Beer and the tax man’s triple tipple


Sir – August heralds the Australian Tax Office’s six-monthly automatic ratcheting up of beer excise.
Beer drinkers are consuming moderate levels of alcohol compared to other beverages but doing a disproportionate amount of the heavy-lifting in filling government coffers.
The latest 2016-17 data on beer and taxes is sobering. Most people are not aware that they are slugged three times by the tax man when buying their beloved brews.
The first hit is the excise on beer. This is calculated on alcohol content. Despite beer being by far the lowest concentration of all alcohol products, beer excise netted the Australian Government the biggest return of $2.38 billion.
Not only does Australian beer excise rank among the highest in the world – despite per capita consumption of beer falling 60% over the last four decades – our excise automatically goes up every February and every August.
The second slug is GST on the excise. That’s right, consumers pay 10% tax on the tax. This reaped the Australian Government $238m.
The third whack is GST at the retail end. Be it at the bar or off-the-shelf, another 10% GST is paid on the wholesale price. We estimate that the Australian Government will pocket around $1.6 billion over 2016-17.
All told, that’s a tax trifecta worth a whopping $4.2 billion in just one year, just from beer.
Beer is the drink of moderation. It is the only alcohol category providing low- and mid-strength options for consumers to control their intake. Australians lead the world in their support for these beers accounting for a quarter (24%) of all Australian beer sales.
Yet, the absurdity of the Wine Equalisation Tax (WET) saw just $850m collected from wine in 2016-17. There has been no increase in the WET since it was introduced almost 20 years ago. In fact, the very minor category “other alcohol beverages” collected more in excise in 2016-17, at $923m, than the WET reaped from the entire wine industry.
Spirits collected the next most in 2016-17 at $2 billion in excise.
To put alcohol products in perspective:-
2 x 375ml full-strength beer stubbies at 4.9% alcohol = 2.8 standard drinks.
1 x 750ml bottle of wine at 14.5% alcohol = 8.6 standard drinks.
1 x 700ml spirit bottle at 40% alcohol = 22 standard drinks.
Bizarrely, it’s beer drinkers who are paying the most in alcohol tax despite imbibing a fraction of the alcohol.
Typically, a full-strength beer at between 4.2% and 5% alcohol, volume for volume, is one-third the alcohol content of wine. It’s even less for low- and mid-strength beers, which now make-up one-quarter of all beer sales in Australia.
Likewise, compared to the 40% alcohol content of spirits, full-strength beer is one-eighth the alcohol content of a typical bottle of vodka, rum, whiskey, etc, and less, again, for lower alcohol beers. You’d have to drink more than seven litres of full-strength beer to match the alcohol content of one 700ml spirit bottle.
It makes no sense for Aussie beer drinkers to be footing the biggest alcohol tax bill. They’ve earned a reprieve for doing the right thing as responsible, moderate drinkers.
Serious excise reform that recognises beer’s unique place as the drink of moderation is possible, affordable and long overdue in Australia. The Brewers Association of Australia is currently examining a comprehensive raft of reform options to give beer drinkers the recognition and relief they deserve.
Brett Heffernan, CEO
Brewers Association of Australia 


  1. Given the ravages alcohol wreaks on society and the economy, I have never been able to understand why the government has arranged for beer drinkers to subsidise wine drinkers.
    Nor have I been able to understand why alcohol advertising is still permitted, when tobacco advertising was banned many years ago.
    I don’t know of a single case where someone has bashed another to death as a consequence of smoking a packet of cigarettes.

  2. This is a very good example demonstrating beyond any doubt that there is something fundamentally very wrong with government and administration in Australia.

  3. Bob: Down here in many parts of Melbourne, it is an every day or night occurrence to be approached on the streets by individuals or groups of every ethnic background with this direct question: “Hey bro, mate, got a smoke?”
    Red Alert!
    Before you respond, it is very wise to have a quick look behind you, then look where their hands are and prepare to do a runner.
    The wrong answer,the wrong look and you are in danger of a flogging, or worse.
    It is one of the more common preludes to physical assault, grievous bodily harm, mugging.
    Ciggies are more and more deadly, at least down here in the (ahem) Big Smoke.

  4. @ Alex Nelson. Posted August 10th, 2018. 12:22pm.
    A scintillating comment, Alex.
    Take, for example, the full page advertisement in a national newspaper, paid for in part by the Gunner Government, about the “right” of Territorians to euthanasia.
    As you are well aware, this was proposed by the Perron CLP Government in the late 1980s.
    As was recently pointed out, self-government failed Indigenous Territorians.
    The poster that once depicted the CLP as a cowboy outfit has gone full perestroika.

  5. @ Alex Nelson. Posted 13th August, 2018 at 10:18pm: There is a considerable difference between Mr Gorbachev and Mr Putin which suggests that reform is whimsical.
    I could go on about Mr Giles and Mr Gunner, but perhaps, Dylan’s “A Hard Rain’s Gonna Fall” should be the tune at the next Cavenagh Street May Day march?


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