Hiking booze tax a terrible mistake
14 AUGUST 2019
FOR IMMEDIATE RELEASE
The New Zealand Taxpayers’ Union is warning of the dangers of hiking excise tax, in response to calls from a former Prime Minister for stronger action on alcohol harm.
Taxpayers’ Union spokesman Louis Houlbrooke says, “It seems inevitable that the increasing pressure on the Government to revisit alcohol regulations will result in calls for tax hikes.”
“Politicians will love the sound of another revenue stream, but the experience with tobacco suggests we should be very wary of punitively taxing drinkers. Taxing alcohol might discourage moderate drinkers, but serious addicts will continue, regardless of the effect on their wallet. In practice, this means less food on the table for some of New Zealand’s poorest families.”
“There’s also the likelihood that, like tobacco tax, alcohol tax will drive illegal activity: more robberies of bottle shops and a black market in unregulated, home-distilled liquor. And unlike tobacco, where there is a less harmful alternative, taxing booze may push people into using more harmful substances like P.”
The effect of tobacco tax on smoking rates, poverty, and crime was explored in the Taxpayers’ Union report Up in Smoke: The social cost of tobacco excise.