Customs and Excise (Alcoholic Beverages) Amendment Bill

With most bills, the schedules are passed over relatively easily, but it is not so with tax bills. It is not so with a bill that has not been to a select committee and contains some substantial tax increases for people who wish to drink things such as dessert wine, port, and sherry.

I want to raise some issues that occur in schedule 2, concerning a range of categories, which I will read out so that the Minister and his officials can follow: 2208.90.56, 2208.90.60, and 2208.90.67. These three categories relate to categories of alcohol. The first is drinks containing more than 1.15 percent alcohol by volume but not more than 2.5 percent. That is a very low alcohol volume, and I am told that those are commonly called alcopops. The next one is drinks containing more than 2.5 percent alcohol by volume but no more than 6 percent, and that is mixed, ready-to-drink alcohol, which is vodka and orange juice, or whatever. The next section is drinks containing more than 6 percent alcohol by volume but no more than 9 percent, and those are also ready-to-drinks, but are stronger than the previous category. Those are the three commonly used drinks of choice of young people.

The schedule shows that those three items—young people’s drinks; young people over 18—are to go up by the rate of inflation. Item 2208.20.29, which is drinks that contain more than 23 percent alcohol by volume—rum, whisky, bourbon, vodka, etc.—is being held at the same rate, but adjusted for inflation. The explanatory note of the bill states that it will deal with those drinks with an alcohol content of between 14 and 23 percent, yet those drinks do not appear in schedule 2.

💬 Hon Jim Anderton: I have already answered that.

I would be keen for him to answer it again, even if he takes just a short call, because I must have popped out of the House.

💬 Darren Hughes: His Hansard will be available tomorrow.

Members can laugh about it, but let me tell them that when the bill was faxed to one of the largest liquor stores in New Zealand, and the owner went through the schedules, he could not determine where the drinks that are supposedly being targeted were in this schedule. He went through schedule 2 and said that they were not there. I want an assurance that they are there, because the explanatory note of the bill states that that is where they are being targeted. They certainly do not appear in schedule 2. I understand that some appear in schedule 1. The issue there, I am led to believe, is that schedule 1 covers drinks with 14 to 23 percent alcohol by volume that are New Zealand – made. What was put to me tonight by that person in the industry—

I hope that the Chair is taking advice on the points raised by Mr Sowry, because I was following them and if they are correct it would appear that the Government has made a mistake. That is one reason that putting legislation through under extraordinary urgency is not a great idea. Members might be interested to know that the United States, for example, which has regular tax bills, does not put them through under emergency urgency. It has never found that there is a great problem with people rushing out and buying every bottle of alcohol. This extraordinary urgency is a nonsense. I suspect the real reason we are doing this is that the Government knows the bill is bad news, and wants to get it over with as soon as it can and do it now so that it does not overshadow the Budget.

We have been told that the whole purpose of this bill is to prevent teenagers from drinking. If we look at the schedules to see what the measures for increased tax are, we see that the first item is ice cream. I have asked whether there is any evidence of any teenager being admitted to hospital for having eaten too much ice cream containing alcohol. The next one is “Food preparations not elsewhere specified … containing alcohol, which if imported, would be classified with Tariff item 2106.90.98:”. That must be Christmas cakes with rum in them.

💬 Hon Ken Shirley: And chocolate.

And chocolates. Is there any evidence of teenagers being seen staggering down the road after eating alcoholic chocolate? The next one is “Wine of fresh grapes, and grape must with fermentation prevented or arrested by the addition of alcohol, including sparkling, fortified and table wine which, if imported, would be classified within Tariff item 2204.21.13”. Again, I ask how many teenagers drink that sort of beverage. The fourth one is vermouth. There might be some teenagers who drink vermouth but I do not, myself, think so. I do not believe that that is a drink of choice. The next item is “fermented beverages (for example, cider, perry, mead)”. Again, I do not believe that those are drinks bought by teenagers. The next one is “Liqueurs, cordials, and bitters”. There might be some young ladies who occasionally drink those. That is the first schedule, but nowhere can be seen the items that United Future tells us are the reason it is supporting this bill.

