A proposed (and temporary) halving of the excise tax on beer has been met with widespread fury. The $153 million proposal announced by the Treasurer is aimed at helping pubs, bars, and clubs recover from Covid restrictions.
The justification for the extremely high tax on alcohol was meant to be about ‘safety’ to deter drinking habits (although the more cynical point out that it is one of the government’s largest and most reliable tax earners).
Unsurprisingly, distillers and other spirit manufacturers are furious. It would leave their alcohol products at a significant market disadvantage, threatening Australian boutique industries that have struggled through the pandemic.
Beer manufacturers are the market giants and have asked for a 50% reduction in their excise due to pandemic measurers, even though it seems inappropriate that Frydenberg would play favourites with distillers and interfere in their market.
Outrage about government intervention in what should be a competitive market would be understandable, but that was not the criticism that emerged.
“Why would you deliver a tax cut that ignores the choices of nine out of ten Australian women?” said Greg Holland, the chief executive of Spirits and Cocktails Australia.
“Imagine Scott Morrison or Treasurer Josh Frydenberg walking into a bar and shouting a round of beers for a bunch of blokes, while turning their back on the women enjoying a quiet gin and tonic or cocktail after work. It would be considered outrageously sexist and out of date – but that is exactly what this proposal represents.”
Holland then suggests that Frydenberg apply his tax discount evenly across the alcohol industry. It is not a popular tax to begin with, as it cripples Australian distillers.
Australia’s taxes on alcohol are among the highest in the world with more than half the retail cost of a bottle of gin going to the government in tax.
Excise tax rises every six months, regardless of the collapse of alcohol sales during the pandemic when hospitality venues spent months shut and then opened at reduced capacity.
“I know what the industry has been asking for, like all industries, and they put in the budget bids,” said Frydenberg.