Customs and Excise (Alcoholic Beverages) Amendment Bill

I move, That the Customs and Excise (Alcoholic Beverages) Amendment Bill be now read a first time. This is important legislation. It will increase the excise duty on alcoholic beverages that contain more than 14 percent but not more than 23 percent alcohol, by volume. The products that mainly fall into that category are the very cheap light spirits often drunk by young people. It is well known that most young people make their alcohol purchasing decision based on the amount of alcohol they can get for their money—or, put another way, the amount of bang they can get for their buck.

The drinking habits of young New Zealanders are of great concern to me, and, I know, to at least some other members of the House. Recent surveys have shown an increase in the level of heavy drinking amongst young people. Survey data show that the proportion of young women aged 14 to 17 years who drank four drinks or more in one sitting at least once a week increased from 15 percent in 1998 to 28 percent in 2001. That means almost a third of underage young women aged 14 to 17 are now drinking excessively. In my view, it is not acceptable for us even remotely to be seen to encourage young New Zealanders in general, or young New Zealand women in particular, to drink in that manner. In addition to an increase in heavy drinking in young women, survey data also show that there was an increase in the proportion of young men who are drinking excessively. The survey also showed that 58 percent of young men aged 14 to 17 years, and 51 percent of young women aged 14 to 17 years, reported drinking enough to feel drunk at least once a month.

Something needs to be done to address the issue of heavy drinking by young New Zealanders, and this Government is determined to do that. The excessive consumption of alcohol by young New Zealanders can, of course, be disastrous. It is well know that drunkenness contributes to teenage pregnancy, car accidents, drownings, house fires, and birth defects. I personally believe that lowering the drinking age and increasing the access to alcohol was a grave mistake. That is not Government policy, but it is my personal view.

While alcohol consumption is embedded in New Zealand culture and most people manage to drink without harming themselves or others, the fact remains that the misuse of alcohol results in considerable health, social, and economic costs, which are borne by individuals’ families and the wider community. A recent study of patients attending an emergency hospital department during December 2000 showed that 35 percent of injured patients reported having consumed alcohol prior to sustaining their injury. The risk of sustaining an injury was 2.8 times greater when alcohol was consumed. The number of publicly funded hospitalisations for 15 to 17-year-olds where the primary diagnosis was alcohol-related increased to 205 in the year 2000. For 18 to 19-year-olds, the number of publicly funded hospitalisations where the primary diagnosis was alcohol-related showed an increasing trend, from 55 in 1996 to 85 in 1999, and continued to increase to 114 in the year 2000.

Affecting the price of alcoholic beverages has been identified internationally as one of the key ways to reduce the amount of alcohol consumed by young people and heavy drinkers. I repeat that, internationally, one of the key ways identified to reduce the amount of alcohol consumed by young people and heavy drinkers was to increase the price. Research shows that price is a powerful determinant of the amount of alcohol consumed by a population. Young people and heavy drinkers are particularly susceptible to the price of alcohol. Increasing the price of alcohol through an increase in excise duty should result in decreased consumption by young people and heavy drinkers. That is what this Labour-Progressive Government is interested in—a decrease in alcohol consumption by young people and heavy drinkers.

This bill will change the excise duty regime, so that alcoholic beverages in the 14 to 23 percent alcohol by volume range will be taxed according to their actual alcohol content, rather than all being levied as though they contain 18 percent alcohol by volume. The changes also mean that the products will be taxed at a higher rate. That is the same rate that full-strength spirits are taxed at. That will mean—

💬 Hon Richard Prebble: So you may as well buy whisky.

If a person has the money he or she may, and Mr Prebble may well do that. However, young people of 14, 17, and above will not. The changes also mean that the products will be taxed at the higher rate—the same rate, as I say, that full-strength spirits are taxed at. That will mean that young people will be less able to afford to buy as much alcohol as they currently do. Their $10 of pocket money will not be able to buy them, as it currently does, a bottle of gin. They will drink less alcohol, get less drunk, and cause less harm to themselves and to other New Zealanders. That is the view of the Government. [Interruption]

💬 Mr SPEAKER: There are far too many interjections, and a lot of them are in the second person.

Maybe the price of alcohol is too cheap already. The Government believes strongly that this measure will assist in reducing the level of drunkenness and the harm that alcohol causes to young New Zealanders. I recommend this bill to the House.

It is telling, is it not, that the Government has sent clapped-out, has-been Jim Anderton to introduce the bill? [Interruption]

💬 Hon Richard Prebble: I raise a point of order, Mr Speaker. Can we have a little even-handedness? We made a few interjections when the Minister claimed that one could buy bottles of gin for $10, and we were told to be quiet. The Leader of the Opposition has hardly started to speak, and he has been greeted with a barrage of statements that may be explained by the need for the bill.

💬 Mr SPEAKER: The member will know full well that the first sentence from the member contained a very provocative statement, which was answered by interjections.

💬 Hon Richard Prebble: Well, it’s factual.

💬 Mr SPEAKER: I will not warn the member again. Please be seated. I will not warn the member again that he should not make those sorts of interjections.

The question is where is the Minister whose name is on the bill? That is not Jim Anderton; it is Rick Barker.

💬 John Key: Who’s that?

I am not sure who he is. However, I do know that he knows that he does not want to be associated with what this bill will do to the spending habits of the young people of Tukituki from tomorrow morning onwards. He is a wise man to keep his name away from this bill, although he is not wise about much else.

💬 Hon Jim Anderton: I raise a point of order, Mr Speaker. First, I do not think that it is appropriate for members to refer to members who are absent, or to the reasons for that. The fact is that Mr Barker is overseas and I am the Acting Minister of Customs.