This bill is a tax bill. The Committee would feel better if the Minister would tell us the true facts. The true facts are that he wants to raise another $18 million, and the Government has come up with a great idea. It has found a bottle of gin that is, it says, 23 percent alcohol. It cannot actually produce one, but it says this is a terrible loophole that must be closed. I ask the Minister where in the first schedule is that bottle of gin? I say to the Minister that it is not there at all, is it.

💬 Hon Jim Anderton: It is.

Where is it? Is it under “Ice cream” or “Food preparations”?

💬 Hon Jim Anderton: Keep going.

The wine of grapes?

💬 Hon Jim Anderton: “Containing more than 14% vol., but not more than 23% vol.”

Which one? Perhaps the Minister would like to take a call, because I am suggesting that this is a tax that will hit, principally, superannuitants. The Government knows that. I do not know whether Government members knew it when they introduced the bill, but they know it now.

I say to members opposite that that is just the first schedule, but one could make very similar observations about every other schedule. They will find that the first item is ice cream. Where is the great problem being caused by ice cream? This Government is actually increasing the tax on ice cream. There is no doubt that that is what it is going to do. I would like to know how much money it expects to raise from it. How big a problem is it when one sees Baileys ice cream in the supermarket? Is that what the member is referring to? I very much doubt it. I believe that the Government is using this mythical bottle of $9.99 gin that apparently has 22.9 percent alcohol in it, which it cannot actually produce—

There was a time, when I was formerly a member of Parliament, when the first reaction of people on this side of the Chamber, to any legislation of this kind, would be: “What about the workers?”. I have heard nothing from this Labour Government that shows it is standing up for the workers. Government members have forgotten about the workers. I heard that sort of speech so many times from this side of the Chamber, especially from the Hon Richard Prebble, time and time again, monotonously—

💬 Hon Richard Prebble: What did we say again? What about the workers?

Yes, what about the workers? This minority Labour Party Government, supported by United Future and the Greens, is showing in this bill that it has no regard for the workers. Those people who are now retired, who have been workers but are now superannuitants, and those people who are now workers, might want to share in this mythical 22.9 percent bottle of gin, if they could find it. What this Government is doing is depriving them of enjoying a cheap gin. It is preventing them from enjoying that drink. What about the workers, if there is a whisky below 22.9 percent? It will be going up in price by 80 percent. What about the workers who enjoy a whisky at 22.9 percent, or a gin, or whatever?

💬 Hon Richard Prebble: No one is going to drink 32 percent alcohol gin any more; they’re going to drink 33 percent alcohol, aren’t they?

There is no distinction now. It seems that if it is over 14 percent one might as well try to drink the really top-shelf stuff, if one can afford it, bearing in mind that it starts at a higher price range. I say to this minority Labour Government, and to the workers of New Zealand, that if they do like the mythical cheap bottle of gin, if they do like any mythical cheap bottle of whisky, this minority Labour Party Government has just about doubled their tipple tonight. We will be reminding the workers of New Zealand about that time and time again.

There was a time when the Hon Jim Anderton worked very hard for the workers of New Zealand. I remember how hard he used to work canvassing in Helensville, and I recognise his concern for the Labour Party and how hard he stood up for the workers. Tonight he is in his swansong term in Parliament, selling out on the workers of New Zealand. He does not care about them any more. He has come into the House time and time again on the back of the workers of New Zealand. What is he doing in his last term in the House? He is selling out those workers. The minority Labour Party Government does not care about them any more. Of course, United Future does not care, anyway. It has found the mythical bottle of gin. It is almost like a Holy Grail tonight.

I wish we could find that mythical bottle of gin. Members opposite do not care about workers or retired workers who want their port and their sherry. I can imagine all the old ladies and men going to the bottle store on Friday or Saturday, handing over the bottle and their $5, and, instead of getting a full bottle, getting only half a bottle. They will say: “But I gave you $5. Where’s my full bottle?”. I suspect that the answer at every bottle store will be—the Waitakere Licensing Trust, the Portage Licensing Trust, or anywhere—“Thanks to the Labour Party, you’re now getting half your flagon, half your half-g, or whatever. That’s their present to you, leading into a cold winter. They’re cutting your rations by half.” They are people who fought for this country, who worked hard for this country, and are now retired. That is the present to them from this minority Labour Party Government. Many of them are staunch workers.

