Australians pay the fourth highest excise (tax) on beer in the industrialised world. They then pay another 10% GST on top of everything, including the excise tax, at the retail end. That excise rate of tax in Australia is automatically increased every six months. Frankly, enough is enough…
Taxes on beer drinkers netted the Australian Government $3.593 billion last year – that’s $2.01 billion in excise, $201 million in GST on the excise, then a further $1.3 billion in GST at the retail end.
- ACIL Allen Consulting, Economic Contribution of the Australian Brewing Industry 2018-19 from Producers to Consumers, March 2020.
By far the biggest cost in the price of an Australian beer is Australian Government tax. Tax accounts for almost half (42%) of the price of a typical carton of full-strength beer. Of the $52.00 retail price, a whopping $22.05 is tax.
- ACIL Allen Consulting calculation following the 3 February 2020 Australian Tax Office CPI increase. Based on one 24-bottle carton of 375ml bottles of 4.9% ABV beer attracting $17.32 excise and $4.73 in GST on the RRP of $52.00.
Australians pay the 4th highest beer tax in the industrialised world. The table below ranks beer taxes around the world, expressed in Australian dollars (as at February 2020), per litre of alcohol.
Norway $3.62
Japan $2.92
Finland $2.46
Australia – packaged $2.26
Australia – draught $1.59
United Kingdom $1.52
Ireland $1.50
New Zealand $1.26
France $0.50
Italy $0.50
Canada $0.35
United States $0.31
Spain $0.15
Germany $0.13
- Prof Kym Anderson, Excise Duties on Beer: Australia in International Perspective, School of Economics, University of Adelaide, February 2020. (AUD, beer assumed to be typical 4.4% ABV for comparison purposes).
At $2.26 per litre for packaged beer, Australians pay 17 times more beer tax than Germany ($0.13), 15 times more than Spain ($0.15), 7 times more than the US ($0.31), 6 times more than Canada ($0.35), 4.5 times more than France and Italy ($0.50), and approaching double that of New Zealand ($1.26). Australians pay one-third more than the UK ($1.52).
- Prof Kym Anderson, Excise Duties on Beer: Australia in International Perspective, School of Economics, University of Adelaide, February 2020. (AUD, beer assumed to be typical 4.4% ABV for comparison purposes).
Australia is the only OECD/EU country applying different excise rates to beer, at $2.26 per litre for packaged beer and $1.59 per litre for draught beer. The weighted average, given 75% of beer sales are for packaged beer, is $2.09 per litre.
- Prof Kym Anderson, Excise Duties on Beer: Australia in International Perspective, School of Economics, University of Adelaide, February 2020. (AUD, beer assumed to be typical 4.4% ABV for comparison purposes).
Compared with countries of similar per capita income (US$54,180 in 2016, according to the World Bank’s Atlas Method) Australian beer drinkers are paying a greater proportion of their income in filling government coffers. Excise from beer in Australia represented 0.59% of federal tax revenue in 2017-18. In the EU, the average for beer excise as a proportion of tax revenue in countries at the same income level was just 0.37%.
- Prof Kym Anderson, Excise Duties on Beer: Australia in International Perspective, School of Economics, University of Adelaide, August 2019. (AUD, beer assumed to be typical 4.4% ABV for comparison purposes).
In the wake of COVID-19 freezing the six-monthly CPI beer tax increase would provide immediate tax relief to consumers when many are unemployed, under-employed and/or conscious of price pressures. At a time when consumers are likely to be tentatively returning to pubs, clubs, restaurants and cafes they should not face new tax hikes.
- Brewers Association of Australia policy position.