Hoteliers and brewers blast tax hit

06 July, 2020 by Andy Young

The August CPI increase on beer and spirits will go ahead, despite widespread industry pleas to the Government to freeze this tax hit.

While other countries have deferred or frozen tax increases, the Australian Government has pressed ahead with this second increase of the year, and the Brewers Association of Australia (BA) and the Australian Hoteliers Association (AHA) have hit out, saying it is the wrong time to make Australians pay more for their beer and spirits.

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Brett Heffernan, BA’s CEO said today: “As the hospitality industry battles with the devastating economic impacts of COVID-19 this latest increase in tax comes at a time when publicans and patrons can least afford it.

“We appreciate politicians of every persuasion are urging people to get down to their local for a beer to support local jobs. However, the taxman will be there, from 3 August, imposing the biggest beer tax ever.

“The Federal Government has the opportunity to stop the increase as the hospitality sector recovers from COVID-19. We seek its support to do so.

“At $2.26 per litre, Aussies already pay the fourth highest beer tax in the industrialised world. They then pay another 10% GST on top. A substantial 42% of the price of an Aussie-made stubby is tax. A typical carton of 4.9% alcohol beer retails for $52.00 – of that, $22.05 is tax. Australian drinkers are essentially shouting the taxman 10 of their 24 stubbies.

“Tax is the most expensive ingredient in Aussie beer. It’s not the inputs, production, freight, packaging, advertising or retail overheads and profits, it’s Australian Government tax.”

AHA CEO Stephen Ferguson said it is the wrong time for a tax hit as pubs strive to re-open and re-employ the almost 500,000 jobs lost across the hospitality sector.

“This hidden tax creeps up,” Ferguson said. “People are bemused to learn how much tax is in a beer and that it has automatically gone up every six months for the last 37 years. This year, it’s the last thing struggling pubs and their patrons need.

“Workers across the country are doing it tough this year with drought, bushfires and now ongoing COVID-19 restrictions and tourism bans. Loading more tax on a drink doesn’t help anyone.”

The two associations pointed out that that freezing the CPI increases on beer and spirits for a year is revenue neutral for the government, but would be much-needed relief to consumers and publicans.

“Increasing the tax only makes life harder for everyone, while a freeze would see the government continue to collect the same rate of tax on beer and spirits as it does today,” Ferguson said.

Heffernan added: “Germany has deferred its beer tax from $0.13 (AUD) to zero in response to COVID. The Brits froze their beer tax at $1.52 (AUD). There is no logical reason for Aussies to be paying even more for a beer as we all try to emerge from this crisis, especially when so many are doing it tough.”