Prebble Richard: Customs and Excise (Alcoholic Beverages) Amendment Bill — First Reading Second Reading Instruction to CommitteeCWH In Committee Third Reading 
Prebble Richard: Customs and Excise (Alcoholic Beverages) Amendment Bill — First Reading Second Reading Instruction to CommitteeCWH In Committee Third Reading 
[Volume:608;Page:5366] 
Hon RICHARD PREBBLE (Leader—ACT NZ) 
: 
 The member has told us that because 59 young people have been admitted to hospital the Government is raising an $18 million tax. That is pretty extraordinary. That is an amazing statement and leap of logic. 
Let us understand what this bill that we are debating under extraordinary urgency is about. Interestingly enough the last time we had extraordinary urgency was when the Government broke its promise to its voters and put up tobacco tax. It did it in exactly the same way. It did not want to muck up its Budget night so it took extraordinary urgency to put up tax on cigarettes. Now it has decided to hit the working man’s liquor as well. The House should understand because Government members opposite have not— 
Simon Power 
: Ice cream. 
Hon RICHARD PREBBLE 
: Ice cream as well! But let us look at what the bill actually does. At the moment Parliament has a different rate of excise duty on alcohol. The cut-off point is 23 percent proof. If a product has less than 23 percent proof alcohol the tax is only $21.99. If it is above 23 percent proof it is $39. People ask why that is. Parliament used to think it was a pretty good idea to discourage young people from drinking hard liquor so there was a differential: a lesser volume of alcohol attracted a lower tax. In an extraordinary leap of logic the Government has now told us that by increasing the tax on the lower-alcohol product we are somehow stopping young people from drinking hard liquor. I would like the next speaker to explain that to me again. How is it that increasing tax on the low-alcohol product stops people from deciding to drink? I think that the example the Minister used was gin. 
Hon Member 
: That’s $37. 
Hon RICHARD PREBBLE 
: That is $37 to $38 thank you very much. Apparently the Minister who is in charge does not know that. 
That is the first point. The next is that the Government says it has some evidence. That is interesting because I was waiting to hear it. The Government paid $1 million of taxpayers’ money for a review of taxation called the McLeod tax report. I know that when the Minister got it he threw it across the room and said: “I paid $1 million just to be told that ACT’s policies are best!” If he had read on he would have seen what was said about excise duty. Members opposite should understand this: the McLeod report raised the issues asked for submissions from the public the Ministry of Health and from everyone else and then had a look. Did the McLeod tax report say that excise duty on alcohol should be increased? Did any members opposite read it? Perhaps they did not. Let me tell them what that report did state: “we concluded that excise taxes were difficult to justify on either tax efficiency or tax equity grounds.” Then it stated: “We believe that the levels of alcohol excise that could be justified on externality grounds”—the grounds that the previous member was using—“are likely to be well below those currently applied in New Zealand.” The Government’s own review said that we cannot justify the present levels of tax on the sorts of grounds that members opposite are referring to. 
They actually held a proper review and they also brought it home to everyone what this is really all about. These taxes as a whole—and this was back in 2001—raised $2.8 billion. Now it is over $3 billion. That is a lot of money. The report also pointed out that excise duties were the only major revenue taxes not reformed in the last 20 years. In respect of the Government’s taxing policies it said the area lacked firm policy foundations and excise duties were difficult to defend. It went on to talk about policy rationales being consistent with generally accepted tax policy frameworks and stated that if health costs were to be selectively recovered from drinkers what about all the other areas? The Government bleeds—and I say it is crocodile tears—about 59 young people being admitted to hospital for alcohol abuse. I ask the Minister how many young people have been admitted for drug offences. How many young people have been admitted for P? How many people have been admitted— 
Hon Jim Anderton 
: The Government has just reclassified P. 
Hon RICHARD PREBBLE 
: The member says the Government has just reclassified P. It only took 4 years and insistence from the Opposition! Actually the Government has not reclassified it because the legislation has not gone through the House yet and the Greens voted against it. I would be interested to see that. I imagine the Greens will vote for this tax but they are prepared to defend marijuana. 
The Government’s own review states that there are inconsistencies but then—which I thought was very interesting—it quoted the Ministry of Health’s report. Did the Ministry of Health say that the tax should be raised on medium-range low-alcohol products? Did it tell that to the people who wrote the McLeod report? No it did not. What it said was that there might be a case for high-alcohol products. High-alcohol products—gin whiskey and other things that members of Parliament have been known to be fond of—have not had their tax rates altered. The tax rates that are being altered are those of the alcopops. No member of Parliament drinks alcopops! The Government is taxing that group but is the Bellamy’s whiskey that members of Parliament are quite fond of going up in price? No it is not. Did the Ministry of Health say that we should increase the tax on moderate-alcohol products? No it did not. It said we should increase the tax on high-alcohol products. 
When the McLeod report used the term externalities it was stating that it could not justify the cost of alcohol to the community. It stated that the present levels of excise cannot be justified. Members opposite have not yet addressed any of the McLeod report decisions in this debate. They appointed that committee set the terms of reference got members of the public and experts to turn up in front of it and paid $1 million for it. Now we are told that the present level of tax cannot be justified. Indeed the report went on to say that on externality grounds the proper tax is likely to well below those currently applied in New Zealand. 
What we really have is a Government that is a master of introducing stealth taxes. Under this Government the total tax take in New Zealand has gone up $9 billion—from $34 billion per year to $43 billion per year. No Government in history has increased tax that much; this Government is completely shameless. I guess it thought we had lost all its “credit cards”. No increase in tax! That is what Government members campaigned on but it has increased tax by $9 billion. Why are we doing this tonight? Where is the credibility in the idea that young people will roar out and buy crates of alcopops? What a load of rubbish! The Government is doing it because it does not want this legislation to muck up its Budget night. It wants the bad news out early. 
I ask members opposite where it says on the bottle that this tax will apply only to young people. The cost of the sherry that the elderly drink is going up. Port is going up. This is a shameless attempt by the Government to collect even more tax and to then try to justify it on some pseudo-moralistic grounds. The McLeod tax report stated that present levels of tax were not justified and I would like the next Government member who speaks to address that report.