health problems the domestic violence and all the needless tangihanga. It is all fuelled by easy access to alcohol. Those liquor and alcohol outlets that we have sanctioned drain poor families suck out desperately needed food money and profit from the addictions of the poor. 
So today we come here to consider how best to support the Alcohol Advisory Council (ALAC) in its job of encouraging the responsible use of alcohol and minimising its misuse. That has to be a good thing. ALAC has been around for about 30 years since the Royal Commission of Inquiry into the Sale of Liquor. It has battled through the time since the Sale of Liquor Act 1989 deregulated the liquor industry increased trade flexibility removed restrictions on drinking alcohol and relaxed the sale and supply of alcohol all of which led naturally to greater consumption and abuse of alcohol. ALAC knows more than anyone the effects of alcohol consumption so when it calls for resources to deal with alcohol abuse in Maori society the Maori Party hears what it is saying. When ALAC calls for research on the impact of alcohol and liquor advertising on Polynesians we hear that call too. 
Today’s bill aims to provide ALAC with levies based on the level of alcohol in drinks which will enable it to continue with its work. Fifty percent of all 12 to 17-year-olds in Aotearoa—Maori Pakeha whatever—are boozing it up big time. This is a horrific statistic that we simply cannot ignore any longer. While surveys tell us that non-Maori kids drink more often they also tell us that Maori kids binge drink at two and a half times the rate of non-Maori. It is these kinds of statistics and these scenarios that challenge us in this House to take responsibility for the health of our nation’s future just like Sir Apirana Ngata did. He was petitioned by Ngati Porou women to use his parliamentary powers to stop the further sale of alcohol on the East Coast which unfortunately and unwittingly gave rise to the great haka “Poropeihana” opposing the prohibition of alcohol. Yet here we are nearly a century later still trying to deal with the destructive effects of alcohol in Maori communities. 
While we support this bill our greater interest is still in the changes we need in legislation to deal with alcohol abuse. More than half of all teenagers who binge drink say they get their alcohol from their parents and there are no adults around when these teenagers are getting off their faces. Maybe we should be expending less effort on banging the kids and more on sorting out the parents by focusing on efforts to turn whanau round by giving them positive options in life such as a decent education decent housing decent kai and a job rather than more police more laws more jails and more misery. Parliament can set an example by cutting back on alcohol at its own functions and by MPs being better role models than those dickheads who get drunk down town and make fools of themselves in public. 
Anyone who goes out on night patrol with the cops in Aotearoa will see cells filling up with over-intoxicated drunk people every weekend as if the police do not have better things to do with themselves! How many tangi could we prevent if we took a harder line on alcohol abuse? How many fights court referrals court cases and convictions? How much community detention preventive detention home detention and jail? These are the questions we need to consider and the targets we should be setting ourselves to reach. Yet we sit here and kid ourselves that we are serious about dealing with these issues while we allow the liquor industry to continue to promote its mind-bending products on national television for heaven’s sake. I am nobody’s hero but I do take pride in being a non-drinker a non-smoker and drug-free. I know that Maori people respect those who walk their talk. 
Hon Darren Hughes 
: You’re a saint! 
HONE HARAWIRA 
: Thank you very much. I also know that 60 percent of Maori inmates point to drugs and alcohol as major factors in their offending. There is a lot we need to do. We need research to back up our fight against alcohol abuse but not too much research—there is heaps of it around already. We need to put restrictions on the availability of alcohol. We need to put the brakes on binge drinking. We need more focus on education sport and culture and we need to put more real energy into giving people positive life choices instead of the dead-end lifestyle that sees us lose 22000 people every year to Australia. Alcohol is still the most damaging drug in our society bar none. It is scary enough knowing that from the time one turns 18 it is legal but the really frightening thing is that 50 percent of our kids are already into it before they even make that 18th birthday. We here in this House have the power to change that; the question is whether we have the courage. Tena koe Madam Speaker. Kia ora tatou e te Whare. 
Debate interrupted.