Senate Inquiry into RTD tax begins today

Posted by Daniel Palmer on 11th June 2008

The Senate Committee Inquiry into the proposed tax increase on “alcopops” begun this morning in Canberra with the public hearing, held over the next two days, to have evidence provided by 17 groups (mainly from health and alcohol sectors).

The Community Affairs Committee is due to report on ten issues relating to the proposed tax increase on ready-to-drink (RTD) alcoholic beverages. The primary issues are: the likely effect of the scheme on RTD consumption prevalence, the modelling underpinning the Government’s revenue estimates and the impact on patterns of consumption in terms of the effect on total alcohol consumption.

The bill proposed by the Labor Government, which Coca-Cola Amatil have claimed could cut sales of RTD alcohol spirits by up to 10%, is expected to earn the government about $2 billion over the next four years. However, there has been criticism that the tax is nothing more than a revenue raiser with expectations of tax receipts by the government indicating they do not expect taxes to fall. Consequently, it will be very interesting to see the inquiry’s findings into the modelling of tax estimates by the Government.

Federal Liberal Party leader Dr Brendan Nelson has indicated that the coalition will use their high senate numbers to block the RTD tax. “This is nothing more than a tax binge falsely presented to Australians as a health measure. We will oppose it,” he said.

The Committee received 34 written submissions in response to the inquiry and are due to report back to the Senate by June 24.