Blogging politics, culture, sociology and life from Brisvegas
Peter Martin demolishes the Liberals’ “reasoning” for blocking the Alcopops tax. What’s left of their “economic management” cred?
Interesting to read that teh Glenn Milne line is that Malcolm Turnbull’s come off even worse than Brendan Nelson in the budget stakes through his grandstanding and inability to make any sense on the economics. I wonder if Milne is still on the Costello dripfeed?
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spot on, Peter Martin
But will most people grasp the difference between ABOLISHING xxx and REDUCING the GROWTH in xxx?
i dunno
The Swann/Rudd budget hasn’t ABOLISHED solar PV, but has means-tested a generous subsidy. This is likely to REDUCE the GROWTH of solar PV installations on private homes.
Er, an 11 year record of excellent economic management that only the willfully blind refuse to acknowledge?
Mind you, the people behind that are gone now. Peter Costello provided more opposition in a five-minute door-stop last week than the combined front bench has managed in six months.
I can’t say I’m sorry to see solar power subsidies wiped out (and the effect of the change is not to reduce it, but to wipe it out). Only people who have substantially paid their mortgage will entertain solar electricity and by then they’re earning over $100k. It was a losing proposition even with the subsidy, now it’s prohibitive. Come back when it’s economic please.
The buyers’ remorse around work was palpable this week. They’ve got two years to sweeten the swing voters up again, but people around our work will be reminded of this budget five days a week every week of the year until then.
Excellent news! The longer the Liberals take to switch to Turnbull, the longer it is before they find out what a flake he really is.
The most over-rated individual in politics at the moment.
Geez, Craig Mc, do try not to bore your workmates too much by talking about the 2008 budget every working day of April 2009 for instance!
Ha! I’ll limit myself to cursing Wayne Swan at the cafeteria cash-register.
Go out for lunch! If your work “cafeteria” is anything like those I’ve experienced in my working life…
“Proposed” tax hike?
The tax increase was immediate, simultaneous with Rudd’s announcement a couple of weeks ago.
Personally I think the tax increase is fantastic, for a whole bunch of reasons.
Economic management credentials the Liberal party don’t have to worry about for a while. It is the Labor party whose record is.. er.. an historically unhappy one, now is their chance to prove they have got what it takes to handle the chequebook.
Alas, total lack of opposition is not stimulating for a government, *sigh*.
It isn’t indeed!
There is ample scope for there to be a serious debate about whether Rudd/Swan are doing the right thing in economic and social policy both. But we’re not even scratching the surface with the complete nonsense coming from the Opposition.
Not sure if the cultural logic works out of more expensive drinks less alcohol consumption. The cost of a drink (or anything) is itself a signifier.
Increasing the cost could do a number of things. Make the drinks seem more desirable, or get more young people (mostly women, as this is clearly gendered) pissed off with the stupid moralising behaviour of the government.
Why not target the masculine drinking culture instead of this alcopops bollocks? Why just alcopops?
Craig Mc,
The solar PV subsidy remains for some folk; it has been wiped out for folkk with higher incomes. Existing solar PV setups will continue to generate power for their owners. Long into the future.
Solar PV hasn’t been abolished. The GROWTH in its use by private home owners will undoubtedly reduce. The salesa figures p.a. may be expected to be lower. (First derrivative of number of installations will be lower.)
Similarly with alcopops: the GROWTH in sales figures is likely to decline. First derivative of annual sales figures expected to decline. Analogy not very good. As usual.
cheerio
can someone please end my confusion on Solar panels. I installed a solar hot water system last April and there was already a means test to $100000 attached by the Howard Govt. What now is different to last year?
So, Mr Swan has had first hand experience with the Alcopops! What is he going to do now when his “experience” will now be with other alcoholic substances, like wine, etc. Will he put up the tax on that. I think the whole tax stuff is a bad move as it will shift the binge drinkers onto something worse and for those people who enjoy a glass of wine, etc. putting up the tax effects them, and they don’t binge drink.
“The tax hike will raise money from people already addicted, while dissuading potential addicts from trying it out.”
I’m not sure that Martin is correct in framing this in terms of addiction. It may not be central to his argument, but there doesn’t seem to be much insight into the behaviour informing his analysis. Certainly alcohol addiction is real, but the bulk of binge-drinkers are not addicts. Or am I missing the research that suggests they are?
