Labor Freezes Draught Beer Tax in Move to Benefit Brewers and Drinkers

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Labor Freezes Draught Beer Tax in Move to Benefit Brewers and Drinkers

Labor has announced a plan to pause the biannual indexation of the draught beer excise for two years, a move expected to slightly reduce the cost of a mid-strength pint. This initiative, revealed ahead of the federal election due on or before May 17, is projected to take less than a cent off the price of a pint, which currently ranges from $10 to $18 depending on the venue. The pause in excise is anticipated to save around 18 cents on a 48-litre keg of mid-strength beer.

The proposal will not be enacted until after the elections, with the plan costing the federal budget approximately $95 million over four years. The excise freeze adjusts the tax applied to the volume of a drink's alcoholic content above 1.15 percent rather than its total volume. Stephen Ferguson, national chief executive of the Australian Hotels Association, highlighted that this excise has increased without review for four decades.

Prime Minister Anthony Albanese described the decision as a "common sense measure" that benefits multiple stakeholders.

"Good for beer drinkers, good for brewers and good for pubs," said Prime Minister Anthony Albanese.

Treasurer Jim Chalmers also weighed in, calling the adjustment a "modest change" but one that aligns with their broader fiscal strategies. This announcement follows Labor's recent decision to increase the excise remission cap from $350,000 to $400,000 for brewers and distillers starting July next year. Winemakers will also benefit by being able to claim back a rebate of up to $400,000.

The Brewers Association of Australia had previously called for an excise reduction after its last increase in February. John Preston commented on Australia's high beer taxation rate.

"We already have one of the highest beer tax rates in the world — there is no need for it to keep going up twice a year," remarked John Preston.

The freeze aims to support brewers, pubs, and beer drinkers across the country. The move by Labor has garnered support from various industry stakeholders who believe it will offer much-needed relief amid rising costs and economic pressures.

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