💬 Mr SPEAKER: No, please be seated. That is out of order.

We have “Old Mr Crocodile Tears” telling us that—[Interruption]

💬 Mr SPEAKER: The member will not make unparliamentary comments. He will keep within the Standing Orders.

💬 Hon Roger Sowry: I raise a point of order, Mr Speaker.

💬 Mr SPEAKER: This will come out of the member’s time.

💬 Hon Roger Sowry: Are points of order coming out of members’ time now?

💬 Mr SPEAKER: Yes.

💬 Hon Roger Sowry: That is a new ruling, is it?

💬 Mr SPEAKER: Yes.

💬 Hon Roger Sowry: All right, let us make sure that they come out of Government members’ time.

💬 Mr SPEAKER: Right, they will, too.

We have Mr Jim Anderton—

💬 Hon Richard Prebble: I raise a point of order, Mr Speaker. If the Speaker wants to cut down the Opposition’s time, there is nothing we can do about that. However, I make this point. “Old Mr Crocodile Tears”—that is interesting. We have not been told whom the member was referring to. For all that we know, he could have been—

💬 Mr SPEAKER: The member will be seated. He knows full well that it referred to a member of the Government .

Jim Anderton tells us that we are here at 10 to 9 at night because of car accidents, house fires, and birth defects. Of course, he is wrong; we are not here because of those things. We are not here because of the effects of alcohol on young people. The Government has the choice of raising that issue at any time, at any place.

We are here purely because of the ego and vanity of Dr Michael Cullen, who does not want his Budget tainted with this measure. That is why we are here. If the Government really wanted young people to get the message, it would have announced this measure on the 6 o’clock news tonight. The Government would have been on all the radio stations, throughout today and tomorrow, telling young people to stop drinking these evil substances. But it did not, and it will not. The Government brought this legislation in after the newspaper deadlines tonight because it wants to make sure no one notices it. That is deeply cynical. I resent Jim Anderton’s standing up in this House pretending that this bill is all about caring for young people, because it is not.

Dr Cullen’s Budget will be tainted, anyway.

💬 John Key: And boring.

It will be boring, because Dr Cullen has already dropped the Government’s growth goal of getting New Zealand into the top half of the OECD by 2011. He has already been dropped in it by the Prime Minister, who has told him to find a solution to the electricity crisis—a solution that will manufacture the appearance of new generation in the next 2 weeks. He has big problems with the transport legislation, as well as the electricity market. So his Budget is already tainted. This measure, I have to say, will not make any difference to that view. I invite the next Government speaker to tell us why this matter is so urgent that the House has been put under extraordinary urgency tonight, and why it is so secret that I first saw it when the Minister came into the House and tabled it, just before he stood to speak. Why is that? Why should we regard this bill as anything more than a cynical manipulation of the parliamentary process, exploiting the vulnerability of young people? It is no more than that.

The Government is getting into that habit more and more. Today this Parliament debated the Resource Management Amendment Bill (No 2). The Minister in charge of that bill has made public and parliamentary statements that were absolutely wrong about the content of that bill, the extent of change, and the opportunity for public debate. Why are we not having public debate about this bill? Will the brave Minister of Youth Affairs be standing up to speak for the right of young New Zealanders to make submissions on this bill? He will not, because he is doing what he is told, as he always does when it really matters. He is muzzled and is doing what Helen Clark tells him to do.

💬 Hon Tony Ryall: The warrior!

The warrior, the outspoken Minister of Youth Affairs! Or has he been going around the country for the last 6 months telling young people that the Government planned to raise the taxes on this sort of alcoholic drink? Is that what he was doing when he was being cool with the last group of young people he talked to? No, he was not.

💬 Dr Lynda Scott: Once was a warrior!

Yes, he once was a warrior. What about the rest of them?

💬 Rod Donald: Is the member for or against this bill?

We will vote against it, because this is a total abuse of the process—absolutely! This is a cynical manipulation of the process. It is an abuse of the young people of New Zealand. The Government has made no case for putting this Parliament under extraordinary urgency for the first time in a number of years, to discuss this bill tonight. The only reasons that this is happening are to beat the news deadlines and to keep this issue away from the Budget. Those are the only reasons. I invite some of those brave Government members to stand up and own up to that.

If there is a problem with young people’s drinking, why not go out and tell them to stop doing it? Why not raise the legal age of drinking from 18 and put it back to 20? That is the position I took at the time. Why are we not debating that matter tonight? We heard the Hon Jim Anderton earlier; he was dripping with sincerity. As Mike Moore said, when one can fake sincerity, one really gets to people. That is what we heard tonight.

💬 Hon Murray McCully: Oozing sincerity.

Oozing sincerity—is that not the name of one of those drinks? We will be opposing this bill, because it is an abuse of the process.

The Government does not deserve the $14 million this measure will raise. What will it use that money for?

💬 Hon Tony Ryall: Māori television.

It will use it for more closing of the gaps, more social policy seminars, more social scientists’ conferences, more hui, more meetings, more regional development, and more Sovereign Yachts projects. This bill is just the start of that. Let us wait until we get the 5 percent levy on gaming machines, which will be more income for this politically correct Government, which cannot leave anything alone.

💬 Mr SPEAKER: I call Judy Turner.

I raise a point of order, Mr Speaker. I am sorry to raise this matter so long after the incident occurred, but, given your ruling that you would take any time off the person who was speaking, I now wish to raise the matter of the offensive comments that the senior Government whip was yelling out. I do not intend to repeat them—

💬 Opposition Members: He’s on his cellphone.

