The Federal Government today confirmed one of the world’s highest alcohol excise taxes will be increased yet again on 5 August 2024 to $103.89 per litre for spirits and as much as $61.32 per litre for beer.
The CPI increase will be the 75th tax hike on alcohol since automatic indexation was introduced by Paul Keating in August 1983, in his first Budget as Treasurer.
“The new system will afford a greater degree of stability for consumers and industry alike,” Keating said in his Budget speech.
“These traditional excises will rise gradually in line with inflation and as wages and other incomes themselves increase.”
Spirits & Cocktails chief executive Greg Holland said: “Automatic indexation was introduced to suit the economic conditions of the day. It was never intended to continue indefinitely.
“Far from rising ‘gradually’, as Mr Keating intended, spirits tax has now increased by almost 20% in the last four years.
“Far from providing ‘stability’, the Australian spirits industry is now suffering from an extremely unstable investment environment, thanks to these tax hikes every six months.
“As for wages? Australia today has some of the worst real wage growth of the OECD’s 38 member nations.
“Further increases to this tax simply do not pass the pub test.”
Australian Distillers Association chief executive Paul McLeay said: “There were only two distilleries in Australia when these six-monthly tax hikes began in 1983.
“Today there are 700 distilleries and we want to work with the Federal Government to build a major export industry that Australians can be proud of, just like our globally renowned wine industry.”
McLeay noted Treasurer Jim Chalmers’ recent statement that Australia, ‘has been dealt the most incredible cards as a country’.
“The Treasurer was speaking in relation to the Government’s domestic manufacturing agenda, and in the case of spirits, his words certainly ring true,” said McLeay.
“We have unrivalled access to base ingredients like grains, sugarcane and grapes, rare native botanicals for gins and liqueurs, and an incredible inventory of wine barrels for maturing dark spirits.
“It would be a terrible shame if this enviable opportunity was squandered by continued Government inaction on spirits tax.”
Australia now has the world’s third-highest beer tax after Norway and Finland.
Independent Brewers Association (IBA) chief executive Kylie Lethbridge told the Sydney Morning Herald the industry lobbied the government for relief in this year’s federal budget but their calls for a 12-18 month freeze on excise were ignored.
“So we’re now calling on our consumers not only to look for the ‘Certified Independent’ seal when they’re purchasing their next beer but to reach out and to tell our government they want their beer to be cheaper,” she said.
There are 25-30 breweries in yhe past 12 to 18 months “that no longer exist” Lethbridge said, due to rising costs.
“This tax has gone up twice a year for over 30 years. We’ve now got the third highest beer tax in the world,” said Brewers Association CEO, John Preston.
“Beer drinkers are set to be slammed by yet another excise tax increase at a time when people are already struggling with the rising cost of living.
“Enough is enough. We’re calling for the Federal Government to step in and cut the rate of tax for beers served in hospitality venues back to a sensible level.”
Crippling blow for hospitality industry
AHA National CEO Stephen Ferguson said the crippling tax was another blow for everyday people struggling with the rising cost of living.
“We are calling on the Government, Opposition and Cross Bench to support reducing the excise on all beer and spirits poured into a glass and served to a customer in a pub,” he said.
“Its’s not the politicians who cop the grief from customers every time the business has to pass this hidden tax on – it’s the worker or owner behind the bar who cops it.
“This hidden tax – which has gone up every six months for the last 35 years – will hit pub-goers in the hip pocket at a time they can least afford it.
“Australia’s hidden beer tax rate is now the third highest in the OECD and the excise on beer and spirits this financial year alone will be nearly $8 billion.
“It’s nothing but a hidden tax on socialising – when we know how important it is for people to spend time with their friends out of the home.
“And it’s a hidden tax on the jobs of the people pouring your beer or making your gin and tonic.”
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