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Urgent Call To Freeze Tax Hikes On Drinks

25 May 2004

Urgent Call To Freeze Tax Hikes On Drinks

Happiness from “tax freedom day” will be short-lived as next Tuesday (1 June) the Government schedules a tax hike on spirits and other alcohol beverages.

Celebrated tomorrow, (26 May), “tax freedom day” marks the day of the year when taxpayers stop working for the Government and start working for themselves. Just days later, the Government plans to hit consumers in the pocket again with an increase on excise tax on sprits and other alcohol beverages, indexed to annual inflation.

With a Budget announcement just two days away projecting another massive surplus (Thursday 27), chief executive of the Distilled Spirits Association* says the 1.55% tax increase on spirits defies commonsense.

Speaking at the Association’s AGM this afternoon, Thomas Chin commented: “With the Government’s coffers in the black, there’s simply no need to proceed with the planned tax hike. The Government’s continued thirst for revenue through tax increases already costs taxpayers more than $170m annually, surely it can afford to give Kiwis a break this year by not stinging them for more?”

Last year’s infamous “sherry tax” saw the elderly, among others, severely disadvantaged, forcing many to give up their favourite drink. As a result, some sales have dropped massively proving that increasing taxes prevents people from being able to afford their drink of choice.

Thomas Chin believes the Finance Minister, Dr Michael Cullen, should follow the lead of his Australian counterpart, Treasurer Peter Costello, when he announced cuts on alcohol taxes during the Australian Fiscal Budget earlier this month.

"We strongly urge Dr Cullen to cancel the 1 June excise tax increases on alcohol beverages to give both our beleaguered drinks industry and average New Zealanders a break.”

The planned tax hike adds insult to injury in that more than 70% of the average price for a bottle of spirits already goes to the Government in the form of taxes, GST and special levies.

Mr Chin advises drinkers that it’d be wise to stock-up on their favourite tipple before next week. “The anticipation of these tax hikes is scary enough to make you cry into your glass.”


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