Industry calls for freeze on alcohol tax
The Morrison government is being urged to freeze the twice-yearly tax on alcohol, to help pubs, brewers and the hospitality industry in general get back on its feet.
In February and August each year, alcohol tax in Australia rises with inflation. The tax is worth more than $5BN to the federal budget.
Australians are burdened with the fourth-highest beer tax in the industrialised world. The average carton of beer in Australia sells for $52. Approximately $22.05 42 per cent is tax.
The government would be taking a leaf out of the UK’s playbook if it went down this path. In the UK, this particular tax freeze which includes spirits, wine, beer and cider, has been in place for a year already, with another year now confirmed.
Cessation of the tax in Britain has helped to ease cost-of-living pressures and help businesses recover after long stints in COVID-19 lockdown.
The UK has unburdened the hospitality industry via an extension to the reduced value-added tax (VAT) rate of 5 per cent - down from 20 per cent.
Representatives of the Australian hospitality industry want the Morrison government to follow suit.
Brewers Association of Australia chief executive John Preston believes a tax freeze is consistent with the government’s fiscal stimulus agenda.
“The whole industry in the UK has been calling for action to address the tax burden and Chancellor Sunak has delivered,” Mr Preston said.
“I would urge the Australian government to use their upcoming Budget to stop future tax increases on beer and put in place additional measures that deliver much-needed support to our hospitality sector”.
Australian Hotel Association chief executive Stephen Ferguson has urged the government to do more for the industry and to better support local craft brewers, proving jobs in regional and remote locations.
“This is about easing cost of living pressures and supporting jobs. Australians pay amongst the highest excise rates in the world,” Mr Ferguson said.
“Those with cellar door operations often play a key role in the tourism industry in those regional destinations.”
The industry may have to wait a while before its recommendation is heard, with the government now focused on the COVID-19 vaccine roll-out.
8th March 2021
