Beer tax cut under “serious consideration”

A dozen Federal government backbenchers have endorsed the Australian Hotels Association’s national campaign to halve the excise tax on draught beer for pubs.

Senior sources told News Corp the tax cut is under “serious consideration” for next month’s federal budget.

Excise duty rates for alcohol are raised twice a year, in line with the consumer price index (CPI). The latest tax hike was passed earlier this month and will add roughly 60 cents to the cost of a schooner and 80 cents to a pint of draught beer.

The AHA proposal, which would see the tax on a keg of beer drop from $70 to $35, would translate to a 40 cent cut in the price of a pint, while a schooner would be 30 cents cheaper.

Australian Hotels Association CEO Stephen Ferguson told the Hobart Mercury last week: “The government always tells us they want to decrease the cost of living, lower taxes, and enable Australians to keep more money in their pockets, but when it comes to draft beer Australia has the fourth-highest beer tax in the world.

“When they make this increase each six months it takes about another $160 million from Australians’ pockets.

“This is about jobs and sociability. It is a lot cheaper to buy a slab of beer and go home rather than go to the pub. The hidden beer tax goes up twice a year and it went up quietly again last Tuesday and it is making it unaffordable for many older people to go to the pub.

“The government wants to lower taxes and let people keep the money they earn – well halving this tax will do that.”

Australian Tax Office figures show that pubs and clubs sold 40 million fewer pints of beer between July and September last year than they did during the same period in 2019 and before COVID-19.

That’s a massive drop of more than 50% in beer sales for struggling venues.

In 2020, pubs and clubs lost over $1 billion in beer sales due to lockdowns and other restrictions, but these latest figures from the ATO show that losses for 2021 could well exceed that.

The ATO recorded 903,982 litres of alcohol as having been served in beers over the counter in July-September 2021 compared to 1,993,027 litres during the same period in 2019.

Pubs have also been hit with staff shortages and supply chain issues in recent months.

Brewers Association CEO John Preston said the proposal to cut the beer tax “would have a tiny impact on the government’s alcohol excise revenue, which is around $7 billion a year, but it would have a big impact for beer drinkers, and struggling pubs and clubs.”

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