I can imagine the people on the West Coast who have supported the Labour Party day in, day out, all of their lives. They look forward to a little tipple, but what is happening? Thanks to Jim Anderton, thanks to Helen Clark, and thanks to all those members opposite, that tipple will be cut in half. They do not care about the workers. They do not care about elderly people on low incomes. The Hon Jim Anderton can shake his head until it falls off, but that is the fact of the matter. He does not care about those people. There was a time, as I say, when people like Mick Connelly—do members remember Mick Connelly?

💬 Rt Hon Winston Peters: A great man.

Time and time again Mick Connelly would go on and on, on behalf of the people of Wigram. Who represents them now or has represented them? I can remember Mick going on and on. No one ever took any notice of him, but he went on and on and on. He could go on for half an hour. I am doing this for only 5 minutes. Mick could talk for half an hour and seem as fresh as—

💬 Rt Hon Winston Peters: The workingmen’s pleasures.

The workingmen’s pleasures are all gone. The likes of good old Gordon Christie—Curly, more hair than brains—

💬 Rt Hon Winston Peters: Real men.

Yes.

I want to know what Mr Anderton meant as he sat in the Minister’s chair and scoffed at the suggestion that he was not there for the workers. This bill will, potentially, put at least 200 workers out of a job. These schedules will shut down the only alcohol company in New Zealand that produces and bottles in this country low-alcohol spirits. This bill will shut that company down and 200 workers will be gone. That is the care.

For those who do have a job and who continue to work, I want to pick up on the point that Mr Prebble made in regard to ice cream. I can tell those workers that when they get home from a hard day’s work they can have a little bit of alcoholic ice cream that does not have a big tax on it, provided that it is very heavily laced. I read these schedules, and perhaps the Minister might like to tell us what the story is here, but there is a rate for ice cream containing more than 1.15 percent, but not more than 2.5 percent. There is a rate for ice cream containing 2.5 percent by volume, but not more than 6 percent. There is a rate for ice cream containing more than 6 percent by volume, but not more than 9 percent.

💬 Darren Hughes: What a surprise, the member is focusing on ice cream.

The member across the way there, the great white hope for the Labour Party, Mr “Dazza” Hughes, sits there laughing and guffawing at the prospect that he may soon get out of this Chamber and go back to his little nest somewhere and get a big ice cream out of the fridge, because young people his age just love to suck on ice cream, and there would be no one who does it better than Mr Hughes. It is a shame that Mr Hughes takes so many lessons from Clayton Cosgrove on how to be a member of Parliament. As I said earlier, Clayton Cosgrove has a huge reputation for sending along an apology to people in his electorate before he gets an invitation to visit, and Darren Hughes is starting to emulate him. But I want to tell Mr Hughes that there is a rate in schedule 2 for ice cream containing alcohol at a volume of between 9 percent and 14 percent. It then jumps right up to ice cream containing more than 23 percent. So I am assuming that there is no rate in here for 18 percent alcohol by volume of ice cream, or 19, 20, 21 or 22 percent; or 15, or 16 percent for that matter. So there is quite a broad range of alcoholic ice cream that one can import and make in this country that seems to have escaped the pernicious tax being imposed by the Government this evening.

My colleague Roger Sowry has been in contact with the industry throughout the evening listening to its concerns, and he confirms that, in fact, there is a loophole. It would appear that in the very near future dairies maybe have to become R18, because we will get hordes of alcohol-craving youngsters going into the ice cream shops asking for two and three scoop 18 percent ice creams so they can get their fix because they no longer have access to a low-alcohol product anywhere else. That might seem extreme, but then anything this Government, in fact, does seems extreme according to the main.

On going through the schedules I find there is another point that I want to ask the Minister to clarify. It relates to the coding in the schedules. Schedule 3 talks about a preferential tariff “CA Free”. What does CA Free mean? We are talking about, once again, would members believe it, edible preparations, ice creams, and other edible ice, whether or not containing cocoa, which is a worry. Is this a precursor of a cocoa tax coming shortly? I am not sure. It states, in relation to alcohol: “Containing more than 14% vol., but not more than 23% vol. per l al 7 CA Free.” Every other tariff rate in this legislation has a dollar amount alongside it. But what we have here is CA Free. I would like to hear from the Minister what it means.

