BEER DUTY

Waipa Post, Volume 45, Issue 3213, 6 August 1932, Page 8

BEER DUTY

A SIGNIFICANT COMPARISON.

DECLINE IN CONSUMPTION

The beer duty in New Zealand has lately been made the subject of caustic and indignant comment at meetings of brewery shareholders in various parts of the Dominion, and the Government has been severely criticised for the imposition as " intolerable, unjust, inequitable class taxation." This may be regarded as a form of agitation against the duty which, thoughindirect in form, is scarcely less direct than the vigorous protests that have recently been addressed to the British Chancellor of the Exchequer by the brewery interests in the United Kingdom. The principal difference, however, would seem to be that notwithstanding the fact that New Zealand's financial difficulties are hardly less acute than those of Great Britain, the Dominion brewer has not been asked to shoulder nearly as heavy a burden of taxation as is carried by the industry in the Old Country. A visitor from Scotland, whose intimate connection with the brewery trade in England aroused in him a keen interest in conditions in this country, received a double surprise when he visited Dunedin. He was astonished in the first place to find that the excise duty on beer was only Is 6d per gallon, and was no less surprised to learn that brewers regarded that tax as uni'easonable.

ffn Great Britain, he explained, the increase made in the beer duty lai-t September represented an extra penny per pint, raising the duty on the standard 36-gallon barrel from 123 s to 1345, a per gallon tax of 3s 8 2-3 d. This compared very unfavourably with the charge in New Zealand of 54s per standard barrel, Is 6d per gallon. The anticipation of the trade in New Zealand that the increased tax on beer would defeat its purpose and result in an actual, loss to the revenue has proved false. Owing to a variety of causes, principally to the intensity of the prevailing depression, there was a decline in the consumption of beer in New Zealand of 3,000,000 gallons, a decline which was probably accentuated, but not caused, by the increased duty. The Minister of Finance estimated that the additional beer duty would bring the total revenue from this source to £650,000 for the financial year. It actually produced the useful sum of £641,000. Clearly, therefore, if there had been no further tax there would have been a substantial loss of revenue from beer owing to decreased consumption. The position appears to be precisely the same in Great Britain, where MiNeville Chamberlain has informed the brewers that he cannot afford to hand back to them the £10,000,000, or any great portion of it, that he derives from the beer duty. He anticipated as a result of the extra duty imposed in the Emergency Budget of September last that he would have a revenue of £4,500;000 for the remainder of the financial year. His hopes were fal-

sified, but the duty produced £3,250,000. Replying to many criticisms of the extra duties, the Chancellor pointed out that the argument for a reduction had been that it " would lead to such an increased consumption of beer that the revenue to be obtained wou.d be equal to what it would be if the duty were kept on." But to get the same revenue from the reduced duty, he said, it would be necessary that the consumption of beer should increase by no less than 40 per cent, and he thought that an undesirable contingency which no thoughtful citizen could view with composure.