Don't mix facts with rhetoric

by Sylvano Lucchetti - 2008-07-24 02:03:08

Teenage girls will force the Reserve Bank of Australia to raise interest rates.

Samantha Maiden's article in today's Australian, PM's alcopop tax helps fuel inflation, makes the bold (literally) assertion: "KEVIN Rudd's tax binge on alcopop sales is delivering a hit to inflation, according to today's CPI figures."

The ABS summary analysis notes that the spirits line item in the CPI tabulations showed a 6.1% increase in the June quarter, largely driven by the increased tax on pre-mixed spirit drinks.

Wow! 6.1% increase! How can we ever afford to eat meat ever again with party drinks becoming so expensive? What a 'hit to inflation,' says Maiden.

What utter nonsense. This 'hit' is something in the order of throwing a stone at an incoming howitzer shell.

It seems this 'online political editor' misrepresents facts either out of ignorance or simply to provide an opportunity to quote Turnbull sprouting the very same nonsense - and that guy really should know better. But that politics, I suppose.

Now just so we all have a common understanding of what this is really about, have a guess of what percentage of household expenditure on average is spent on alcohol. Go on, take a punt.

If you're thinking around 2% to 3% you're pretty much right.

And something in the order of half of one percent (0.5%) of household expenditure on goods and services goes to spirits. Now alcopops are only one part of the range of spirit drinks. I think you get the idea: a 6% increase on sweet bugger all... equates to sweet bugger all. An irrelevance compared to an increase in something that hits everyone, like fuel costs...

It really wouldn't hurt for Maiden to at least skim through the ABS publication, A Guide to the Consumer Price Index, to gain just a little insight into what the CPI is all about.

And taking a look at the details within the Household Expenditure Survey to learn where household expenditure occurs may aid her as well.

Of course, if you like numbers, spreadsheets and making pretty graphs then you'll also find hours of fun exploring these online information resources.

Finally, to you youngsters reading this article, puzzled by the fact that you spend way more than 0.5% of your disposable income on alcopops, consider two things:

(a) do you think you may be - just may be - spending too much money on alcohol?
(b) consider learning how to make scrumpy - it's dirt cheap (and no taxes), it gets you pissed and you also get to learn something about chemistry. Sure it tastes like crap if you get the mix wrong, but you aren't drinking for the taste, are you...