PM shows reservations about upping taxes on alcohol

President of the Law Commission Sir Geoffrey Palmer. Photo / Mark Mitchell

Prime Minister John Key has expressed reservations about hiking the price of alcohol across the board in order to cover the costs abuse causes society.

The Law Commission has proposed significantly increasing the price of alcohol, raising the drinking age, and radically lowering the legal breath alcohol level for drivers.

Commission president Sir Geoffrey Palmer said there was a gap between the taxes the country received from alcohol purchases, $795 million, and the estimated social cost of harmful misuse of alcohol of $5.3 billion.

The commission would recommend changes after considering responses to a discussion paper.

Mr Key told Newstalk ZB the Law Commission acted independently and it was up to the Government what changes it adopted.

"I think you've got to be very careful you don't get in a situation where you simply whack up the price of booze and everybody gets affected because some, particularly young people, are going out on benders," he said.

"Because they (the Labour government) did that with the sherry tax and all that did was stop grandma having a sherry at night as opposed to the real purpose ... I am not saying we have a closed mind to this issue, we will look at solutions.

"It is a problem, alcohol abuse, but not everybody drinking is abusing alcohol."

Labour's justice spokeswoman Lianne Dalziel yesterday said she supported the concepts outlined by the Law Commission.

Increasing tax on alcohol was about making those who buy alcohol pay for the harm it did, Ms Dalziel said, and there needed to be debate about whether this was the right option.

"In terms of the age debate, I have made no secret of the fact that I favour a retention of the 18-years for on-licence sales, but I favour a return to 20-years of age for off-licence purchases."

Ms Dalziel's submission to the Sale and Supply of Liquor Bill - currently before a select committee - recommends off-licences close at 8pm and on-licences at 1am except those in certain areas with a one-way-door requirement which would shut at 3am.

She has previously said supermarkets should "lose the right" to sell alcohol.

- NZPA