By Ian Neubauer

The Federal Government will again try to push the RTD tax hike bill through Parliament despite acknowledging the measure had led to substitution to other categories of alcohol.

The Government will next month reintroduce a proposal to make the 70 per cent tax hike permanent, which the Senate will have to vote upon within the next 12 months. And it will bring into effect tomorrow (May 14) a measure that will allow it to continue to collect the higher tax rate until the vote takes place. 

This follows an admission in the 2009 Federal Budget overview that substitution by consumers to other categories of alcohol had all but negated the positive effects of the RTD tax hike since it came into effect last year.

“Between May 2008 and March 2009, consumption of RTDs fell by 35 per cent over the previous year … In the same period, the consumption of full strength spirits rose by 18 per cent and that of beer by 5 per cent, suggesting some substitution from RTDs to other alcoholic beverages," the Government said in its budget overview.

“Overall excisable alcoholic beverages consumption declined by 0.5 per cent in contrast to small positive growth rates of recent years.”

The development has fostered allegations that the Rudd Administration is ideologically committed to the RTD tax hike, with Distilled Spirits Industry Council of Australia spokesperson Stephen Riden describing the move as an act of contempt against the Senate.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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