Thursday, November 01, 2012

When the government's own advisor tells it to tax wine properly...

Here's what the Australian National Preventive Health Agency told the minister today:

"Based on public health considerations, the Agency finds that the current operation of the Wine Equalisation Tax is of concern and requires reappraisal."

Pretty strong, for bureaucrats.

Here's junior health minister Mark Butler's early response:

JOURNALIST: Minister on a different issue, you’ve seen two reports in the last week discussing minimum prices on alcohol and also volumetric taxes on alcohol. Has the government come to any feeling, or perhaps you have a personal feeling, about the best way to deal with alcohol-related problems.

BUTLER: Well we’ve seen advocacy from some in the public health sector around floor pricing for some time so the report released earlier this week is not a new perspective, though there’s some added detail in there. As to the report this morning that appeared in News Limited papers around a forthcoming piece of work by the preventative health agency, that is just a draft report that has not yet been received by government so I’ve not seen, it’s not come to me and I obviously can’t comment on its contents. But can I say two things about it, to stress first that when we do receive it it will be a draft report that will go out for further consultation with the community before final recommendations are provided to the government around pricing issues, particularly the idea of a minimum or a floor price on alcohol. The second thing I would stress is that a report from an agency like the preventative health agency will be one of a number of considerations the government would weigh when considering pricing issues, if we do come to considering pricing issues around alcohol. In response to the Henry Review, in last year’s tax forum, members of the government, including the Treasurer, have said that some of those issues would include the supply of grapes in the wine industry, industry restructuring and a range of other issues. So it is very early days, we have not received a report that is a draft report that will go out to the community for further consultation, so for that reasons we don’t really have anything further to add to this issue. I think it is important that that draft report be the subject of further discussion in the community around this issue.

JOURNALIST: Do you think it’s right that you can bottled water for more than you can buy a bottle of wine?

BUTLER: Well when we receive the Preventative Health Taskforce Report in 2009/2010 and made our response in 2010, we did accept the recommendation of that taskforce that a public interest case be developed around the issues of minimum floor pricing, which is essentially at the heart of your question, Sue, and when the preventative health agency was established, that task was giving to this agency. Now, we take that process seriously, we think the community takes it seriously, stakeholders in the public health sector or in the alcohol manufacturing sector would expect that process to be respected by us and we will. A draft report will be received by us soon, it will then be released by the agency, not by the government, for further community consultation over a period of some weeks and then a final report will be developed. We think that’s the proper way to develop thinking around this issue, providing evidence and having some proper process in the community. For that reason we don’t intend to express a view about these issues.

JOURNALIST: This could solve your budget problem, though, couldn’t it? You could raise $900 million by taxing wine at the same rate as you tax beer.

BUTLER: Whether the question is put from the perspective of budget or from a perspective of public health or comparing the price of water, my answer will be the same. We’ve set a very clear process in place that we think needs to be expected by the government and by other stakeholders in this argument.

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