I will deal with just two issues. Mr Prebble was worried about spirits and spirituous beverages in schedule 1—that is, 99.45, and 99.45.86F containing more than 14 percent volume, but not more than 23 percent volume. Mr Brownlee was very worried about ice cream with alcohol content of 14 to 23 percent. That is in schedule 1. It is actually the first item: “Containing more than 14 % volume, but not more than 23 % vol.” The member has to read it.

If the Opposition wants to blame anybody for this bill it should blame the liquor industry. If Mr Brownlee is worried that this will shut down part of the industry, then I for one am not unhappy about that. I hope that every time we look at one line of the schedules we see that as a sanction on the liquor industry, because the industry has tried to exploit our young people, the ones for whom this bill is necessary. The production of 23 percent proof alcoholic beverages in order to target our young people is absolutely irresponsible. The fact that the industry has targeted them at 23 percent—1 percent below the threshold at which the products would be taxed—just shows the extent to which it is prepared to go to put profits ahead of any degree of social responsibility. If our liquor industry had some sort of social conscience and looked at the effect of its products on our young people, we would not have to take this sort of action to curb what it is doing.

I am delighted that our society is moving away from the single bottom-line approach towards the triple bottom-line approach—a bottom-line approach to profits that looks not only at economic benefits but also at environmental and social benefits, and gauges its businesses on the basis of how they are performing on each of those indicators. I am delighted that my legal practice was a foundation member of Business for Social Responsibility set up by Dick Hubbard. I believe that is the way for the future. In fact, I know that internationally there is a tendency for businesses that are socially responsible actually to perform better in terms of profit than other businesses. I believe that is to be commended.

What we have in the liquor industry is a “Business for Social Irresponsibility” approach, because it is not taking into account the effect that this is having, particularly on the social environment in which we live and particularly on our young citizens, who are being sucked in by these methods, simply so the industry can make extra profits. That is irresponsible of the industry. It needs to be taken to task. It should take a good look at itself in the mirror, when it looks at the bill and worries about the effects this legislation might have on its bottom line. Maybe it should take a different attitude towards business.

We have been talking about ice cream products containing alcohol. The fact that ice cream is listed in this legislation shows the extent to which the liquor industry is prepared to go to bring our young people into a liquor situation. The fact that chocolates and other products are targeted shows the extent to which the industry is prepared to take something that we all consider to be good and healthy for our families, and put liquor into it to try to trap people into the liquor industry. I understand from my colleagues that John Carter has challenged United Future to name at least two ready-to-drinks that would be caught by this bill. I can do that for him. We have Bully Hayes rum-flavoured general alcoholic beverage and Kristov’s vodka-flavoured general alcoholic beverage. It is noted they are rum flavoured because they are 23 percent, whereas if they were a little higher in content they could actually be called rum. But they have to get sophisticated labels for these things in order to comply with other legislation. So we do know what we are talking about.

Ever since Parliament lowered the drinking age, and provided a financial windfall for the liquor industry, the community has experienced these problems. I did not vote for that change to the legislation. I wish I had been in the House at the time the lowering of the drinking age became law. It will not surprise any member to know that I, and many of my party colleagues, would not have supported the lowering of the drinking age. The change has opened a Pandora’s box. We are seeing drunkenness among our school children and more social problems. That is exactly what happens when we start making changes in this Parliament that are wide ranging but without having adequate consultation about the effects of those changes. That is exactly what will happen if we pass the prostitution legislation. We will open another Pandora’s box. We will find that, just as with the liquor industry, people will exploit for all its worth, the open attitude of this House.

I know that the last speaker was probably very well meaning, but I have to say that some of the points he made are misguided, at best. The liquor industry is not out there to do Satan’s work. The liquor industry is not out there to entice young people to drink themselves into a frenzy. The liquor industry does not provide liquor to ice-cream companies with the express aim of trying to lure people into alcohol consumption. The liquor industry provides alcohol to ice-cream companies so they can produce ice creams that we, as adults, like to eat. Mr Benson-Pope sitting over there will be well aware of a company in the Dunedin area called the Gourmet Ice Cream Company, which makes a wonderful range of alcoholic ice creams that, eaten in moderation, certainly do not affect the brain at all.

The whole idea that somehow children will eat enough ice cream to have that effect, indicates that the member from United Future has lived a very sheltered life. I ask him whether he seriously believes that a total ban on alcohol will make one iota of difference to the community. He should look at what banning alcohol did for Chicago in the 1920s. It did not change anything. It just drove it underground.

