Taxing humble frothy to the hilt is hard to swallow
1 August 2019
WHY is a pint on holidays half the price? Well, when it comes to the amber fluid, Aussies get a raw deal.
Anyone who has knocked back a frothy on their overseas trip knows the bittersweet realisation that we pay through the nose at home.
You might blame higher incomes or more expensive ingredients... but you'd be wrong.
The reality is the taxman gets his mitts into your pocket several times with every sip.
New analysis shows Aussies pay the fourth highest beer tax rate in the industrialised world.
We trail only Norway, Japan and Finland. But we pay many times more than those we usually compare ourselves with, and three times the OECD and EU weighted average of just $0.70 per litre.
On stubbies, cans and longnecks, we cough up $2.19 per litre in tax.
In Germany it's $0.12 per litre, in Spain $0.14, in the US $0.28, in Canada $0.37, in France $0.47, and in New Zealand $1.18.
Even in the UK, where "sin taxes" top a list of policies, beer is taxed at just $1.37 per litre.
The single biggest cost in the price of an Australian-made beer is tax. Beer tax and GST account for almost half (42 per cent) of the price of a typical carton of full-strength beer. At the $51.00 retail price, $21.35 is tax.
Last year beer taxes earned the government over $3.6 billion.
It gets worse. Every February and August the taxman delves deeper into your pocket, courtesy of an automatic CPI increase in the rate of Australian beer tax.
It's enough to make red-blooded Aussies weep.
All this despite Australia's markedly improved drinking culture. This is evident in Australian Bureau of Statistics data showing alcohol consumption per capita today at a 55-year low.
According to the ABS, 84 per cent of Australians drink within recommended guidelines.
That's two standard drinks a day. Binge drinking is at its lowest level, down from 21 per cent in 2004 to 16 per cent today.
Underage drinking continues a dramatic decline. The Australian Institute of Health and Welfare reports that 82 per cent of teens in Australia do not drink alcohol at all – compared to 54.3 per cent in 2004.
Those that have tried a drink are doing so older, and drinking less, than ever before.
Moderation in Australia is pronounced among beer drinkers. Over the past decade low and midstrength beers have been embraced, now accounting for more than a quarter (26.5 per cent) of all beer sales in Australia. That makes us the world-leader in market-share for light and mid-strength beers.
It proves beer is different. Beer is the leading alcohol category that provides multiple options for people
to moderate their alcohol consumption.
Yet, while Australians are drinking less alcohol in their beers, they are paying an artificiallyinflated premium due to exorbitant tax.
Cost-of-living pressures like housing affordability, power prices and stagnant wages, to list a few, require complex legislation and endless political argy-bargy before real people see relief.
Correcting our runaway and regressive beer tax regime is relatively quick, easy, cheap and long overdue.
Published in the Courier-Mail on 1 August 2019. Brett Heffernan is CEO of the Brewers Association of Australia
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