He is allowed to do so; there are totally different rules for the Government.

💬 Mr SPEAKER: Points of order will be heard in silence.

Well, we will raise the cellphone issue later. The senior Government whip was most offensive. He can laugh about it, but I took offence. I think your ruling has meant that now we have to stack these things up until the end of a speech. I regret that, but I believe that the senior Government whip should be required to apologise for those comments.

💬 Mr SPEAKER: I ask the senior Government whip, if he made comments that were offensive, to withdraw and apologise.

💬 David Benson-Pope: I do not believe they were offensive, but I am prepared to withdraw and apologise.

💬 Mr SPEAKER: No, the member will either withdraw and apologise—

💬 David Benson-Pope: I withdraw and apologise.

I raise a point of order, Mr Speaker. I wish to draw it to your attention that at the time when the Hon. Roger Sowry was taking his point of order the senior Government whip was in conversation on his cellphone in the House. That is a total breach of the Standing Orders, and once again it shows his contempt for this House.

💬 Mr SPEAKER: If I were to rule out everybody who was on a phone at any time in this House it would involve a lot of people, but I just say that I deplore that practice and whenever it is raised I will rule against the person so concerned.

💬 Hon Tony Ryall: Rule it out.

💬 Mr SPEAKER: I have ruled it out—right now.

I raise a point of order, Mr Speaker. I seek clarification of just where your ruling leaves us. The impression members now have is that although you deplore the use of cellphones in the Chamber, you have not actually ruled out that practice. You referred to phones in general; well, there are phones in the Chamber. For the whole time that I have been a member it has been permissible for those phones to be used, but it has never been permissible for cellphones to be used. I ask you to make it clear to the House whether the use of cellphones is or is not permitted.

💬 Mr SPEAKER: I make it absolutely clear that it is not permitted. The use of the phones attached to members’ desks is permitted. I call Judy Turner.

I raise a point of order, Mr Speaker. Since you first awarded the call to Judy Turner from United Future there have been several points of order, and I want to clarify that, in terms of your earlier ruling, that time will come off her speaking time.

💬 Mr SPEAKER: No, it will not, because she has not started her speech.

I raise a point of order, Mr Speaker. I wonder whether I could reflect on the ruling you made in Mr English’s speech that you would take time off his speech for points of order, and, in particular, I draw your attention to Speaker’s ruling 16/2, which states: “A point of order must be brought up at the time it occurs …”. I wonder whether it would be possible to bring up a point of order at the time it occurs, if that time is to come off the member’s speaking time.

💬 Mr SPEAKER: If I think the member has provoked a point of order, then I will do that. On reflection, I think the Leader of the Opposition was correct, and I was in error when I did what I did.

Price is a hugely important factor in the decision to buy alcohol, particularly for young people on limited, pocket money - style income. When a young person can purchase a 750 ml bottle of spirits that is 23 percent alcohol—that is, 1 percent below the taxable band—for the same price as a meal in McDonald’s, then we have a recipe for disaster. Risk behaviour among adolescents regarding alcohol is well documented. At a time of life when experimentation is at a premium—whether for social status amongst peers, escapism, or rebellion—it is an unwise nation that does not take every step to protect young people from themselves. Almost one-third of 14 to 17-year-olds are drinking weekly, according to the Alcohol Advisory Council (ALAC) report of 2001. Sixty-seven percent of underage teenagers reported being drunk on at least one occasion in the previous 3 months.

Price influences not only which brand people buy and where they buy it, but also the total amount purchased. Taxation, which is the Government’s tool for manipulating price, should form an integral part of any policy to reduce alcohol-related harm. Internationally, pricing policy is recognised as one of the most effective tools in reducing alcohol-related harm. ALAC maintains that by raising the cost of alcohol we do reduce consumption.

The ongoing lesson that this legislation should teach us is that whenever we further liberalise—as we have done by lowering the drinking age—we need to legislate to compensate, to prevent unacceptable advantage being taken. Whether or not individual members agree that 18 is an appropriate age for the consumption of alcohol, we now have to acknowledge that that age group, whose members still have social contact with high schools, has helped supply those same underage drinkers with cheap and dangerously high concentrations of alcohol.

Although harm minimisation has some merit, United Future has ongoing concerns about those young people for whom harm minimisation will not be sufficient to prevent them from deteriorating into addiction. Moderation is not the answer for everyone. We must remember that pricing is only one strategy, and initiatives to research the effects of alcohol advertising in all its forms, to ascertain its impact on teenage drinking trends, need to be worked through. United Future believes that in recent times young people have been directly targeted by the alcohol industry in ways not previously seen.

Parent education is a vital strategy for combating teenage binge drinking. ALAC confirms that parents are the key facilitators of the supply of alcohol to teenagers. Twenty percent of the 14 to 17-year-old teenagers surveyed admitted that their parents bought them alcohol to take to parties, or gave them money with which to purchase it for themselves.

This bill is the Government’s response to a developing situation that will reduce the availability of high - alcohol content products, and United Future will be supporting it.

What a time to be introducing Budget legislation! What is so important about this legislation that it could not have been introduced next Thursday night? I believe that this particular Government is trying somehow to spin this bill through the system tonight, rather than face up to its responsibilities. The Minister of Finance, by not putting this legislation through next Thursday, is not facing up to his responsibilities. Next Thursday he will say: “There was no rushed legislation as a result of my Budget.” The fact that he had already done all of it will perhaps escape some members of the public.

