Ratchet Tax increase on beer hits 30-year high

August 9, 2022
Clyde Mooney

Industry associations are joining pubs and clubs in calling for relief from Australia’s ratcheting tax on draught beer, as they attempt to recover from the financial impact of COVID on businesses. The latest rise, representing the biggest increase in more than three decades, prompting further debate amid economic constraints.

The world has been experiencing uncomfortably high inflation post-pandemic, largely as a result of supply chain and labour disruptions as countries hunkered down.

Linked to CPI, the ­biannual indexation for August has ­resulted in the tax increasing four per cent; from $53.59 to $55.73 per litre of ­alcohol. This amounts to around 80c more on a carton of beer, to $18.80, and about $4 on a keg, to nearly $74. The Federal Government collects around $7 billion annually in all alcohol excise. Of this, draught beer makes up about $300 million. A cut of 50 per cent was flagged in the previous government’s March budget, estimated to cost $190m in the coming financial year, but this was removed even before Morrison lost the election.

The Albanese government has not indicated any intention to reintroduce the cut, having ­inherited a trillion dollars in debt, and finding plenty of budgetary pressures in a trigger-wary economy.

CEO of the Brewers Association of Australia, John Preston, laments that Australians are taxed “more than almost any other nation” on beer.

A hidden, silent tax, it is legislated to increase twice every year, and typically venues have little choice but to pass the cost on, particularly in the wake of rising food, energy and workforce pressures.

Draught beer from a keg has an established and measured tax rate, making it only a matter of policy to change. Other beverage types are more complex, due to inconsistency in format and usage.

Scheduled to rise again in February 2023, the AHA is hoping to see government policy making beverages poured into a glass in a licensed premise either excise-free or taxed at a substantially reduced amount, on the basis that labour required to serve the drink creates employment.

“We believe there should not be a tax on jobs and that they should be treated differently to packaged or bottled products sold in bottleshops, simply because of the labour used to pour it and the sociability of venues,” AHA CEO Stephen Ferguson told ClubTIC


Tags

AHA, Beer tax


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