If you plotted out binge drinking behaviour ethologically, as compared with alcoholism, the shape of binge drinking events is not necessarily the same as addiction. One may lead to the other in a certain percentage of people involved. I say let’s look more closely at binge drinking events, and then let’s look at other, already-existing examples of ‘good’ drinking behaviour. How do they differ? In what ways are they similar? Where can policy be applied to encourage one and not the other?
As glen suggests, we are talking about cultural change. While I have no objection to making taxation on pre-mixed drinks uniform with that on other alcohol, I think there is a confusion in this policy between the signs of cultural change - ie decreased rate of growth in consumption of drinks consumed by ‘the young’ - and real cultural change itself. The decrease in growth rates of consumption forecasted may in fact signal a cultural change if it comes about, but I can’t help thinking that any change will be used as ‘evidence’ by Rudd et al that they have addressed the problem, when they may not have addressed it at all.
Craig - so what are you saying? That we shouldn’t tax cigarettes, because that simply drives potential cigarette smokers on to marijuana?
We have had - under governments of any hue you fancy - a tax system which is largely predicated on the idea that taxing items which do social harm (gambling, smoking, alcohol, speeding) is morally acceptable.
People still smoke, gamble,speed and drink - although arguably in lesser numbers than they otherwise would - but the social harm this causes is mitigated to some extent by the fact that they are subsidising the taxpayers for their behaviours.
Are the conservative side of politics seriously going to argue that these taxes should be removed or reduced, on the dubious argument that the people targetted will move on to another area of misbehaviour?
An underlying fundamental of economics is that price acts as a deterrent. Of course, if you want to trash four centuries of economic argument in defence of alcopops, don’t let me stop you.
aj
Solar hot water subsidy has not changed (I think). Good on you for installing it.
Solar PV means solar photovoltaic - which generates electric current (electric power) which may be
1) used in household appliances
and/or
2) fed back into the grid (local power supply) to be used by other consumers.
As I understand it, the solar PV subsidy is now means-tested but was not, before the Swann budget.
Separately, there is now a “feed-in tariff” in Victoria (for example), where a home owner would be paid 60 cents per kWh (4 times what she is charged for electric power) if her excess generation “goes into the grid”.
See the thread “Killing solar PV softly”.
cheers
Thanks ambigulous
I didn’t comment on the alcopops policy, however…
Taxes on spirits remain unchanged. Taxes on soft-drinks and mixers remain unchanged. Taxes on pre-mixed drinks has soared. What do you think the logical result of that will be?
Ask an economist outside Australia how they rate the last 11 years and phrase your reply in relation to Australia’s inflation figures in comparison to the OECD average.
Blind?
Refuse?
I do apologise, Craig - I’ve got the flu and my brain is at less than usual capacity.
I meant Glen. At least, I think I meant Glen.
I’m going back to bed.
The political expediency of blocking the “alcopops” aside, I do think that there is an element of “wowserism” and “Daddy knows best” to the Rudd government increasing taxes on this class of alcohol sales.
I would be interested to know where the hard data is:
1) linking this level of tax increase with a comensurate decreased uptake of these products,
2) demonstrating that consumers will simply turn to unmixed spirits instead,
3) showing that tax revenue collected from this increase will be substantially spent on education campaigns,
4) linking this class of alcohol products to the “binge drinking crisis”, the “war on binge drinking”, the “teatotal revolution” or the efforts to “put downward pressure on alcopop consumption in working families”.
It all just sounds like the exact opposite of the “evidence-based policy” that Rudd was so keen to trumpet in opposition! Spin the line, control the information and limit scrutiny, eh?
Taken from the Oz’s editorial, the taxes on alcohol (per standard drink) are:
Well that explains why you see homeless people walking around with cask wine - they know the best bang for buck.
So why the difference in taxes for what is fundamentally the same product? It perhaps could be argued that lower percentage alcohol drinks should be taxed at lower rates because its more difficult to abuse. But then RTDs should be taxed at a lower rate than straight spirits. That beer is taxed at a higher rate than wine is a rather strange decision.
Weren’t alcopops overlooked by the previous govt when they were setting the tax rates on alcohol?