Trouble brewing as beer makers call for tax cut

    Phillip Hudson
    Herald Sun
    April 21, 2013


EXCLUSIVE: THE Government is being asked to freeze tax on beer to give drinkers a bit of relief.    

The beer industry says it is suffering from one of the highest tax rates in the world and has urged Treasurer Wayne Swan to freeze excise in next month's Federal Budget.    

Beer tax is due to rise again on August 1, reaping an extra $35 million over the next six months for the Government by adding about 1c to a 285ml glass of full-strength beer served over the bar and 20c to 30c extra to the cost of a slab of beer.

In a confidential submission to Treasury, Carlton & United Breweries says the beer industry is "no longer recession proof" and has been hit by households spending less on beer as they tighten their belts.    

It said tax now makes up 50 per cent of the price of a $37 case of VB.    

CUB is calling on Mr Swan to take a lead from the UK where the Government has cut beer tax for the first time in 54 years despite severe austerity measures.

UK Chancellor George Osborne not only cancelled a three-pence tax rise but gave drinkers a tax cut, saying he was taking "a penny off a pint".

CUB corporate affairs director Jeremy Griffith said the tax on a litre of pure alcohol in Australia was $32 for beer compared with $2 in California, $3 in Germany, $6 in Canada, $10 in Greece and $28 in the UK.

"Beer tax in Australia is very high compared to other countries." Mr Griffith said.    

"All we are asking for is a freeze to provide relief for Australian beer drinkers."

Beer tax is increased twice a year under inflation-linked indexation of the so-called "sin taxes", which include spirits and tobacco.

This automatic excise change was introduced by Bob Hawke 30 years ago to avoid Budget-night headlines saying "beer, cigs up" and has been kept by Paul Keating, John Howard, Kevin Rudd and Julia Gillard.

The Government argues CPI grows slower than wages, meaning pay rises are outstripping the tax rise.

Petrol taxes were also increased the same way until Mr Howard announced a freeze in 2001 amid controversy about the impact of the GST on pump prices.

CUB, which owns Victoria Bitter, Cascade, Carlton Draught and Strongbow cider, said the beer and cider industry contributed $4.3 billion a year to the economy through buying agricultural products such as wheat and barley, and supporting retail, tourism and hospitality.

Read more: http://www.news.com.au/money/cost-of-living/trouble-brewing-as-beer-makers-call-for-tax-cut/story-fnagkbpv-1226625443458#ixzz2RcZV9YYh