It is very interesting to look down the long list of products in the schedule and note the changes. It is clear that none of the products that United Future members thought would be included are there. I feel sorry for those members, because I think their arms have been twisted. They were convinced that supporting this bill would be a good thing for the community in terms of what it will do for young people. One of the aspects of the bill that has been made quite clear by members on this side is that the bill is nothing more than a tax bill. It will not make any difference to the amount that teenagers drink. If we look at the alcohol that will largely be captured by this legislation, it is all the stuff that many senior citizens would be quite happy to consume. As mentioned before, when I drink sherry and vermouth I am usually at my grandparents’ house, and I quite enjoy drinking that with them. However, it is quite laughable to think that those drinks would ever have been an option when I was in my teens and 20s.

In terms of the real change that it is claimed the bill will make, it simply will not deliver. It is interesting that cordials and bitters are included in the schedule. I cannot think of any alcoholic cordial, unless the recipe for Jungle Juice or Refresh has changed over the years. As I said, a number of these alcoholic drinks are consumed by senior citizens. It is a sad day for the Labour Party, because not only is it adding a tax to a number of alcoholic beverages that are consumed by a lot of seniors, but also it is spoiling their fun altogether by wanting to ban smoking in their Returned Services Associations, and ban a whole lot of things that these older people are used to doing.

I have a few questions about the schedule. There are some things that I am not quite sure about. I wonder whether the Minister could take a call and tell me what “undenatured ethyl alcohol” is. I am not sure what the undenatured bit means. I also do not know what “perry” is. It sounds a very unusual drink. Of course I am aware of “mead”, but, once again, I have to say that I cannot think of any teenager going out on a Saturday night with a flagon of mead, let alone a flagon of cider, sherry, bitters—or cordial for that matter. They are hardly the beverages of choice for enthusiastic teenagers.

I move, That the question be now put.

A party vote was called for on the question that the question be now put.

I raise a point of order, Madam Chairperson. Mr Anderton just voted for two votes in favour. I want to know where his second vote is.

If the member had been here during the day he would know that Matt Robson has been here all the time. He is not here at the moment, but I am sure he is in the precincts of the House.

Matt Robson must be here to cast a vote. Where is he now?

The CHAIRPERSON (Ann Hartley): Would the member please be seated. I want to rule on his point of order.

I had not finished my point of order.

The CHAIRPERSON (Ann Hartley): Would the member please be seated. I will rule on his point of order.

What point is that?

The CHAIRPERSON (Ann Hartley): The member’s point of order on whether it was correct under the Standing Orders for the Hon Jim Anderton to vote on behalf of Progressive. I am ruling on that.

I have not finished my point of order. Will you sit down and I will finish it.

The CHAIRPERSON (Ann Hartley): I ask Mr Peters to please be seated. The member has raised his point of order. I am ruling on it. That is the end of the matter. If the member has something more to add—

I do not need your warning. You have been here 5 minutes and you warn me about making a mistake in my point of order. Perhaps you should now rise and tell me how I made a mistake here. If you are to give me a warning I must know what the parameters are. It is now your turn.

The CHAIRPERSON (Ann Hartley): Would the member please complete his point of order.

No, you gave me a warning. Finish off your warning. Why do you say that to me? Tell me, now.

The CHAIRPERSON (Ann Hartley): I am ruling on your point of order.

Are you clairvoyant? I have not finished my point of order.

The CHAIRPERSON (Ann Hartley): Mr Anderton quite properly under the Standing Orders cast the Progressive vote. I ask the Clerk to please continue with the vote.

I have asked Mr Anderton to tell me where Mr Robson is right now.

💬 Hon Mark Burton: I raise a point of order, Madam Chairperson.

Sit down! I am finishing my point of order.

💬 Hon Mark Burton: The member didn’t call for a point of order.

She has asked me to finish my point of order. I was trying to finish my point of order and he had the audacity to rise and you did not stop him.

The CHAIRPERSON (Ann Hartley): I ask Mr Peters to please complete his point of order.

