Treasurer Josh Frydenberg has met with Australian Hotels Association (AHA) chief executive Stephen Ferguson to discuss beer tax cuts in the 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 last month and adds 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 halved, dropping 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.
“I’ve had several discussions with members of cabinet, including the Treasurer,” Ferguson told The Age. “It’s already about three times as expensive to buy beer in a pub or club or a restaurant as it is to buy over the counter.”
The AHA, the Brewers Association of Australia and Clubs Australia have been meeting with Coalition MPs throughout the country lobbying for the beer tax cut.
There are now 21 members of the Morrison government have thrown their support behind the campaign.
“Resetting the draught beer rate to 50% of its current level would allow them to reduce prices for their drinkers and attract them back into venues,” Tasmanian senator Eric Abetz wrote to the Treasurer last month.
Reid MP Fiona Martin, who is a psychologist, said she had decided to back the beer tax cut because pubs and clubs in her electorate were struggling and it was better for people to drink socially in a beer garden than at home alone.
“As a health professional, I’m concerned about excessive alcohol consumption as a health issue,” she said. “It’s much better to be drinking with people in the pub … There are social benefits and health benefits there by interacting with others, but I certainly want people to be mindful of drinking in moderation.”
Other supporters of the campaign include Liberal senators James McGrath, Sarah Henderson and Jonathon Duniam and MPs Tony Smith, Bridget Arthur, Gladys Liu, Gavin Pearce and James Stevens, along with Nationals MP Damian Drum and Liberal-National MPs Llew O’Brien, Trevor Evans, Julian Simmonds, Scott Bucholz, Bert van Manen and Terry Young.
A spokeswoman for Frydenberg said in a statement: “The government doesn’t comment on budget speculation.”
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.”