The real problem with this legislation is that the last Labour Government allowed the reduction of the drinking age; that is really what this legislation is all about. Those Labour members of Parliament who were in the House last time are responsible for the fact that 14 to 17-year-olds are now drinking high-spirit alcohol. The last Labour Government had the opportunity to increase the drinking age and never did so.

I say that if Labour were really concerned about the situation, in the last 4 years it would have done something to increase the drinking age. All that it is doing, under the guise of pretending to help young people, is increase the taxes that young people will pay. It is very clear that this legislation will increase taxes by $18 million. I am not sure whether the Hon Jim Anderton made that point; is he aware that that is the case? I think he said so, but I am not absolutely sure, because of the way in which he rattled through the speech, which appeared to have been written for Mr Rick Barker. Another $18 million will go into the coffers of the Government as a result of this legislation. It may be that $4 million will go back as a result of consumer price index adjustments, but, at the very least, the Government will gain $14 million.

Given that this measure is aimed at young people, this Government will gain $14 million only if young people go out and spend their money. So under this Government we will still see young people drink alcohol with a high spirit content, and this Government will make money out of it. This Government will make money out of young people, who will be drinking the same amount of alcohol as they were drinking before, but will be paying $18 million more in taxes. Is the Government denying that customs and excise taxes will go up by $18 million? There will be $18 million more from young people’s misery, as a result of this Government’s legislation. There is no way that the Government can run away from that. If it wants to do anything about the problem of 14 to 17-year-olds drinking more, it should support Ron Mark’s legislation to increase the drinking age, and should take immediate action to put it on the Order Paper.

The Government is really being very, very cynical in this legislation. The member for United Future believes that the pricing of alcohol will affect how much young people drink, but that is not the case. They will go out on Saturday, Friday, and Thursday nights, and they will drink the same amount as usual. They have got money to spend, and no responsibilities. Young people will go out and spend money on this alcohol. It will not be just 14, 15, 16, and 17-year-olds who do that; those who are over 20 will also spend their money on this alcohol. They will pay the same amount, and they will pay it to the Minister of Finance. He will make money out of the misery of young people, and United Future, in supporting this legislation, supports that misery. Judy Turner can smile as much as she likes, but that is the fact of the matter. The Government will not make $18 million out of this legislation if young people are drinking less; it will make $18 million because young people will drink around the same amount, if not more, depending upon how they feel on the day. The Government will make 18 million dollars’ worth of misery.

The other people who will suffer under this bill are the older people. We all know that on a cold winter’s night—and we will have a few cold winter nights—there is nothing better than tucking up with one’s half-g, one’s flagon of sherry or port. People will need it under this Labour Government, especially those in the South Island, in seats like Waimakariri, Invercargill, and Otago. Those old people will be thumped by this Labour Government, because the price of port and sherry will go up as a result of some effort by the Hon Mr Anderton to reduce the amount of alcohol being drunk by young people. Older people will suffer under this legislation. They will have to pay more for their port and sherry, and does Labour care? What joys in life do people have when they get to 70, 75, or 80?

💬 Simon Power: You can’t smoke under this Government.

People cannot smoke. If someone is 75 or 80, what is better than a nice port or sherry of a night, afternoon, or morning? As we know, this Labour Government changed the rules on drinking, and it is now illegal to go to a shop and buy a half-g of sherry to take away. Has Labour changed the regulations that it introduced at the end of last year? As a result of those regulations, it is a criminal offence for a person to take away a half-g of port or sherry from the off-licence. Those regulations made criminals of our older people, and now the Government is making it very, very difficult for them to enjoy their port and their sherry, which, as a result of Labour’s failed energy policies, they need to keep them warm,

What sort of Government do we have? Where is Labour going? This is Nordmeyer’s “black” Budget come early for those people. Nowadays, under this Labour Government, those people suffer throughout the year. Not only on Budget night but prior to Budget night, these Labour Party members of Parliament, supported by United Future and, I think, the Greens, want to hit the elderly people, who can only occasionally enjoy a port and sherry to keep them going during the day, the afternoon, and the night, as they are entitled to do. They have worked for New Zealand, and they have probably supported this Labour Party for many, many years. Now, this is their reward. They are being kicked in the teeth by the Labour Party just as they come to the time of their life when they want to keep warm. They cannot turn on their heaters any more, because of the energy crisis. They want to have a quiet drink, but now they cannot.

💬 Hon Jim Anderton: It’s embarrassing listening to this speech.

It may be embarrassing, but that member will be listening to such speeches for a long time tonight, because the Opposition in this House will make sure that Labour realises, and the young people of New Zealand realise, that they are being hit by Labour with yet another $18 million tax. How many taxes have we seen in the short space of time since the last Government? I am pretty sure that at the last election. Labour had credit cards and all sorts of things that said there would be no more taxes, but here we go. This is a tax before the Budget. I think that must be some sort of record for most political parties. We are getting the type of tax that one would expect on Budget night, more than a week before Budget night.

The young people of New Zealand will be told that the reason the price of these drinks went up was that Labour increased the price. I support anything that will make young people drink responsibly, but the main thing that would make them do that would be to increase the age at which they are entitled to get alcohol. The fact that they can get it at ages 14 to 17 now is because the legal age is 18. If we put the legal age back up to 20, as New Zealand First wants to see happen—and we get no support from Labour on that—young people would start drinking when they were closer to that age.

In response to Mr Jones, who has just resumed his seat, I want to say right at the start that I did not vote to lower the drinking age.

