Increase in alcohol excise tax 'extremely unlikely' - Power

File photo / Richard Robinson

The Law Commission has called on the Government to raise the excise tax on alcohol by 50 per cent but the Justice Minister says that is "extremely unlikely".

Justice Minister Simon Power said the Commission's 153 recommendations "require a considered response" but he has already said increasing the excise tax by 50 per cent - which would push alcohol prices up by 10 per cent - is unlikely to go ahead.

"I have previously made it clear that legislative changes to alcohol laws are likely, and my intention is to deal with this before the end of 2011.

"The Government is carefully considering the report and the response is likely to be framed as regulatory in nature, with an emphasis on alcohol availability and licensing. It is extremely unlikely that the Government will move to raise excise tax as part of its alcohol reform agenda," Mr Power said.

He said he expects the Government to outline its position on the report within weeks.

Law Commission president Geoffrey Palmer warned the Government about "cherry picking the more politically palatable elements" of the Commission's recommendations.

"There is little point in raising the minimum purchase age but doing nothing to stop selling alcohol to young people as the key to social and sexual success.

"Similarly, there is little to be gained from tighter controls on pubs and bars if retailers continue to be allowed to promote heavily discounted alcohol for home consumption," Sir Geoffrey said.

The Law Commission's report, tabled in Parliament at today, included the anticipated recommendation of raising the alcohol purchasing age to 20 as well as closing restaurants and bars by 4am.

Labelling alcohol reform as a "social battleground", the Commission has made 153 recommendations to the Government on liquor law reforms.

The Commission analysed the current liquor licensing system, alcohol pricing and promotions, the responsibility of parents and the negative effects of alcohol on health and crime statistics.

Sir Geoffrey said alcohol can cost as little as $1 or $2 - less than bottled water - and the saturated market had led to intense competition.

"One of the consequences of alcohol being promoted and sold at pocket-money prices is that we risk losing sight of its status as a legal drug, capable of causing serious harm to others," Sir Geoffrey said.

He said the police have told the Commission that alcohol abuse is a "key driver" behind escalating violent crime rates.

Sir Geoffrey said while many New Zealanders drink responsibly, as many as 25 per cent of the adult population drink heavily and many more admitted to binge drinking.

He said 33 per cent of men aged between 18 and 24 reported drinking enough to feel drunk at least once a week while one in five people who had drunk alcohol in the past year admitted to driving under the influence.

"What these figures make clear, is that drinking to intoxication and drinking large quantities remain dominant features of our drinking culture and this behaviour is not confined to an aberrant minority," Sir Geoffrey said.

He said international evidence pointed to raising the price of alcohol and limiting its availability in order to curb alcohol abuse.

"A recommended 50 per cent increase in excise tax would push alcohol prices up by an average of 10 per cent but would differentially target low cost alcohol which is known to drive most acute harm.

"Expert advice we have received from Australian economic consultants Marsden Jacob Associates suggests an average 10 per cent increase in the price of alcohol will result in net benefits to the New Zealand economy from reductions in alcohol-related harm," Sir Geoffrey said.

He said the Commission was targeting young people and made no apology for doing so.

Sir Geoffrey said statistics from the police showed that young people aged between 17 and 19 years of age made up the highest number of offenders who had consumed alcohol before committing an offence.

"In the decade since the decision was made to lower the purchase age, the scientific understanding of the developing brain has advanced considerably. With this knowledge has come a greater understanding of the risks early onset of drinking poses to the adolescent both in terms of acute harms and the longer term risks of dependency.

"We would be negligent if we disregard this evidence in respect of alcohol legislation."

The report has been criticised for making no mention of self-responsibility by Hospitality Association of New Zealand CEO Bruce Robertson.

He said there was only so much suppliers and sellers could do and people had to take responsibility for their own actions.

He said his association supported a law change to make being drunk in a public place an offence.

Mr Robertson said the changes recommended by the Commission will not change "New Zealand's drinking culture".

"People are loading up on cheap booze at home and coming out late at night and getting turned away from licensed premises," Mr Robertson said.

He said 70 per cent of alcohol was purchased from off-licences.

Medical experts have welcomed the commission's report.

National Addiction Centre director, Professor Doug Sellman has called it a "tour de force" and said it is likely to drive change.

"The heavy drinking culture is going to be brought under much greater control and gradually dismantled.

"The brighter future consists of improved physical and mental health for the 700,000 heavy drinking New Zealanders whose drinking will reduce, but even more importantly, it consists of greater safety for everyone from alcohol collateral damage," Prof Sellman said.

He said the Commission faced fierce lobbying from the alcohol industry and advertising industry but nonetheless has taken a courageous stand.

"The starting point for the appropriate evidence-based recommendations in the report is recognition that alcohol is a drug which has the potential for great harm.

"The cost of heavy drinking in New Zealand runs into the billions of dollars the majority of which is picked up by ordinary taxpaying New Zealanders. The brighter future this report will usher in also consists of a reduction in the economic burden of alcohol-related damage on ordinary New Zealanders," Prof Sellman said.

Royal Australasian College of Physicians New Zealand president, Dr Geoffrey Robinson, said the report would change the country's drinking culture.

"Where we were 40 years ago as a tobacco smoking country, is where we are now with heavy drinking," Dr Robinson said.

The Commission's report comes after a three month public consultation process which received 2939 submissions.

Some of the 153 recommendations included in Alcohol in Our Lives: Curbing the Harm

* The introduction of a new Alcohol Harm Reduction Act;

* Raising the price of alcohol by an average of 10 per cent through excise tax increases;

* Regulating irresponsible promotions that encourage the excessive consumption, or purchase, of alcohol;

* Returning the minimum purchase age for alcohol to 20;

* Strengthening the rights and responsibilities of parents for the supply of alcohol to minors;

* Introducing national maximum closing hours for both on and off-licences; (4am and 10pm respectively)

* Increasing the ability of local people to influence how and where alcohol is sold in their communities;

* Increasing personal responsibility for unacceptable or harmful behaviours induced by alcohol, including a civil cost recovery regime for those picked up by the police when grossly intoxicated; moving over time to regulate alcohol advertising and sponsorship.