After the fiasco over alcopops, there’s only one reason Brendan Nelson can survive as Opposition leader. All the potential alternative leaders, with the apparent exception of Julie Bishop, have made just as big fools of themselves as Nelson has.
The decision to tax premixed spirit drinks on the same basis as spirits in general was announced weeks ago, without a peep from the Opposition. There are two justifications for the decision, either one of which is entirely sufficient.
First, it closes an obvious loophole in the revenue system. Since most spirits are consumed in mixed drinks of one kind or another, it makes no sense to exempt premixed drinks from the general tax on spirits. If the Opposition thinks spirits in general should be taxed at a lower rate, they haven’t said so, and of course they had 11 years to make the case from the government benches.
Second, the government has made the case that these drinks encourage excessive drinking among young people, particularly young women. AFAIK, no-one has refuted this, and certainly the Opposition has made no attempt to do so. (updatedin fact, tonight’s ABC news has footage of Nelson making precisely this claim in Parliament back in 1996)
Instead, we have quibbles about the fact that the Budget papers predict an increase in consumption of these drinks even with the tax. This is a weak argument, to say the least, and the government has promptly demolished it.
Turning from the policy to the politics, this shapes up to be a disaster for the Opposition. A backdown now would be disastrous for Nelson, given the general view that he should be given a chance to respond to the Budget before being dumped as a failure. But the alternatives are even worse. The Opposition could fight on the issue until the new Senate takes over in July, then be rolled over. Alternatively, they might somehow persuade Nick Xenophon to take the suicidal step of joining them and handing Rudd a double dissolution trigger with which to take complete control of the Senate.
But of course, there’s more. Having put the richest man in Parliament in as Shadow Treasurer they now intend to fight the government on the issue of a tax on luxury cars. It’s not a great policy (removing the FBT exemption would have been much better) but it’s a political minefield for the Libs.
I’d guess a backdown, followed by Nelson’s rapid departure is the most likely outcome. But perhaps the fact that Turnbull, Abbott and Hockey are all equally implicated may give him a bit of breathing space.