In Red Tape by Clyde Mooney

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Global drinks company Diageo and the National branch of the AHA have weighed in on the results of the Federal Senate Committee’s red tape report, with positive signs for diminishing bureaucracy.

Two of the alcohol industry’s biggest stakeholders have come out in support of calls to Australian governments by Senator David Leyonhjelm’s Committee for clearer rationales and evidence-based approaches.

AHA CEO Stephen Ferguson said clear government policy objectives, regarding the purpose of the taxation of alcoholic beverages beyond merely raising revenue, was a key issue identified by the Association.

“As a first step, the Government needs to define any other objectives it is trying to achieve or affect in the process of collecting excise,” Ferguson told PubTIC.

“Such objectives might be related to job creation, business growth, health, social inclusion and so on.”

Following on from the Senate Committee’s recommendation on policy objectives was recommendation to phase in a single volumetric tax, to replace the complex and artificially-staggered tax system across wine, beer and spirits.

Ferguson points out that hotels, many incorporating bottleshops, sell liquor across all of these categories.

“… So the excise issue is front of mind for us, just as it is for the category producers and other retailers.”

As one of the world’s largest drinks suppliers, Diageo brings unparalleled perspective to the debate, and says clearer policy objectives and a volumetric tax are “well overdue”.

Diageo addressed the hearing in Sydney (24 February) and says government must now act on the advice it contains – starting in the upcoming May budget.

“As we said in our submission to the Senate Committee, an increasingly challenging regulatory landscape and ‘red tape’ culture is suffocating the spirits industry, with Australian distillers and consumers currently paying some of the highest alcohol taxes in the world.

“Diageo has long argued for tax equivalence – that is that all alcoholic products be taxed on the amount of alcohol they contain, regardless of whether they are made from grape, grain or distilled.

“Just because you prefer a gin and tonic over a schooner of beer or glass of red, doesn’t mean you should be penalised financially for it. Ultimately alcohol is alcohol and all alcoholic products should be taxed at the same rate.”

Other key recommendations in the report addressed issues such as more sensible settlement periods for alcohol producers, streamlining and simplification in liquor licensing, and inter-state recognition of qualifications such as RSA certification.

Ferguson reports that many of the recommendations are red tape at a State of Territory level, and “constantly being addressed by the AHA”.