An influential hospitality lobby group has expressed concerns that the much-criticised tax will increase the cost of alcohol served on sailing ships or in pubs, while crippling small country pubs.
Sky News presenter Chris Kenny says the price of a beer in the pub for most Australians is now likely to be “over $10” with the alcohol tax hike. “There’s another hit to the cost of living with the alcohol tax,” Kenny said. “A 425ml bottle – in South Australia they call it a pint … will now cost over $10.” “It’s a big concern for pubs and clubs still trying to recover from lockdown.” Kenny sat down with Australian Hotels Association chief executive Stephen Ferguson to discuss the controversial price hike.
The semi-annual consumption tax, set to add $800 million to state coffers in the current fiscal year, has been in place since 1989 and was last raised on Feb. 4 and will be raised again on Aug. 5.
Distillers and brewers are taxed, and are calculated based on the alcohol content and volume of the product, while winemakers and cider makers are subject to a different tax.
Continued increases mean that Australia’s alcohol tax is the third highest of all OECD countries, after Iceland and Norway.
The cumulative tax is passed on to struggling venue operators and consumers, said Stephen Ferguson, president of the American Hotel Association. Photo: Glen Campbell/NewsWire
Ahead of the planned increase, Australian Hotels Association chief executive Stephen Ferguson warned that increasing the “hidden tax” amid the cost of living crisis would hurt hospitality workers and make going to the pub unaffordable.
“We call on the Government, the Opposition and the Supreme Court to support a reduction in the tax on all beers and spirits poured into a glass and served to a customer in the pub,” he said.
“It’s not the politicians who bear the customers’ grief every time a business has to pass on this hidden tax – it’s the worker or owner behind the bar who bears it.
Mr Ferguson not only described the tax as a “hidden tax on socialisation”, but also said the cumulative increase every six months was hitting businesses.
“This hidden tax – which has risen every six months for the past 35 years – will hit the pockets of pub goers at a time when they can least afford it,” he said.
“For example, this hidden tax on beer in a small country pub selling 15 barrels is over $1,000 a week – and that can make a huge difference to small businesses in the bush.”
However, any potential cuts or suspensions to the tax have been criticised by health and welfare bodies.
In February 2022, more than 80 health and community groups, including the Alcohol Research and Education Foundation, the Salvation Army, and the Cancer Council, urged lawmakers to abandon plans to cut the tax, linking increased alcohol-related harms amid booming sales during the pandemic.
“Any reductions in alcohol tax rates would result in lower alcohol prices relative to the cost of living, leading to increased harm from alcohol,” the letter said.
“Reducing tax revenues to normal levels would also reduce government resources that are desperately needed to manage this pandemic.”
