Monday, 28 April 2008

Labor hikes 'alcopops' tax knowing it will have no effect

Is there any better example of Labor's true tax for its own sake attitude than the massive hike in tax on 'alcopops', ostensibly to curb teen binge drinking?
A war of words has erupted after federal Health Minister Nicola Roxon accused the former Howard government of fuelling teenage binge drinking.

Ms Roxon said a decision in 2000 to cut excise on pre-mixed alcoholic drinks - so-called alcopops - helped fuel the surge in excessive drinking by young people, particularly girls.

A furious Opposition Leader Brendan Nelson branded the claim an "outrageous slur".

Ms Roxon said the Rudd government's decision to lift the excise by 70 per cent would help tackle binge drinking by making the sugary, innocuous tasting drinks between 30 cents and $1.30 a bottle more expensive.

The tax increase will deliver about $2 billion a year to the government - a "big chunk" of which will go to preventative health schemes, Ms Roxon said.
The first point to make is that the change will have zero, nil, nada, no impact on the supposed problem of teen binge drinking. One only has to look at the problems in the UK compared to ours to see that there's not only no comparison but there's not even a cultural issue to deal with. Teens will simply change drinks and keep drinking anyway.

The second point is that if the tax changes are meant to reduce consumption and positively effect teen health then why is the government expection to raise $2 billion when it should actually expect the tax to be revenue neutral at best?

The right of governments to control taxes carries it with it the responsibility to use that power wisely. Raising taxes always imposes the heaviest burden on those who can least afford it and, thus, tax increases such as we have just seen with alcopops - sold to us in order to help fix a minor problem (at best) and pay for health services - is immoral.

Not to be outdone, the anti-smoking lobby has also joined the fray:
After lifting the excise on alcopops, the federal government should also raise the tax on cigarettes, the Rudd government's chief preventative health adviser says.

...Rob Moodie, from the National Preventative Health Task Force, is now calling on the government to lift the tax on cigarettes by 2.5 cents per cigarette, Fairfax newspapers have reported.

Dr Moodie said the alcopop changes were "terrific".

"Using taxation or pricing as a lever for reducing harmful consumption is a really good idea," he said. "There is certainly room to move (on cigarettes) (and) this issue will certainly come up in the taskforce."
Is there any item on earth more heavily taxed than cigarettes? Why not slug smokers some more? I'm not aware of anyone that has ever smoked a cigarette, become violent and bashed their spouse or got into a pub brawl. I'm not a smoker and hate the smell (which gives me a headache) but I reckon smokers get a raw deal when compared to drinkers.

This government seems to be getting carried away with symbolism over outcomes by trying to be seen to be 'doing something' rather than getting on with the actual job of governing.

Into the 'doing something' category falls the FuelWatch program aimed at reducing petrol prices at the pump.
MOTORISTS will have a better chance of saving money under FuelWatch, the competition watchdog says.

But Australian Competition and Consumer Commission (ACCC) chairman Graeme Samuel has warned motorists not to expect the saving to be obvious.

Rather than seeing a universal two cents drop across the market, Mr Samuel said FuelWatch would give motorists the knowledge they needed to go to service stations where fuel already was cheap.

"The really important saving for motorists is the power it gives them to know when prices are going to be lifted and when prices are going to be reduced," Mr Samuel told the Nine Network.

Motorists will also know where they can buy the cheapest fuel in their suburb or town under the scheme.

"If you know the price of petrol is going to be lifted by 10 cents tomorrow, you've got 15 hours notice under the FuelWatch scheme to buy today, that'll save you 10 cents per litre," Mr Samuel said.
The head of the ACCC says that fuel savings may "not be obvious"? FuelWatch is an extension of a similar program that has been operating in Western Australia. How's it going over there? They now have the highest fuel price of any state. Terry McCrann explained why it's all wrongheaded a couple of weeks ago.
AFTER five months of seemingly endless ever-more-flatulent rhetoric, the no-longer-new Rudd Government has finally made its first real major policy decision.

And it's a stinker.

It is in any event a decision driven by spin. To seem to "do something about petrol prices". With the scheme starting in December, voters will have nearly two years to decide what that something actually delivers at the pump.

Here's a long-term prediction: they'll be pining for the bad old days of rampant discounting.

...Sure, consumers have "voted" for greater stability in petrol prices.

The rude shock will be the price at which they get it. Not those low prices through the fuel cycle, but at best some midpoint.

And more likely above the mid-point.
I don't care what colour the government is - because both types are guilt of this sort of nonsense from time to time - it's lunacy to think that government interference can do anything but raise prices.

Populism reigning, grocery prices are next.
SUPERMARKET giants should be banned from opening new stores in areas where they already have a stranglehold, the nation's independent grocers group has told an inquiry.

Anti-price discrimination laws should also be reintroduced to ensure smaller grocers, such as IGA, can buy products at the same price as major supermarket chains, Woolworths and Coles.

National Association for Retail Grocers of Australia (NARGA), which represents around 4500 independent grocery retailers, addressed the Australian Competition and Consumer Commission's (ACCC) grocery inquiry in Canberra today.

NARGA chairman John Cummings said Coles and Woolworths enjoyed a 80 per cent share of the grocery market in Australia, which lead to a lack of competition and higher prices for shoppers.
The fact that Coles and Woolworths have an 80 per cent market share didn't put off Aldi from opening stores all around the country and offering good quality product at lower prices. News late last year was that Costco was looking to establish itself here, as well. All of this is to the good, as prices are reduced and that helps those at the bottom of the earnings scale.

This government really needs to get into the role of governing and take the tough decisions that need to be taken in order to strengthen our economy and increase employment. Focus on reducing government red tape that impacts business to no positive effect, remove inefficient taxes like stamp duty and the fringe benefits tax, and take on a big issue such as improving our education system through the introduction of school vouchers.

Those changes alone would mean that Labor could enjoy a successful first term in government.

(Nothing Follows)

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