Tax ‘not needed’

Press, 26 September 1988, Page 7

Tax ‘not needed’

A “beer ana oaccy” tax proposed by a Christchurch wine connoisseur was unnecessaary, said the Minister of Health, Mr Caygill, last evening.' “There is already a tax on alcohol and tobacco paid for by consumers. It is called an excise duty, and it applies to alcohol and tobacco as well as cars and petrol,” said Mr Caygill. Mr Caygill was commenting on suggestions by Professor Don Beaven, a member of the Canterbury Hospital Board and wine industry critic, that a beer and tobacco tax be implemented to help fund the region’s health services. Mr Caygill said the Government collected “several hundred million dollars” through the excise duty, of which most was spent by the Government on social services such as health, education and social welfare. “I do not see a need for another new tax, when we have one already.”

“Besides, the price of cigarettes is due to go up again before the end of this year and once more early next year.” The excise duty helped the Government to defray the extra costs to society that smoking and drinking caused, most notably to the health system, said Mr Caygill. Whether the existing level of duty was high enough and where the money should be spent were, however, questions that were reasonable for people to discuss, said Mr Caygill. Consumers might not be aware they were paying the tax as the duty was “wrapped up in the price” of the product, rather than being separately included like GST. The rates applied differed.

The tax on alcohol was being reviewed by a committee set up by the Minister of Inland Revenue, Mr de Cleene, said Mr Caygill.