Industry associations are joining pubs and clubs in calling for relief from the ratcheting tax on draught beer, as businesses attempt to recover from the impacts of COVID.
A campaign fronted by the National Australian Hotels Association, along with Clubs Australia and the Brewers Association, is rolling out around the country, starting in Queensland this week, on the eve of the latest tax increase (1 February).
Queensland Hotels Association CEO Bernie Hogan asks that both pubs and drinkers “get a break”.
Currently the government collects around $7 billion annually in all alcohol excise. Draught beer makes up about $300 million of this, with a disproportionate effect on a drink in a licensed venue.
“Excise is a significant issue for pubs and people who enjoy a beer,” AHA CEO Stephen Ferguson told PubTIC.
“We believe there should not be a tax on jobs and that they should be treated differently to packaged or bottled products sold in bottleshops, simply because of the labour used to pour it and the sociability of venues.”
The AHA is hoping to see government policy over time reflect the principle that beverages poured into a glass in a licensed premise are either excise-free or taxed at a substantially reduced amount, on the basis that labour required to serve the drink creates employment.
Draught beer from a keg has an established and measured tax rate, making it only a matter of policy to change. Other beverage types are more complex, due to inconsistency in format and usage.
The initiative aims to have the excise reduced from the current $70 per keg (around 60c per schooner) to $35 (30c per schooner). This would reduce government tax collection by around $150 million, which would likely be made up in total excise within six months, and in turn foster business and employment, further recouping the outlay.
This principle has already been adopted in other countries. Britain’s chancellor recently reduced tax paid by pubs on drinks at the pump by five per cent, reports The Guardian, which amounts to around $53AU across a keg – greater than being requested in Australia.
Ferguson says excise is a “hidden, silent tax”, legislated to increase twice every year, which must be passed from the business to the consumer.
It flies in the face of government lip-service on reducing the cost of living, and as a discriminatory, ratcheting tax it assumes the value of a product continues to rise – even while venues struggle with reduced patronage post-pandemic.
The campaign comes as hotels and clubs hope for it to be as affordable as possible for people to get out and socialise and support local businesses, and the roadshow is currently in Burnie, on a listening tour around Tasmania discussing the matter with politicians and publicans.
Similar calls in the past for freezes on excise have fallen on deaf ears. To optimise their outcome potential the associations are not asking for cash – such as has been given to airlines, builders and travel agents – instead simply asking “tax us less”.
“We’re trying to meet the government halfway, recognising that they have had to get us through the pandemic and have a revenue issue they need to address,” adds Ferguson. “So we believe this is more than reasonable.
“With people still reticent to leave home and go to the pub, any sort of stimulus will help.”
The breweries for the last 25 years have increased the cost of tap beer disproportionately to packaged beer and the increase has been exactly the same regardless of the CPI movement except the last one that did have a 3% CPI and put it up 7 dollars the 2 major breweries have as much to blame as the government CPI increases for the price of tap beer