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Friday, 16 May 2008

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Hop in to the wine cask

If politicians were fair dinkum about believing that the price mechanism is the best way to reduce alcohol consumption they would not be fiddling around with what rate of excise should be applied to sweet and fizzy alco pops – they would be hopping right in and changing the way that wine is taxed. Beer and spirits in this country both are taxed on the basis of the amount of pure alcohol contained in the drink with spirit drinkers being slugged considerably more for their booze than beer drinkers. Whisky, gin, rum and other spirits, including after this week those alco pops, have an excise of $66.67 per litre of alcohol content. (There is a slight reduction for brandy drinkers where the rate is $62.25 per lal) With beer in cans and bottles that is stronger than 3.5% alcohol by volume, excise is levied at $39.36 per lal by which the percentage by volume of alcohol of the goods exceeds 1.15% There is a lower rate for bulk beer and for those with an alcohol content below 3.5% but let's not confuse ourselves with those. For the best selling beers like VB the formula works out that government slug is around $29 for every litre of alcohol – substantially less than paid on spirits including the dreaded alco pops. With wine the tax regime is based not on alcohol content but on the price it is sold at to retailers. The wine equalisation tax (WET) is 29.5% of the value. On cask wine that retails for around $12 for four litres of wine normally containing about 10.5% alcohol by volume, the tax works out around $5 per lal! No wonder then that the alcoholic on a budget gets stuck into the wine casks. If wine was taxed in the same way as beer, the tax alone on a wine cask would be greater than the current total selling price! The good news from that form of taxation would be that expensive bottled wine would become cheaper.

A somber Prime Minister

Treasurer Wayne Swan tried to have his poker face on when Brendan Nelson was giving his budget speech last night but could not contain traces of an occasional smirk. Prime Minister Kevin Rudd, by contrast, remained dead pan and serious throughout as well he might have. Dr Nelson's words showed that there is every prospect of a repeat of the problems that confronted the Whitlam Government which had to govern without a Senate majority back in the 1970s. The Coalition partners are showing no sign of accepting that there is anything like a mandate for Labor and are promising to be as obstructionist as possible. Governing under these circumstances is going to be tough and the arrival of a few more Greens and an Independent after 1 July is not going to improve things much.

The Daily Reality Check

The budget speech itself caused barely a ripple of interest so it is no surprise that the right of reply exercised by Leader of the Opposition Dr Brendan Nelson is hardly top of the pops this morning. Not a single most read sticker on the internet sites we survey but the prospect of defeat in the Senate for some of Labor's key proposals at least had Dr Nelson on the top five lists of The Australian, The Age and the Sydney Morning Herald.

The Pick of this Morning's Political Coverage

Brendan Nelson fuels budget brawl in budget-in-reply speech – Matthew Franklin, The Australian

Nelson's threat to block budget tax measures – Peter Martin and Danielle Cronin, Canberra Times

Education boss John Della Bosca cleans his foul mouth – Clare Masters, Sydney Daily Telegraph

Govt shut down, 'hacker' charged – Phoebe Stewart, Northern Territory News

Liberals to keep convention but not vote on merger – Steven Wardill, Brisbane Courier Mail

Rann's secret world tour revealed – Nick Henderson, Adelaide Advertiser

Chair sniffing Buswell in crotch grabbing controversy – Kate Campbell, West Australian

Top cop threatens pubs, clubs with midnight bar – Joseph Catanzaro, West Australian

What the world is reading on the net

People in China might know that Jim Walton, the president of CNN, has apologized for remarks made on the international television news network that the Chinese Government found insulting but readers of the CNN website would be blissfully unaware. The People's Daily trumpets the apology today and the story has risen to the top of the site's most read story list despite the competition from the devastating earthquake in Sichuan . The official Communist Party paper illustrates its account of Mr Walton's apology with what looks like a copy of something that might have appeared on CNN itself.

A check this morning of cnn.com found nothing remotely like The People's Daily graphic which apparently was dummied up by a Lin Hanzhi for the official Xinhua newsagency. The last story about the remarks made by CNN commentator Jack Cafferty was on 17 April when it reported the Chinese Foreign Ministry saying that CNN hadnot done enough to ease its concerns over a commentator who referred to the Chinese as "goons and thugs" and said products manufactured in China were junk." The People's Daily report quotes Chinese Foreign Ministry spokesman Qin Gang saying that Mr Walton, in a letter to Chinese ambassador to the United States Zhou Wenzhong, wrote that "On behalf of CNN I'd like to apologize to the Chinese people for that.”

China – The People's Daily: CNN president apologizes for Jack Cafferty's remarks on China

United States – LA Times: Alleged MySpace 'cyber-bully' indicted in teen's suicide

United States – USA Today: Lifeline Live Blog: Entertainment News & Rumors - Hollywood detective convicted

UK – The Independent: I give up, says Brazilian minister who fought to save the rainforest

UK – The Times: Billion-pixel panoramas — from your own camera

Singapore – The Straits Times: Petrol, diesel pump prices up again

Canada – Toronto Globe and Mail: Fairy-tale marriage of Shania Twain comes to an end

India – Times of India : 80 killed, 150 wounded in Jaipur blasts

Australia – The Australian: Billionaires cheer as Andrew 'Twiggy' Forrest ships his first iron ore

Quote of the Day

How can any government boast of a budget that proposes to put 134,000 Australians out of work? Under the Coalition it was ‘welfare to work'. Under Labor, we are headed again on the road of work to welfare.

Dr Brendan Nelson, Leader of the Opposition, in his budget reply speech.