Local taxes for health

Press, 27 September 1988, Page 12

Local taxes for health

Professor Don Bea ven’s suggestion of a special tax on beer and tobacco in Canterbury, to help pay the Canterbury Hospital Board's bills, seemed at first a novel way of drawing attention to the Government’s shortcomings in paying to provide health services. Professor Beaven is a member of the Canterbury Hospital Board, which, having been short-changed in population-based funding, has a long-standing complaint against the Government. The board is not alone in being forced to curtail its activities beyond reasonable demands for the greatest possible efficiency. Canterbury’s neighbours to the west are about to lose hospital services at Reefton and Hokitika, and the local communities are staging sit-ins and other protests. Professor Beaven’s proposal seemed to be a similar kind of device to alert the public and encourage it to bring pressure on the Government.

Since floating the idea last week, Professor Beaven has elaborated on the notion. He seems to take it quite seriously. He says that it is logical to make a target of people who are shown to be the heaviest burdens on the health-care system. His proposal is an extreme and selective version of the user-pays principle. If alcohol deserves extra taxes because it is an important factor in the incidence of road injuries, there presumably should be a tax also on youth, because young drivers undeniably are a greater risk to themselves and others than are older drivers. A rebuttal might be that young drivers cannot help being young; it does not refute the argument, which is about the driving habits or abilities of many young people, and these are qualities that can be

changed. Professor Beaven’s idea overlooks the fact that alcohol and tobacco are subject already .to swingeing 1 taxes and the greatest share of all taxes goes to social welfare. The Health Vote gets a large part of this money, though the boards are complaining that it is not a large enough part. This year the excise duty on alcohol is expected to raise $3BO million and the excise duty on tobacco a further $465 million. Road users further contribute to the Government’s revenue in motor-vehicle and petroleum duties, and again part of this is available for spending on health. The people at whom Professor Beaven points as being the heaviest burden on the health system are already subject to special taxes that will yield at least $l7OO million this year.

The most serious objection to Professor Beaven’s proposal is that it transfers some of the responsibility for health services from the Government to local communities and provides an excuse for the' Government to reduce further its commitment to health spending. The Prime Minister, Mr Lange, promised the country in the last General Election campaign that a Labour Government would provide the “best health service that money can buy.” The proper course is to remind the Government of this pledge; an alternative source of revenue should not be created to get the Government off the hook. Even if Professor Beaven’s suggestion could be made to work, as a local tax to benefit local people, and that is very doubtful, it would not be in the best interests of the health services or the patients. Taxes imposed on drinking and smoking have to be national taxes.