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Oct 15, 2012

Wine; Another big tax “to make us healthy”

With Swan’s budget surplus becoming more an exercise in semantics rather than realism, there has been plenty of speculation of methods to raise revenue and cut costs for the government.  Both cuts to services and tax increases are unpopular, but the naïve and wowsers in society can approve of the latter if it is on alcohol and it is claimed that they are designed to protect the young from themselves.
This was done not so long ago with the steep tax rises for premixed drinks, predictably to make them less attractive to teenagers.  This according to retailers had a big impact.  Sales of these drinks fell dramatically, accompanied by a steep rise in sales of spirits; people went back to mixing their own and probably drinking more.  Cans of known alcohol content were replaced by glasses of unknown content.
It is hardly a surprise that given the Treasurers need for extra money; a government health agency recommends taxes to increase the price of cheap wine to triple the current rate.  Here’s something appropriate to listen to as you read on:

 From the Courier Mail:
CHEAP wine will be banned under a federal health agency's plan to make drinkers pay at least $8-$10 for a bottle of booze. The Federal Government's Australian Preventative Health Agency will advise this week that a "floor price" and new taxes be calculated as a way to make alcohol dearer. 
The prohibition to stop cheap drunks binging on discount drinks- including cask wine and cleanskins - has delighted health groups but sparked an alcohol industry revolt. Consumers who drink cheap wine are not all drunks, industry groups have told the agency, and not everyone can afford an expensive tipple. 
But the agency found pricing is "recognised as one of the most effective measures to reducing alcohol-related harm.” It has found "strong community support" to change the existing alcohol tax system, so that wine would be taxed on the basis of its alcohol content rather than its price.
‘Price mechanism’ is a much nicer sounding term than a tax; it has a much nicer ring to it.  Every time the government has one of its agencies find a problem, the favored solution seems to rest in increasing the price of something.  The fact that this hits the opposite end of the spectrum is swept under the rug.  The remaining few simple pleasures of pensioners go by the board:
The Wine Federation calculates the price of cask wine would treble to $47.40, and the cheapest wine would cost $8.40 for a bottle of white or $9.60 for a red. And, it warns, that pensioners and low-income families will pay the price of any prohibition on cheap drinks. 
"They could lose one of their affordable luxuries in life," Wine Federation chief executive Paul Evans said. "For the pensioner who might buy a cask of wine with their cheque every fortnight to share with their bingo buddies, this will make it completely unaffordable for them.”
But hey; everybody should be prepared to forgo those little pleasures.  After all; its for the kids, and the government needs the money.  Its either that, or stop promising all of that free stuff.

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