This bill is important, because so many times we hear speeches in this House based on moral outrage and fundamentalism. I ask members here tonight to consider the really important aspect of this bill: our young people. Let us not worry about party politics. Let us not focus on one side of the House attacking the other. If we sincerely care about our young people, let us take stock and act in a sincere way. So many of us get up with mock moral outrage and say that we worry about the youth of New Zealand. Tonight we have the opportunity to do something about that.

Let us think about what this bill really is about. Members might say that it is just about money, but I suggest that it is not. The facts speak for themselves. Price is the principal determinant of how much people drink, and what kind of alcohol they drink. If that is not the case, how come people buy “Chateau Cardboard” when they would much prefer a finer wine, usually found in a bottle? I use that example, because people prefer to drink more expensive alcohol, but cannot always afford to.

I also say to members opposite that in this country the number of publicly funded hospitalisations of 18 to 19-year-olds, where the primary diagnosis was alcohol-related, has shown an increasing trend from 55 in 1996, to 85 in 1999, to 114 in 2000. I suggest to members that they should stop and consider what this bill is about, instead of resorting to cheap tactics such as attacking each other, and consider what they can do to assist young people in New Zealand.

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.

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.

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.

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.

I will respond directly to the Hon Richard Prebble, who spent most of his time talking about the McLeod tax review, as though the sole purpose of the Government in introducing this legislation was simply to raise taxes. That is not the case at all. The Government is not doing that as a revenue-grabbing—

💬 Hon Richard Prebble: I raise a point of order, Mr Speaker. I would be happy to listen to the member’s reply, but there is some sort of dreadful ringing in his microphone.

The ASSISTANT SPEAKER (Hon Clem Simich): I accept that.

The Government’s approach is actually about minimising the harm that that kind of alcohol causes. More and more people are starting to drink the sort of drink that has a lower alcohol content, and it is causing a real problem. Young people used to buy a six-pack of beer. Now, with the same amount of money, they are able to buy spirits, so migrating straight on to harder liquor that is not good for them, at all. As those higher prices kick in, the Government believes that fewer younger people will be accessing the product, and therefore revenue from those products will fall. It is actually a harm minimisation approach.

It is true that young people are now getting access to this kind of alcohol. It is not good for them, and that is why the Government is taking a very clear approach to it. More than that, we know that young people are very price-sensitive to alcohol, so we are sending that message. That is absolutely the truth. Older members laugh, but it is true that in the bigger alcohol stores, one can buy much harder alcohol than previously at very low prices. I challenge members to go and look at the kind of alcohol young people can get for the same amount of money they might have paid for a six-pack when they were younger. It is a very real concern. I do not agree with the Hon Richard Prebble that it is a tax grab. I believe that it is Parliament sending a very clear and responsible message to young people about alcohol, and that is why I am supporting the first reading of the bill.

I think Richard Prebble has been reading the wrong report. This issue is about consumption of alcohol. Yes, there is a revenue component to it, but the report he should have been reading is the one that Brian Easton prepared for the Alcoholic Liquor Advisory Council, Taxing Harm: Modernising Alcohol Excise Duties, because that is clearly the report—

💬 Hon Richard Prebble: What date was that?

It was November 2002. That report is clearly the basis for the Government’s decision to change the excise duties on so-called “light spirits”.

Bill English must be suffering from amnesia, because once upon a time he was in Government, and he knows that governments always increase excise tax under extraordinary urgency. The memory must be fading for him, but the question I ask National, ACT, and New Zealand First is why are they voting against this bill? Do they not care about young people? Are those parties not concerned about unscrupulous operators who are peddling cheap booze to teenagers? Parents up and down New Zealand will not thank National, ACT, and New Zealand First for trying to block the Government’s efforts to close that loophole in New Zealand’s excise tax laws.

The Greens support this bill for a number of reasons. Despite what some interjectors are suggesting, our alcohol and drug polices focus on minimising the harm caused by those substances. We want to reduce the influence of alcohol in our society, and reduce individuals’ alcohol abuse. We believe that this bill is an important step in that direction. That is because so-called “light spirits”—watered down ethyl alcohol, or some other flavoured alcohol, containing small amounts of sweetener—have been deliberately designed to benefit from anomalies in the tax system. They have been deliberately marketed to young people—not just those under 18, but those over 18, as well—and to heavy drinkers. According to one source—

💬 Hon Richard Prebble: ALAC.

No, not ALAC; it was probably one of your friends—the Distilled Spirits Association of New Zealand. According to that source, over 1.2—[Interruption] I am glad Mr Prebble confirmed that—over 1.2 million bottles of this stuff are being drunk each year. That is because for the price of a 750ml bottle of wine with an alcohol content of under 14 percent, one can buy 1.125 litres of 23 percent proof pseudo-vodka or gin. This bill will almost triple the price of that product from around $9 to around $27.

The Government expects to receive an extra $14 million from this tax increase. Quite frankly, we hope it does not, because we hope consumption will drop. From the Green Party’s point of view, the whole point of supporting this legislation is that the increase will provide a price deterrent to young people, in particular, and to heavy drinkers, and that consumption of light spirits and other alcoholic drinks within that 14 to 23 percent range will drop.

💬 Hon Ken Shirley: Cannabis consumption will go up.

No, I do not think that cannabis consumption will go up. I do not think it will have any bearing on cannabis consumption, and until we have some sensible cannabis laws, we will not get cannabis consumption down either. But that is another debate for another day.

If the Government receives more money from this excise tax, we urge it to provide more funding and support for community-based treatment services for alcohol addiction, and more funding and support for youth groups to provide clear education on the responsible use of alcohol. I hope members like Mr Mark would agree with that.

