Anyone with an elementary knowledge of basic economics understands that there's a substitution effect when one good rises in price comparatively to a similar good, hell, its common sense really.

So this begs the question.. what happens when you increase the price of premixed drinks? Obviously people will move on to other comparatively cheaper beverages.. such as straight spirits.. Uh huh.. giving people a disincentive to consume drinks that are sealed against being spiked and come with a predictable level of alcohol can hardly be called intelligent when you do it in the name of reducing binge drinking.

Yeah, your really likely to get less drunk off free pouring vodka into a glass and adding some orange juice.. yeah.. good thinking there! Now add into the equation the cumulative effects of increased intoxication on your 'pouring skills'.. yep, there's a recipe for success, if by success, you mean half naked, commadose and lying in the gutter.

Before we know it, they'll be preaching for abstinence only sex education to reduce std's.. because that really works.. (In case anyone can't tell, I'm being sarcastic.. I hate moral puritans more than the sick feeling you get the day after playing goon of fortune at a party)

BUT WAIT, what if the government does what it does best and taxed ALL alcohol more, wouldn't that sure strike fear into those evil would be binge drinkers?! Well.. Not really.. or only in the way it wasn't intended. Think about it for a moment; go to any poor neighbourhood, hell, go to any bottle shop in Croydon on a Saturday night and you tell me how 'substitutable' the consumers in that market segment consider their alcohol consumption.

Ever wonder why people choose to get really drunk after losing a job, when logical analysis would imply its the time they can least afford it? Ever wondered why you commonly see men from poor neighbourhoods drinking themselves into a stupor, when a rational logical analysis would suggest they would be better of investing their funds in education?

It's because alcoholics don't consider alcohol a substitutable good, they will forgo luxuries, more nutritional food and even basic necessities before they will give up that hard earned slab of johnny walker and coke.

Naturally things aren't so black and white, the substitution effect does come into play in a number of ways as;

1. As the price of alcohol increases, other substitutes such as illicit drugs, misuse of legal drugs (flu medicine + a shot of vodka for the determined type) become increasingly attractive, not to mention the all time recession favourite beverage of pure ethanol with a dash of lemon. The net impact will end up being harmful consumption of intoxicating beverages remains the same, while safer beverages are consumed less and more harmful illegal intoxicants are consumed more.
2. Those people who this law isn't targeted, the responsible type, the type who only casually consume drinks will feel unfairly punished and will consume less alcohol.

I'm sure the government will feel proud when they have successfully converted the average teen binge drinking session from cheap case wine to a bottle of vodka and a packet of flu medicine, even at $60 for a bottle of cheap vodka and $12 for a packet of flue medicine that's about $5 a person to get completely wasted, or for the really cheap and more traditionally inclined a $3 bottle of methylated spirits and a lemon.

All in all this new paternalistic state is an assault on civil liberties, its against the principle of freedom to make personal choices and its economically wholly ineffective at achieving its stated outcome.

If Kevin Rudd seeks to increase teenage use of intoxicating stimulants while appeasing the Christian right I salute his cunningness, if not, then I hope he stops trying to be Australia's dad, and refreshes his understanding of economics 101. He's a smart guy, and a step forward from the howard years, so lets hope he snaps out of it *crosses fingers*.