Social drinkers across Australia brace for the year’s second tax hike on alcohol, as the ratcheting beer and spirit excise goes up again in August.
The nation’s peak hospitality body is again protesting the “crippling tax” scheduled to increase 5 August, saying it is another blow for everyday people struggling with the rising cost of living, at a time they can ill afford it.
“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,” declares AHA National CEO Stephen Ferguson.
“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.”
The ‘hidden’ tax applied to the alcohol in beverages in Australia has increased every six months for the last 35 years, to become the third highest in the OECD, behind only Norway and Finland.
The law indexes the excise duty rates for alcohol based on the upward movement of the Consumer Price Index (CPI) issued by the Australian Bureau of Statistics (ABS). It factors alcohol concentration and container size, and calculates a rate of increase as a product of the latest quarterly figures divided by the highest financial quarterly inflation since 1983.
This effectively applies a CPI-calculated increase to a component of the final products (beer and spirits), which can have the effect of amplifying any final price increase to the customer beyond CPI.
The scheduled hikes are damaging to venues, but also to producers and the farmers that supply the beer and spirits industries.
Venue operators are already facing inflation-affected prices on energy, insurance, interest and wages, and the excise bill for a pub selling 15 kegs amounts to more than $1,000 per week.
“The majority of our hotels are locally-owned family businesses, which employee locals and sell Australian made products,” offers Ferguson on the plight of hoteliers.
As the Labor Federal Government strives to put downward pressure on inflation, it simultaneously benefits from the mandated lift in excise on beer and spirits, projected to bring in nearly $8 billion this financial year.
While there may once have been an argument that the tax increases were warranted, on the basis of encouraging more people to drink responsibly, alcohol consumption has dropped significantly in recent decades, particularly via beer, and the result has become punitive rather than preventative.
The rising excise is effectively seen as a tax on socialising, coming as societies have learned the importance of people spending time out of the home with family and mates.
“And it’s a hidden tax on the jobs of the people pouring your beer or making your gin and tonic,” adds Ferguson.
It’s disgraceful that the “working man’s political party” introduced this tax in the first place. That they persist with it after more than 30 years is ridiculous.
They have no regard for the industry or its future.