💬 Ron Mark: They closed Queen Mary, didn’t they?

That is something that needs to be addressed, as well. But that should not be the end of the story. We would like to see the Government go even further and tackle what the booze barons are getting away with—the insidious pre-mix alcoholic drinks known as ready-to-drinks, and the fruit-flavoured alcopops. It is not enough to justify this legislation just in terms of trying to reduce consumption of so-called light spirits. I acknowledge that that is outside the scope of this bill, but the Government needs to tackle those other beverages, because they are also contributing to alcohol dependence and addiction problems amongst our young people. We hope the Government tackles those issues. We also hope that the Government tackles the anomalies in the cannabis legislation, and catches up with what is happening in Europe, in particular, where common-sense law changes are under way to reduce harm. That is the focus of our policies on drug and alcohol—to reduce harm, and in the case of cannabis, to reinforce that it is a health issue, not a police issue.

I would like the House to reflect on these words: “Smokers and drinkers need not fear sharp increases in tobacco and alcohol prices during the next 3 years.”

💬 Simon Power: Who said that?

Dr the Hon LOCKWOOD SMITH: Those were the words of the Minister of Finance, Michael Cullen. Do members know when he said those words? He said them just prior to the election last year. He told New Zealanders that smokers and drinkers need not fear sharp increases in tobacco and alcohol prices during the next 3 years. Some colleagues are calling out “Pinocchio!”.

It is interesting to reflect that Dr Michael Cullen is nowhere to be seen. We know he is around, because he briefed members on this legislation earlier on. But Dr Cullen knows that just before the election last year, he promised New Zealanders that there would be no sharp increases in alcohol prices. Taking the tax on sherry from $21 a litre of alcohol to $39 a litre of alcohol is damn near a 100 percent increase. Now I do not want to be picky, but I would suggest that a damn-near 100 percent increase is a sharp increase in the price of alcohol. That is why Dr Cullen got the expendable Minister to introduce this bill into the Parliament. We know that the Hon Jim Anderton is sort of in his swansong period now. Everyone knows that he is on the way out, and that he is expendable.

The vanity of Dr Cullen! He does not want his Budget contaminated by the deceit. He promised prior to the election that there would be no sharp increase in alcohol prices, and this tawdry little bill doubles the tax on a whole range of alcoholic beverages in this country.

A lot of older folk go to bed reasonably early—

💬 Dr Lynda Scott: They have to—to keep warm.

Dr the Hon LOCKWOOD SMITH: Yes, one of my colleagues reminds me that older folk have to go to bed early to keep warm. When they wake up tomorrow morning, they will face a bleak winter. We know that older folk will get cold this winter because of the hopeless ineptness of this Labour Government in managing electricity supplies in this country. Its policies in stopping electricity generation are just a disgrace. We know that when older folk go to the Returned Services Association, they will not be allowed to have a cigarette because of this miserable, nasty Government.

When they go to buy their sherry or port, the old folk of this country—one would think Labour might care a bit about their comforts in their senior years—will now pay a 100 percent increase in the tax on their sherry. I am told that that is around about $4 a bottle. Now to people like Dr Cullen, Clayton Cosgrove, or John Tamihere, an increase of $4 a bottle for sherry might not be a lot of money. But for people dependent on their superannuation—the older retired folk—$4 is real money. Our older retired folk will wake up tomorrow morning to a bleak winter, a cold winter, and a future where they cannot have a cigarette at the Returned Services Association. When they buy their bottle of sherry or port, they will have to pay twice as much tax.

When Jim Anderton spoke on this legislation, and I think also the young guy from north of Wellington, Mr Hughes—the “cocopop kid”—one of the arguments we heard was that this legislation was aimed at harm minimisation. Can they not see the paradox in what they are arguing? The Government doubles the tax rate on these alcopops, sherry, and port—not to mention some of our fine wines—and claims that will stop people buying the drinks, yet it budgets for $18 million more tax. How will a Government gain of $18 million more tax revenue reduce consumption of those drinks? It is an unashamed tax grab. It is tax grab at the expense of our older folk and our younger folk. Government members are so naive if they think that this tax will stop young people drinking.

Jim Anderton said that young folk buy these drinks out of their pocket money. Jim Anderton should get real and get back in touch with where young people are at. Research shows us that alcohol for young people is often bought by their parents, families, and friends. It is not bought out of their pocket money. All that will happen is that it will cost mum and dad a bit more when they buy the alcohol for their young people. Anyone who thinks that young people buy these drinks out of their pocket money, and that this tax will stop them buying alcohol, is simply so old and out of touch that they should get out of Parliament before they make bigger fools of themselves.

No wonder Dr Cullen is nowhere to be seen. How close was it to the election that Dr Cullen made the promise? When was the election?

💬 Opposition Member: In July.

Dr the Hon LOCKWOOD SMITH: Which day in July?

💬 Opposition Member: It was 27 July.

Dr the Hon LOCKWOOD SMITH: He made the promise on 9 July. On 9 July last year, Dr Cullen promised that drinkers need not fear sharp increases in alcohol prices, and he has doubled the tax.

One has to ask oneself what the Government will spend this $18 million on. I worry that it will spend more of it on that flagship policy, closing the gaps. The Government will spend more money on Māori television, but it will also spend some it on the new Boeing 757 for Prime Minister Helen Clark to fly to more world capitals to embarrass New Zealand as she lobbies for her new position at the United Nations. The Government will spend the money on all sorts of worthless things. Older folk in New Zealand—our retired folk and our respected senior citizens—will pay for it. Every time they buy a bottle of port or sherry, they will pay another $4 towards Helen Clark’s overseas extravaganzas. To think that this tax will stop young people drinking alcopops shows how deluded and out of touch this Government is.

