Budget breakdown: what happened to the beer excise cut?

The federal budget has been delivered ahead of an upcoming May election and it held good and bad news for the drinks industry in regard to business costs and the proposed excise cut.

Earlier this month, Treasurer Josh Frydenberg met with Australian Hotels Association (AHA) chief executive Stephen Ferguson to discuss beer tax cuts in the federal budget. The AHA, the Brewers Association of Australia and Clubs Australia have been meeting with Coalition MPs throughout the country lobbying for the excise cut.

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 lobby groups were calling for 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.

But it didn’t make the cut in this year’s budget — except for when it comes to venues pouring “growlers”, which is takeaway beer (up to 2 litres), poured straight from the keg at a brewery or pub. The government has given a tax exemption on growlers of up to 10,000 litres a year. 

The Independent Brewers Association (IBA) said: “While we are still seeing some controversy around the proposed 50% cut to tax on draught, we feel that this will be of benefit to our members that supply kegged product. Given the cut is on beer targeted at on premise, we can only hope that the flow on benefit promised for the hospo industry and consumers is realised.”

The Government also announced it is lowering the costs of doing business for manufacturers, importers and distributors in the alcohol and fuel sectors by enabling businesses with an annual turnover of less than $50 million to lodge and pay excise and excise-equivalent customs duty on a quarterly basis, from 1 July 2023.

Currently, most of these businesses report monthly, with some reporting weekly. The new quarterly lodgement schedule will better align with the reporting and payment schedule of other indirect taxes, with returns and payments required no later than the 28th day of the month after the end of each quarter.

The Independent Brewers Association (IBA) said: “The 2022/23 federal budget just announced contains good news for members of all size and scale. 

“While there are other incentives around taxation, an important one for breweries specifically is the adjustment to how alcohol excise is reported and we are sure this will be a welcome change.

“We hope that this will be the first of other announcements around improving the excise administration process.”

AHA National CEO Stephen Ferguson said the Association’s 5000 members, 250,000 workers and millions of patrons would feel let down by the budget announcement.

“The way we are going draught beer poured at a pub is becoming a luxury item,” Ferguson said.

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Categories: Business