AUGUST heralds the Australian Tax Office’s six-monthly automatic ratcheting up of beer excise.
Beer drinkers are consuming moderate levels of alcohol compared to other beverages but doing a disproportionate amount of the heavy-lifting in filling government coffers.
The latest 2016-17 data on beer and taxes is sobering.
Most people are not aware that they are slugged three times by the tax man when buying their beloved brews.
First hit is the excise on beer. This is calculated on alcohol content. Despite beer being by far the lowest concentration of all alcohol products, beer excise netted the Australian Government the biggest return of $2.38 billion.
Not only does Australian beer excise rank among the highest in the world – despite per capita consumption of beer falling 60 per cent over the past four decades – our excise automatically goes up every February and every August.
Second slug is GST on the excise. That’s right, consumers pay 10 per cent tax on the tax. This reaped the Australian Government $238 million.
Third whack is GST at the retail end. Be it at the bar or off-the-shelf, another 10 per cent GST is paid on the wholesale price. We estimate that the Australian Government will pocket around $1.6 billion over 2016-17.
All told, that’s a tax trifecta worth a whopping $4.2 billion in just one year, just from beer.
Yet, the absurdity of the wine equalisation tax (WET) saw just $850 million collected from wine in 2016-17.
There has been no increase in the WET since it was introduced almost 20 years ago.
It makes no sense for Aussie beer drinkers to be footing the biggest alcohol tax bill.
Serious excise reform that recognises beer’s place as the drink of moderation is possible, affordable and long overdue in Australia.
Brewers Association of Australia CEO