Labour has been in office only 3 years—

💬 Gerry Brownlee: Alcopops are not covered.

Dr the Hon LOCKWOOD SMITH: My colleague says that alcopops are not covered. One wonders what the Government will achieve. The Government will hit some high-quality New Zealand table wines that are over 14 percent alcohol. This Labour Government will double the tax on some of our finest table wines tonight, and it thinks that is good for New Zealand. It is crass stupidity. Members opposite should be upfront and honest. It is a tax grab, it breaks a faithful pre-election promise by Dr Michael Cullen, and it will not do anything to stop young people drinking alcohol.

I rise to support the bill. To reflect on Bill English’s speech at the start of this debate, I had hoped that the National Party’s speechwriters would bring him down a speech. What are the real issues that the National Party seems to neglect? All the evidence shows that young people and heavy drinkers are particularly susceptible to the price of alcohol. So an increase in the price of that alcohol through an increase in excise duty should result in decreased consumption by young people and heavy drinkers. What are the facts, which the Opposition spokesperson on health should know? Those are the facts.

One does not need to be a rocket scientist to know that the drinking habits of young people are causing great concern. It was a rather stupid move by the previous Parliament to lower the drinking age to 18. Recent surveys have shown an increase in the level of heavy drinking amongst young people. Survey data show that the proportion of young women aged 14 to 17 years who drink four drinks or more in one sitting at least once a week has increased from 15 percent in 1998 to 28 percent in 2001. In addition to an increase in heavy drinking in young women, survey data show that there has also been an increase in the proportion of young men who are drinking excessively.

This bill is part of saving lives. It is all very well for the Opposition to have a bit of an outing. Opposition members love extraordinary urgency. It gives them a bit of an outing, exercises the lungs, and gives them a bit of a laugh. But this issue is no laughing matter. We are doing everything that we can to try to reduce the amount of alcohol consumed by young people. If price is a lever to reduce that consumption, then so be it. It is all very well for members on the Opposition side of the Chamber to make opportunistic speeches. The survey also showed that 58 percent of young men aged 14 to 17 years, and 51 percent of young women aged 14 to 17 years reported drinking enough to feel drunk at least once a month. Members of the Opposition should look at what is happening on our roads. What is the No. 1 drug-abuse problem in this country? It is alcohol.

I commend the Government for taking this action tonight. This is well researched and well-thought-out. It is but one of the many measures being taken to help our young people, who are not helped by the Opposition and were not helped by the previous Parliament when it reduced the drinking age.

What a sanctimonious speech that was, if ever I heard one. If this Government was actually planning to do something about alcohol consumption that would be good, but it seems to have missed one very important point. Everyone over there on the Government benches has missed one very important point—that is, the ready-to-drink alcopops have 5 to 7 percent alcohol by volume in them and are not captured by this bill that is being rushed through the House under extraordinary urgency. We have heard those sanctimonious speeches about doing something about youth drinking, but those drinks are not covered. I hope that somebody on the Government side of the House will realise that and get up and give another speech about the fact that young people will not be captured under this measure. It will do nothing about the alcopops that are so easy for young people to drink. All that this bill is is a tax grab.

This legislation will affect sherries and ports. Exactly how many young people drink sherry and port? I do not think there are very many. The ones that I know do not drink sherry and port. Who does drink sherry and port? Older people do that. They are the ones who will be caught by this tax grab, which sees a 100 percent increase in duty on any drink that has from 14 to 23 percent of alcohol by volume in it. Something else will be captured that some of us rather like with desert at night: late-harvest wines. Do young people drink them?

💬 Hon Trevor Mallard: Mine do!

I do not think a lot of them drink such wines, either. Young people do not drink sherry, port, or very expensive late-harvest wines. Only Mr Mallard says that his children drink late-harvest wines. They will be caught by this bill that is being rushed through tonight, under extraordinary urgency. We have heard about the kids. Yet the kids who are drinking too much alcohol will not be caught by this legislation. It is just a sham—an absolute sham. This Government has closed Queen Mary Hospital’s youth programme for the kids who have the very worst alcohol and drug addiction problems. It has cut that programme in my electorate; it does not care about youth drinking.

💬 Brian Connell: Who did that?

The Labour Government that says it cares so much about youth drinking did that. The mental health report shows that we have a major lack of youth programmes in this country. What has the Government done about that? Nothing. But tonight, under extraordinary urgency, the Government tries to sell this bill, which is simply and utterly an $18 million tax grab, wrapped up in political spin that says it wants to do something about youth drinking.

We all want to do something about youth drinking, but this bill will not do that. It totally and utterly misses the mark, and is just a sham. Kids are not dumb; they are not stupid. If they are so price sensitive, they will just buy the alcohol—the gin and the vodka—and the Fanta and the Coke, and mix the drinks themselves. Young people would do that if ready-to-drink drinks were captured by this bill, but they are not, so they will not have to bother. We can forget about all that. Young people will just not have to bother mixing their drinks themselves. If the Government did want to do something about youth drinking, the ready-mixed drinks are what it should have targeted.

