A BUNGLED OPPORTUNITY

For a party that promised no new taxes (apart from a one-off hike in rates
immediately after it was elected), the Labour Party seems to be getting
away with murder.

There have been increases in ACC levies, car registration and petrol
levies, which are all taxes by another name.

Now they have raised another $18 million by increasing the tax on one
particular group of alcoholic-strength drinks, over and above the regular
inflation-linked increase.

The move, made under extraordinary urgency, when Parliament's normal rules
are suspended, was described as a measure to curb binge drinking by young
people.

Yet the new tax - on products with 14 to 23 percent alcohol by volume -
excludes alcopops, which have been fuelling teen drunks in recent years,
but includes sherry, a favourite grandma's tipple.

It can't be avoided that the legislative change was extraordinarily badly
prepared. Surely if teen drinks such as light spirits and alcopops were the
intended target of the tax increase, then the legislation could have been
more specific.

The new legislation is like trying to outlaw cannabis by banning all green
leaves.

Young drinkers are a major problem in our society, nowhere more than in
Hawke's Bay. Yet using a blunt instrument in this way will do nothing to
solve the problem.

Many social drinkers of fortified wine - retirees who have a glass of
sherry before Sunday dinner, for example - will now pay more tax. Why, exactly?

Who knows? But if the legislation hadn't been rammed through the House
under urgency its consequences could have been properly digested and
appropriate amendments made.

The legislation in its present form catches people who weren't the intended
targets, yet doesn't increase above the rate of inflation the cost of
alcopops and beers which are specifically targeted at young people.

However, it will put an additional $18 million tax into the Government's
coffers.

It is hard to know if the Government could really be so inept, or whether
revenue gathering was the intention all along.