" Sin " Taxes !

It is always tempting for the government to increase " Sin "  taxes when they find themselves short of money and the present budget deficit has probably encouraged the Foundation for Alcohol Research and Education to call for a ten percent tax increase on all alcohol to force a reduction in the consumption of what it terms a dangerous product.

The Foundation predicts that raising the price of alcohol by ten percent will bring about a 9.4% reduction in purchases, with consequent benefits in a reduction in public drunkenness and damage to health.  The cynics may smile and suggest that is wishful thinking.

The price of bottles of wine now retailing in the $15 to $ 20 range would rise by about $ 3.80 and a glass of beer served over the bar would rise by about five cents.  The big question is whether the drinking public would be sensible and forego their use of alcohol, or whether they would simply indulge their habit and fund it by spending less on food and other necessities.

We have a classical example of the " unintended consequences "  of punitive price increases right before our eyes - when it comes to tobacco.  It is government policy to eventually end nicotine addiction in Australia and hand in hand with advertising bans and forcing the product into unattractive packaging is a steady regimen of price increases.  Each individual cigarette which used to cost pennies - now has reached the dollar each level, and smoking rates have marginally dropped.

What also has decreased is the flow of tax dollars from tobacco products into Treasury because the slack has been taken up by smugglers.  Customs announce regular seizure of huge amounts of contraband at our ports, but across the retail spectrum it is ridiculously easy to buy both cigarettes in pack form and in what is called "Chop Chop ", loose tobacco used by those who " roll their own " cigarettes.

The penalties are far less for getting caught smuggling tobacco than for importing narcotics and the sheer volumes passing through our ports ensure that smuggling remains very profitable.   It would not take the vision of Nostradamus to predict that if we hike the price of alcohol we are simply making it attractive for the black economy as a new form of contraband.

There is also the option of illicit alcohol production becoming a reality in this country, as happened in America in the days of prohibition.  Setting up a " still " is not difficult and as we have seen in the drug industry, the relentless search for " profit " has seen a rash of drug production kitchens magically appear in suburbia, often with dangerous side effects.

In many cases, illicit alcohol distilled by amateurs can range from raw spirits  of unknown alcohol content, to what is really ethanol - and deadly if imbibed.  That is something that is virtually unknown in this country - and we would be wise to keep it that way.

There is no doubt that alcohol is abused by some members of the public and we have seen some draconian laws enacted to moderate venue timing, but the vast majority use this product in moderation.  If the government is tempted to hike the price to alleviate a budget problem by imposing an unpopular and financially damaging burden on the average person, they are opening the door to the ever watchful crime fraternity.

It is worth remembering that anything we try to restrict immediately acquires a cachet of desirability !