I was speaking to the point of order. That member might be the Minister of Defence, but he should keep quiet while I am talking. It is clear as daylight that if Mr Robson is to have his vote cast by his leader, then he must be within the parameters of Parliament. My point of order is would Mr Anderton please tell me where Mr Robson is right now. Standing Order 157(3) states: “In the case of a party vote or a personal vote following a party vote, a proxy may be exercised for a party consisting of one member and for any Independent member only if the member concerned is—(a) present within the precincts of Parliament,”. Is he here or not?

Mr Robson was here very recently and I am speaking on his behalf.

💬 Rt Hon Winston Peters: Is he here or not?

Yes, I am of the view that he is here. That is why I voted for him.

Rt Hon WINSTON PETERS (Leader—NZ First): I asked Mr Anderton to tell me not whether he was here but whether he is here, in terms of Standing Order 157(3)(a), “present within the precincts of Parliament,”. That is not a past tense. It is now.

I want to advise the House that the reason this has been raised is—I did not personally hear it, but the Hon Ken Shirley tells me this—that when Mr Matt Robson left, he said: “I’m off.”, and left a clear impression in the minds of our members that he meant he had gone home. I think we could take it that he has, because Parliament is still being broadcast. You can bet your sweet life that if he was here, given the amount of time we have taken, he would have arrived. It is clear from Mr Anderton’s statement that he just voted for him cavalierly, and I suggest that the easiest way would be for Mr Anderton to decide to change his vote.

I would suggest that Standing Order 157(2) is the relevant Standing Order. It clearly states: “In the case of a party vote, proxies may be exercised for a number equal to no more than 25 percent of a party’s membership in the House but at least one proxy may be exercised for a party.” Mr Anderton cast the proxy for the absent member.

Under Standing Order 145, Mr Anderton, as leader of the party, is the authorised person to cast that vote. Mr Anderton has cast the vote. That is his word, and his word is accepted.

I raise a point of order, Madam Chairperson. Mr Peters accused me of lying. I ask that he withdraw and apologise.

There are two factors here that have been fundamentally upheld by this House over and over by presiding officers. Firstly, if a whip or a leader casts a vote, their word must be accepted. Full stop. Secondly, whips do not require written proxies to vote in regular votes in this House, and they never have.

Perhaps Mr Robson might like to assure us that he was within the precincts of the House when the vote was called.

Mr Anderton’s word is properly accepted. That is the end of the matter.

I raise a point of order, Madam Chairperson. The fact is that Mr Robson was in his room, which is exactly where I thought he was. I could not prove it, but I would have dealt with that if we had to deal with it. But I come back to the point. Mr Peters accused me of lying. I heard him say it, and I suggest that many other members did too. I ask you to ask him to withdraw and apologise.

The CHAIRPERSON (Ann Hartley): I am going to deal with Mr Peters.

When a leader of a party rises and deals with a fact so cavalierly as to say “I think he was here; I am not certain where he was.”, he certainly opens himself up to accusations of being so careless with the truth that it is a mere bagatelle to him. That is my point. He must have known where Mr Robson was—the one colleague he has left. He must have pointed it out and been certain about it, but he was not, and it was mere serendipity that he walked in here late at night and saved Mr Anderton’s bacon. I do not intend to apologise for saying that.

The CHAIRPERSON (Ann Hartley): The matter is over. The vote was cast correctly. Offence has been taken. Mr Anderton’s word was doubted, and I ask Mr Peters to stand, withdraw and apologise.

No, I will not. I doubted his word properly. He can prove that I am wrong, but I doubted him properly.

The CHAIRPERSON (Ann Hartley): Mr Peters, I would ask you again to withdraw and apologise for saying the word “liar” to Mr Anderton.

I asked him to find where his colleague was. He had no idea where he was. I was quite proper in raising the question.

The CHAIRPERSON (Ann Hartley): I will say again to Mr Peters that offence was taken. The member did doubt Mr Anderton’s word and I would ask him to withdraw and apologise.

No, Madam Chairperson, read the Standing Orders. On a vote we are entitled to doubt a member’s word. I am sorry, but you have been misadvised. I am entitled to doubt a party’s word. The whole of the Standing Orders say that. That is why they have a personalised vote.

The CHAIRPERSON (Ann Hartley): The member called him a liar.

I am sorry for that part. I apologise.

The CHAIRPERSON (Ann Hartley): Thank you. That is what I wanted.