Beer tax cut push to cure COVID hangover

Callum Godde
(Australian Associated Press)


Australian brewers want the federal government to slash the beer tax for pubs and clubs to help lift the hospitality sector out of its COVID-19 hangover.

In a submission for next month’s federal budget, the Brewers Association of Australia pleads its case for a 50 per cent reduction in the excise rate on draught beer.

The peak industry body says small to medium pubs that buy about 15 kegs a week would save $465 a week in beer tax under the proposal, allowing businesses to pour more money into promotions or pay down debt.

John Preston, chief executive of the group that represents major Australian brewers Carlton & United Breweries, and Lion and Coopers, argues a significant cut would help venues cope with future lockdowns and ongoing capacity limits.

“A 50 per cent reduction in the excise rate on draught beer would deliver a massive boost to hospitality business owners at a relatively small cost to the government,” he said on Wednesday.

“Beer anchors pubs and clubs, and these businesses need a break.”

Under its modelling, the Brewers Association says a 50 per cent reduction would cost the federal treasury $150 million from its annual beer tax revenue of $2.5 billion.

“Beer tax in Australia is the fourth-highest in the developed world,” Mr Preston said.

“Given more than 85 per cent of beer consumed in Australia is made in Australia reducing beer tax should also be a priority to support the 100,000 jobs that rely on brewing and the hundreds of millions of dollars of produce we source from Australian farmers.”

If a cut to the excise won’t be granted, the lobby group wants the government to consider freezing the rate or stopping current automatic, six-monthly increases.

New industry sales data shows there was a 30 per cent fall in draught beer sales in 2020 compared to the previous year, representing more than $1 billion in lost revenue for pubs and clubs.

“These figures clearly demonstrate the impact of lockdowns across Australia on pubs, clubs and the brewing industry with staggering falls in sales volumes through pubs and clubs of 94 per cent and 96 per cent for April 2020 and May 2020,” the group said.

It also noted the brewing industry and hospitality sector carried the cost of tipping out 373,500 kegs – equivalent to about 44 million schooners – as venues were forced to close.

AAP has approached Treasurer Josh Frydenberg for comment on the pre-budget submission.


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Categories: Tax