Liquor tax rise of 50pc up for debate

JOHN HARTEVELT
Last updated 05:00 03/10/2012

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Parliament will debate a proposal for a 50 per cent rise in alcohol excise as part of what's expected to be a marathon session on the Alcohol Reform Bill.

Green MP Kevin Hague has added an amendment to the bill - the 22nd to date - proposing an across-the-board tax increase on all alcoholic products.

"The issues that we have with problem drinking, and in particular binge drinking, all of the experts are pretty confident would be impacted favourably by increased price," he said.

In a review of alcohol laws published in 2010 the Law Commission called for a 50 per cent rise.

It said that would bump up the price of a 330ml bottle of 4 per cent alcohol beer by 17 cents; a 750ml bottle of wine by 96c and a 750ml bottle of spirits by $6.96.

It would drive down alcohol consumption by about 5 per cent, which would "produce a significant reduction in a range of alcohol-related harms" and create a $72 million net benefit to the economy.

Mr Hague said a "substantial" amount of the revenue from an increase could be set aside for treatment services for people dealing with addiction.

He had not considered proposing more targeted tax increases on certain products, but would support government measures to do that.

"Fundamentally, we have a problem with alcohol consumption pretty well regardless of what type of alcohol it is.

"If we can do something about that, we should."

According to the Law Commission report, the top 5 percent of drinkers pay 34 per cent of excise tax and the top 10 per cent pay 49 percent. "Those who drink the most alcohol pay the most tax," the report states.

Critics of an excise increase argue that it would unfairly punish responsible drinkers for the costs of alcohol abuse created by a minority of people.

The purchase age part of the Alcohol Reform Bill was voted on in a conscience vote last month, but the rest of the bill is still to be debated. It is expected to have its committee stage debate - the penultimate stage - from October 23 and could take several weeks to pass.

Justice Minister Judith Collins said the Government had no plans to increase excise on alcohol.

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- Fairfax Media

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