A Win To The Liquor Industy In Australia With The Government Overturning The ‘Alcopops’ Tax
March 19, 2009 by Susan Denny
From “The Australian” 19th March 2009
THE Rudd Government will be forced to hand back $300 million to distillers after the Senate voted down the 70 per cent tax increase on alcopops last night in the culmination of another chaotic performance from the Opposition.
After a Coalition senator failed to turn up for the vote, the controversial alcopops tax was defeated in a second ballot when Family First senator Steve Fielding sided with the Opposition.
The Government introduced the tax hike by regulation in April last year with 12 months to win approval from the parliament before having to refund the revenue raised. With the defeat of the Bill last night, the tax will have to be refunded.
The Opposition offered a way out by voting to validate the taxes already collected.
“The last thing we want to see is a bad outcome out of a tax grab that has gone terribly wrong,” Opposition health spokesman Peter Dutton said.
To underline its political point, the Government has rejected the move, which will cost $1.6 billion in the budget forward estimates.
Health Minister Nicola Roxon said: “If the Liberal Party didn’t want to return this money, they should have supported this bill.
“We believed this was a sensible tax putting all spirits on to the same base, closing a loophole created by Mr Costello (former treasurer Peter Costello) that saw the consumption of these products skyrocket.”
Deputy Prime Minister Julia Gillard said last night that although the distillers had suggested the $300million in collected taxes be spent on alcohol rehabilitation programs, legally the Government did not have an option.
“The legal position is clear,” Ms Gillard said on ABC’s Lateline. “Our obligation is to return the tax dollars to the distillers.”
The Senate rejected the alcopops tax after a day of low farce and high drama. Senator Fielding voted with the Coalition after his ban on television alcohol advertising during sporting programs in children’s viewing time was rejected by the Government, giving opponents of the tax the numbers.
Senators were stunned when a count showed the Government had won the vote.
The Opposition leadership team and whip Stephen Parry went into a huddle.
Moments later a sheepish Country-Liberal Party senator Nigel Scullion got to his feet to beg the forgiveness of the Senate. He had missed the vote, he explained, because of “an inadvertent error”.
“I was caught in a stairwell having an impromptu meeting,” Senator Scullion said. “I didn’t hear the bells.”
To compound his error, he was not carrying his pager. Following convention, the vote was held again – but not before harsh words had been exchanged.
Senator Fielding blamed the Government for his decision. “We all know that alcohol is linked to sport and that needs to be broken,” the Family First senator said.
“The Rudd Government has missed an opportunity to break that link. It’s crazy.”
Senator Fielding claimed the concessions won by his fellow crossbenchers, $50 million of health funding measures to cut alcohol abuse and mandatory warning labels on bottles and cans, could still proceed.
Ms Roxon said these had been lost with the bill. She called the advertising demand “a decision for government, not Senator Fielding”.
“A decision to change advertising that affects the sporting industry, the broadcasting industry and many more should be one that is taken properly in a considered way,” the Health Minister said.
The Distilled Spirits Industry Council of Australia welcomed the vote.
“The senators who made the right decision in rejecting the Government’s tax grab on RTDs realised that a tax was not a solution to problem drinking,” the council’s research manager Stephen Riden said.
“Now is the time that all parties start working together to create a community-wide, comprehensive approach to the issue.”
Mr Riden said the Government should heed the Liberals’ call and keep the revenue raised to tackle alcohol abuse.
