Tax puts industry at risk

Press, 1 September 1989, Page 30

Tax puts industry at risk

The Minister of Finance, Mr Caygill, dropped a real clanger, so to speak, on the wine industry and the wine consumer in the recent Budget. In a press statement on July 27, Mr Caygill said that the Government had decided to reform the taxation of alcoholic beverages to more closely target the factor which gave rise to social costs, namely, their alcohol content. Since July 27, classes of similar

alcohol content have attracted essentially the same rate of tax. What this means to the wine consumer is that he is going to have to pay more for his moderate glass, and I promise you, Mr Caygill has nowhere near finished in a bid to get the price up even more. Again, blind and foolish generalisation has hit the most moderate and gentle of all alcoholic beverages, which leads people such as myself into wondering where on earth such idiotic decisions are made, on the strength of what and wisdom of

whom. What the Government has done is label the wine drinkers, beer drinkers and spirit drinkers as merely consumers of socially destructive fluid. Mr Caygill, I make no apologies in informing you that such a perception is proven rubbish. I am not sure from where you gather the information to make such a decision; I wonder if it may in fact be from a nonconsumer of wine or even a non-consumer of alcohol. I find it also difficult to

discount the possibility that Treasury has fallen for the strong lobbying from the Brewers Association, which has been complaining for quite some time qbout the differences in excise on wine and beer. Such lobbying by the association is founded on sharing the burden of the social costs of alcohol consumption. When it comes to sharing the burden of social costs, Mr Caygill has, I dare say, forgotten the wise words of authorities on the subject like Mr Helmut Becker, whose comments were widely publicised. In Christchurch we also have Professor Don Beaven, who has received Royal recognition for his work on diabetes, Professor Ivan Donaldson, who specialises in neurology, and Dr Graham Watson, who specialises in radiology. All three men are keen advocates of wine, and will assure you that wine is socially less harmful than beer and in particular spirits.

I do sometimes wonder whether the decision to

increase excise on products is linked to their marketability. Wine has become popular amongst the more educated set, and its popularity as a more moderate form of liquor is spreading. I could write page after page about the effects of different forms of alcohol and also how they affect different people, but in brief — New Zealand is the only country in the Western world that has decided to increase its excise on wine.

I think Mr Caygill’s decision desperately needs revising and pretty quickly, before it destroys another industry in this already too hard hit economy.

At this stage, not all is lost, for grabbing a pretty good value wine; in fact, the Renmano Chairmans Selection Bin 104 Chardonnay 1988 is more than that. The wine, Burgundian in style, has great depth of character, great peachy, hints, brilliant wood complexity, and at $l2 is well worth the purchase before it creeps up in price again.