E-Malt. E-Malt.com News article: Australia: Hospitality industry calls for beer tax to be scrapped or frozen before it comes into force

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E-Malt.com News article: Australia: Hospitality industry calls for beer tax to be scrapped or frozen before it comes into force
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The hospitality industry is calling for Australia's beer tax to be scrapped or frozen before it comes into force next month, the Daily Mail reported on July 6.

The Australian Federal Government currently taxes an average of A$2.26 per litre of beer, which is set to increase to an unknown amount on August 1.

Without the increase, Australians already pay the fourth highest tax on beer in the industrialised world after Norway (A$3.46), Japan (A$2.92) and Finland (A$2.46).

Germany dropped its low beer tax of A$0.13 per litre to zero amid the COVID-19 pandemic while the UK froze its tax at A$1.52 to provide certainty to businesses.

Now, pubs and brewers are calling for the tax increase to either be scrapped or for the tariff to be frozen at its current level.

Brewers Association of Australia CEO Brett Heffernan said 'there is no logical reason for Aussies to be paying even more for beer'.

‘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,' Mr Heffernan said.

'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.'

Beer taxes have automatically increased twice a year in accordance with the Consumer Price Index (CPI) ever since August 1983.

When the beer excise rate increases on August 1, it will be the 72nd time Australia has increased the tax.

The Brewers and Hotels Associations have urged the federal government to not increase the tax - at least for this year amid the COVID-19 pandemic.

'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,' a joint-statement read

The most recent tax increase came in February, when it jumped up by 1.2 per cent.

If a similar increase occurs in August, the new average price will jump from A$2.26 to roughly A$2.29 per litre of beer.

While a one per cent increase may not seem like much, Australian Hotels Association CEO Stephen Ferguson said: 'This hidden tax creeps up.

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.

'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.'

Brewers Association CEO Mr Heffernan agreed, saying that '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,' Mr Heffernan said.

'At A$2.26 per litre, Aussies already pay the fourth highest beer tax in the industrialised world. They then pay another 10 per cent GST on top.

'A substantial 42 per cent of the price of an Aussie-made stubby is tax. A typical carton of 4.9 per cent alcohol beer retails for A$52.00 – of that, A$22.05 is tax. Australian drinkers are essentially shouting the taxman 10 of their 24 stubbie.'

A report commissioned by the Brewers Association of Australia says Australians pay an average of A$2.26 per litre of packaged beer and A$1.59 for draught.

By comparison, New Zealand charges A$1.26 per litre, Ireland charges A$1.50, the US charges A$0.31 and Canada charges A$0.35.

The report also concluded Australian tax rates on beer stand as the fourth-highest beer tax amid developed countries.

The most taxed country was Norway, where the government charges A$3.46 per litre of beer, followed by Japan with A$2.92 and Finland at A$2.46.

Excise taxes on alcohol reduce the harmful use of alcohol and help governments offset economic costs of alcohol abuse, according to the World Health Organisation.

Over the last year, the Federal Government racked in A$3.6 billion from alcohol duties.

An ATO spokeswoman said the tax on beer increases in line with the Consumer Price Index (CPI) twice a year, the latest of which has not been released yet.

The Australian Bureau of Statistics is expected to release the latest CPI on July 29, which will reveal exactly how much the beer tax will increase by.


07 July, 2020

   
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