Yes, we certainly do need to try to change New Zealand’s culture of binge drinking—absolutely! I would be the first person to agree with that. I have been in accident and emergency departments, stitching up the kids who come in from car accidents. I have been on the front line, so I know what it is like and I would like to do something about that. But this bill does absolutely nothing. It is all the older people who like a little bit of sherry or port who will be unable to have a drink. It will be an extra cost for them. As they tuck up cold in bed because of the power crisis—a power crisis that will cause blackouts, and the Government has done nothing about that—they will wrap up in their blankets, and they might like to have a little bit of sherry or port just to warm them up on the inside. But what will happen? They will all have to pay a whole lot more for that. It will be a cold winter for the older people of this country and they will not even be able to have an enjoyable port or sherry, because this Government has increased the excise duty not on the things that the kids drink but on the things that older people drink—the sherries, the ports, and the late-harvest Rieslings.

Our wine industry will not be very happy about that. I represent the Kaikoura electorate—that is, Marlborough and Waipara. Those areas have absolutely fabulous, stunning wine, and they will not be happy that this Government has doubled the excise duty tonight on wines that happen to just creep over that 14 percent alcohol by volume mark, raising the duty from $21 to $39 per litre. Some of those wines are late-harvest Rieslings, too. Those areas will not be happy with this Government. We will have to have a serious look at that.

We heard back then—when was it? Here we are; that is right. It was actually in May 2001 that Dr Cullen introduced the tobacco excise. That is funny—it happens to be May again, just before Budget time. Well, fancy that! When Dr Cullen said before the election last year—after the tobacco excise duty was increased in May 2001—that it was most unlikely there would be any increase in tobacco or alcohol excise, we did not think we would see this measure tonight. But here we are with another broken promise, because another tax is being introduced in May. And why are we doing it at the beginning of May, I wonder? Maybe it has something to do with the Budget. I think it may just be that Dr Cullen does not want his Budget to be sullied with something that is as unpleasant as this bill that we are debating here under extraordinary urgency tonight. But here we are, with this bill being rushed in.

Now, if we were to do something about young people and their drinking, why are we debating this bill now? Why did we not have this debate earlier in the day, when we could have actually got some really good publicity about what we should do in this country about youth drinking? We could have got that publicity in the papers. It is very, very important to try to get free publicity out there, in order to try to convince kids that binge drinking is extremely bad for them, that we do need to have a much more responsible approach to alcohol and alcohol consumption, and that there is nothing great about getting oneself absolutely drunk on a Saturday night—that it is not a great thing to do because it leads to all sorts of negative consequences. We could have publicised that if we had had this debate at a time when we had cameras and some media interest, and that would have been really good. But no, that did not happen. We were told about the urgency at 9 p.m. tonight, and we did not get the bill until 8.30 tonight.

We are rushing this bill through under extraordinary urgency simply and utterly so that Dr Cullen’s Budget will not be sullied by something as unpleasant as this $18 million tax grab. I would really like to do something about the alcohol consumption of New Zealanders, but this bill does not do it. That group on the Government side of the House has not even got it right. The ready-to-drink alcopops have 5 to 7 percent alcohol by volume, and they are not covered by this bill.

I am pleased to stand up and speak to this bill, and I am appalled at the member on the opposite side of the House. That member is the Opposition spokesperson on health, and did she really show any care about the health effects of alcohol drinking across the board in this country? That member repeated the rhetoric of National’s leader, who came into the House and treated this issue with mirth and hilarity. He is a former health Minister, and I am simply appalled at that attitude.

I support this bill, and I think we need to be very careful. We did not miss the point about the percentage of alcohol by volume that is covered by the bill. As the mother of three young people I have lived through the very difficult challenges posed by young people, who are certainly price sensitive in their drinking behaviour. Let me inform the members of the Opposition that I am very aware of the way that children club together in order to buy drinks such as heavy spirits—the heavy spirits covered by this bill, such as vodka, gin, and whisky. They all drink whatever comes before them, and they are very price sensitive about it. As a mother, I speak from experience on that one.

I support the Hon Jim Anderton in his approach here in this bill, and I am simply appalled at the attitude of the Opposition, which has treated this measure with mirth. This excise tax is only one string in the bow of a public health approach to harm minimisation, and that is what the Opposition seems to have failed to understand. In that bow of harm minimisation is the string of education, and certainly the money taken under this measure will go towards education in the school health curriculum. I thank the Greens for their support for putting more money into drug and alcohol education, and I also thank the alcohol industry, which has worked with us responsibly to come up with a health and education strategy. The industry has put a lot of work into that for us, and I am pleased about that. We are also concerned about advertising on television, because we need to watch very carefully to make sure that the advertising does not make alcohol seem so alluring to young people that they decide it is a sexy thing to get drunk.

I want to discuss the drinking age a little bit. I must point out to the Opposition member Mr Jones that the lowering of the drinking age was not done by this Government. It was done when National was in power. The folly of that decision was that we should not have brought in a change in the drinking age overnight without having a staged implementation—without signposting that that was to be done in 2 years’ time and having upfront drug and alcohol education. That was not done. That is what ought to be done in a public health harm minimisation strategy.

I also want to refer to the Opposition members who opposed the labelling of alcohol. They showed no care for foetal alcohol syndrome, at all. They said labelling was just another cost to the industry and they did not support it. I think that labelling is another intrinsic and important arm of public health education.

I also want to thank the territorial authorities that get behind us with their liquor bans on the streets, because the minimisation of the harm caused by excessive drinking in this country is a community approach that needs to be supported by local government, public health education, school-based education, and what we can do as legislators. The excise tax in this customs bill will give us an extra opportunity in that regard. The Opposition is not surprised that we are here tonight—not at all. We are not rushing this bill through. We will talk this issue through all night long if that is how long it takes. If that is what the Opposition needs in order to understand about public health and harm minimisation approaches, then I am prepared to talk the issue through all night long and not to rush this bill through.