Tamihere John: Customs and Excise (Alcoholic Beverages) Amendment Bill — First Reading Second Reading Instruction to CommitteeCWH In Committee Third Reading 
Tamihere John: Customs and Excise (Alcoholic Beverages) Amendment Bill — First Reading Second Reading Instruction to CommitteeCWH In Committee Third Reading 
[Volume:608;Page:5375] 
Hon JOHN TAMIHERE (Minister of Youth Affairs) 
 on behalf of the 
 Minister of Customs 
: I move  
That the Customs and Excise (Alcoholic Beverages) Amendment Bill be now read a second time 
. The purpose of this bill is to align the excise duty on alcoholic beverages with between 14 percent and 23 percent alcohol by volume with the duty that is levied on products with greater than 23 percent alcohol by volume and to increase the rates of excise in line with the movement in the consumer price index. The provisions that relate to beverages containing more than 14 percent and less than 23 percent alcohol by volume will come into force on the date that the bill receives the royal assent. The rest of the clauses those relating to the consumer price index adjustment and consequential amendments will come into force on 1 June 2003. 
Although most people use alcohol without harming themselves or others the fact remains that the misuse of alcohol results in considerable health social and economic costs which are borne by individuals families and the wider community. Minimising the harm caused by alcohol and illicit and other drug use to both individuals and the community is a key priority for this Labour-Progressive Government. We are using strategies of supply control demand reduction and problem limitation to achieve our aim of harm minimisation. 
The Alcohol Advisory Council of New Zealand commissioned economist Brian Easton to produce a report on the current excise regime for alcohol. Amongst other things the Easton report recommended that the excise duty on light spirits be increased. The effect of an increase in the excise duty is to increase the price of alcohol on which it is levied. The effect of an increase in the price of alcohol particularly where young people are involved is some reduction in alcohol consumption. This is clearly evidenced in all the best research data that we have available. The extent varies by type of drinker by the drinking situation and possibly by the quantity drunk in each situation. 
The current excise duty regime creates a tax advantage for alcoholic beverages in the 14 percent to 23 percent alcohol by volume range. This current tax advantage means that our young people and heavier drinkers can go down to their local bottle store and purchase a 1125 ml bottle of 23 percent alcohol for about $8. This bill puts into effect the recommendation in the Easton report relating to the excise duty on light spirits. The changes mean that alcoholic beverages in the 14 percent to 23 percent alcohol by volume range will be taxed according to their actual alcohol content rather than their all being levied as though they contain 18 percent alcohol by volume. 
The changes also mean that the products will be taxed at the higher rate—the same rate that full-strength spirits are taxed at. This will remove the tax advantage that light spirits currently receive. That will mean that an extra $4.45 will be levied on 750 ml bottles of light spirits and an additional $6.65 will be levied on 1125 ml bottles of light spirits. This will mean that young people will not be able to afford to buy as much alcohol as they currently do. Their $10 pocket money will not enable them to buy a bottle of gin. They will drink less alcohol get less drunk and cause less harm. 
Although light spirits have been identified as a particular problem area it is necessary to apply the higher rate of excise duty to all products containing between 14 percent and 23 percent alcohol including wine-based products such as sherry and port. This is necessary to ensure that these products do not become an alternative source of low-priced high - alcohol content beverages as has happened in other countries particularly Australia where this potential problem has not been dealt with adequately. 
The bill also includes the annual adjustment to the excise and excise-equivalent duties on alcoholic beverages. This adjustment an increase of 2.61 percent is based on the movement in the consumer price index for all groups excluding credit savings over the preceding 12 months. This will come into force on 1 June 2003 as this is the date on which the industry expects adjustments to alcohol excise rates. This adjustment has been included in the bill to ensure that the increased excise and excise-equivalent duties payable on beverages containing between 14 percent and 23 percent alcohol are consistent with those that will be payable on full-strength spirits.