Federal Budget predicts $400million spirits excise surge

The Albanese Labor Government’s first Federal Budget has predicted spirits & RTDs will add an extra $400million in excise tax to the Treasury’s bottom line.

The forecast in the Budget for excise on spirits and RTDs was up 13% compared with the pre-election budget forecasts. However, excise from beer was forecast to fall by $30million to $2.62billion, a drop of 1%.

“The outlook for alcohol excise receipts has improved, driven by stronger consumption of higher-taxed spirits and pre-mixed beverages compared with lower-taxed beer,” page 160 of Budget Paper No. 1 read.

Spirit tax collected $3.2billion in the 2021/22 financial year and was expected to grow to $3.8billion in 2025/26 as Australians continue to switch from beer to spirits.

In August, Spirits and Cocktails chief executive Greg Holland slammed the latest excise rate rise to $94.41 per litre of pure alcohol, i[ from $90.78 in February.

“It’s the biggest increase in almost 50 years, since our tax figures were updated in 1978, and in that time, spirits manufacturers have been slugged with the GST and the RTDs tax as well,” he said.

“It is also important to remember government data shows most Australians are drinking more responsibly, often choosing to enjoy quality offerings like a gin and tonic, bourbon and coke, dark and stormy cocktail, or a good scotch or Australian whisky. On top of all the other cost of living pressures they’re facing, those millions of Australian consumers will now likely be slugged even more as a result of this excise increase.”

More support needed

Independent Brewers Association Chief executive Kylie Lethbridge told Brews News she was disappointed that the Budget didn’t include more support for brewers.

“With a considerable national debt clearly the issue I am not surprised that there is no specific mention of support for the beer industry, but given the situation our members are facing it is sad that I struggled to find reference to small businesses or start-ups in the budget papers at all,” she said.

“While it is honourable to see support for electric vehicles, mental health support for small business and initiatives to help improve energy efficiency and reduce energy use it doesn’t feel like there is a real understanding of how hard it is for Australian businesses at the moment – nor how dire the future looks.

“We would have definitely liked to see initiatives to reduce energy costs, greater and more immediate support for skills shortages and grants that support capital investment.”

The Brewers Association chief executive John Preston said: “There’s nothing there for us, it’s out of the usual budget cycles as well so we weren’t expecting anything.”

Stephen Ferguson, chief executive of the Australian Hotels Association, warned that pubs were still struggling to bounce back from the effects of COVID-19 lockdowns.

“People who borrowed in the pandemic, if they had a $1m loan, they could defer their payments but the interest bills kept coming,” he told the Herald Sun.

“Pubs are 15% behind where they would have been.”

Winemakers welcome cellar door grants

Australian Grape & Wine said it welcomed the Federal Government’s decision to continue the Wine Tourism and Cellar Door Grants program.

The organisation said it was a relief to winemakers and their teams right across Australia’s 65 wine regions.

“We are delighted that the Government has shown its commitment to Australian grape and wine businesses during a very challenging period for the sector” said Australian Grape & Wine’s Chief Executive, Tony Battaglene.

“This grant helps Australia’s grape and wine businesses to invest in their cellar door offerings and employ local people. We know great cellar doors attract tourists to regional Australia and we also know these tourists tend to spend more money in regional communities when they visit, with benefits flowing from the vineyard through to the local pub and bakery.”

Under the Wine Tourism and Cellar Door Grants program, producers who meet the eligibility criteria in the preceding financial year can apply for a grant payment of 29% of the notional wholesale selling price of their eligible domestic cellar door sales (up to $100,000 (GST exclusive). Total funding under the grant program is capped at $10 million each financial year.

“We applaud the Government for listening to Australian winemakers and making the right call for regional communities in this budget.”

Skills shortage measures applauded

Tourism and Transport Forum welcomed the Federal Budget as a responsible first step to resolving the tourism and hospitality skills shortages.

Tourism and Transport Forum (TTF) CEO Margy Osmond said the additional free TAFE courses, cheaper childcare and extra housing investment as positive measures to help fill key skills gaps and attract workers to tourism, transport and aviation, which have all been heavily impacted by the pandemic.

“Starting with 180,000 places next year and increasing to 465,000 over the next four years, these free TAFE spots will help fill the skills gaps,” she said.

“It’s a solid start to target skills in short supply, but we hope to see more industry-led training as well.”

Osmond said she supported the new national housing plan, which should help entice workers to new areas, especially in rural and regional Australia.

“Building one million new homes over five years from 2024 near emerging jobs, including an extra 20,000 affordable houses, will help our sectors attract the workers they desperately need. The staffing problems can’t be fixed by extra training alone,” she said.

She also welcomed the budget’s commitment to helping clear the backlog of visa applications and other previously announced measures to encourage foreign workers to come to Australia.

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Categories: Business