Draught plan: tax reform proposal targets tap beer

Tax proposal targets beer, wine


National Issues
Tax reform is needed to curb harmful levels of alcohol consumption, according to the anti-alcohol lobby.

Tax reform is needed to curb harmful levels of alcohol consumption, according to the anti-alcohol lobby.

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Pub drinkers will be hit hardest by a new tax plan to hike alcohol prices for types of alcoholic drinks

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SUMMER is in full swing, the drinks are flowing and once again the annual silly season ritual is accompanied by calls from anti-alcohol campaigns.

Primary producers are not likely to toast the Foundation for Alcohol Research and Education’s (FARE) call for tax hikes to reduce alcohol consumption, which are focused on wine and beer.

FARE’s pre-budget submission to the federal government, released yesterday, called for tax reform which it said would reduce consumption by more than 9.4 per cent, delivering a $2.9 billion annual saving in healthcare and other costs associated with excessive alcohol consumption.

Brewers Association chief executive Brett Heffernan said tax hikes to deter consumption was “out of whack with what most people think is a fair and reasonable approach”.

“Demand is inelastic, it’s not subject to price,” he said.

“It’s lazy and flawed policy. It penalises the vast majority who drink responsibly while doing nothing for those few at risk of harm.”

FARE’s submission said each day 15 Australians die and 430 are hospitalised because of alcohol and costs the community $11 billion a year.

The lobby group wants alcohol tax to rise by at least 10pc for all products. The 50pc tax break afforded to draught beer compared to bottle sales should also be lifted.

It also wants a new volumetric tax should sit alongside the Wine Equalisation Tax with producers required to pay the larger of the two. The volumetric rate would rise over time to curb the impact of cheap wine sales and be fixed to reflect wine’s alcohol content.

Barley growers sell about 1 million tonnes of their crop to domestic beer consumption, which also takes in about 600t of local hops a year.

“The beer sector is a significant customer for those commodities, anything that affects price would go back to the growers, which would be very disappointing,” Mt Heffernan said.

He said Australian beer is taxed at more than twice the OECD average.

“Of the $47.99 retail price of a typical 24-carton of full-strength beer, $15.08 of that price is tax. It means the single most expensive ingredient in beer is Australian government tax..”

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