Australians can look forward to more affordable beer, following the introduction of legislation to freeze the biannual tax hike on beer excise, presented in parliament today. The current system, which automatically increases the beer excise twice a year in February and August based on inflation, has contributed to average prices for a schooner or pint soaring to approximately $15. This escalation has sparked demands from brewers, bar owners, and customers to halt the contentious indexation.
Prime Minister Anthony Albanese included this freeze as part of his election campaign, promising a two-year suspension starting from August. He also proposed an increase in the excise remission cap for manufacturers to $400,000 and a similar raise in the wine equalisation tax producer rebate cap, set to take effect from July next year. During these announcements, the Prime Minister deemed the measures as “common sense” victories for drinkers and the hospitality sector.
Treasurer Jim Chalmers has referred to the freeze as a “modest change,” aimed at alleviating pressures on both the industry and consumers. This change comes against a backdrop of rising expenditure on beer and wine in Australia, which saw a significant year-on-year increase, according to June data from CanstarBlue. Specifically, the average monthly spending on beer jumped 30% from $76 to $99, whilst wine increased by 17%, rising from $66 to $77. Concurrently, beer prices have surged by 4.5% over the past year.
The financial strain imposed on the sector has led to numerous brewery and pub closures since last year, prompting industry representatives to welcome the government’s commitment to freeze the excise tax. David Canny, President of the Australian Hotels Association, expressed that the legislation would prevent beer from being classified as a “luxury item” and hailed it as a triumph for practicality amidst a current cost-of-living crisis.
In summary, the proposed legislation represents a significant step towards making beer more accessible in Australia, addressing concerns from various stakeholders impacted by relentless price increases.