Spirits excise is once again scheduled for increases next month and in August and Australia’s spirits manufacturers are calling on the Government to freeze spirits tax increases and instead focus on supporting this promising industry.
In August last year Australia’s spirits tax rose to over $100 per litre of alcohol and the bi-annual indexation continues to fuel inflation and cost of living pressures, having already risen in line with the Consumer Price Index (CPI) by a total of 12.5 per cent in under two years.
Spirits & Cocktails Australia Chief Executive Greg Holland said Australia’s spirit manufacturers cannot stomach further increases to this tax, which is the world’s third highest behind Iceland and Norway.
“The Federal Government’s own data is starting to bear out the folly of this outdated excise regime,” he said.
“Despite a record high tax, the December budget update revealed a projected $170m shortfall in revenue from spirits excise in 2023-24.
“This is clear evidence that the tax is making spirits unaffordable for consumers. Continued increases would be nonsensical; consumers, manufacturers and the Government all lose out to this inefficient tax.”
Not only is the high level of tax actually causing a shortfall in the Federal Budget, but as the Government continues its fight again inflation and the high cost of living the Australian Bureau of Statistics’ September Quarter results found spirits was the largest contributor to an annual CPI increase of 4.9 per cent for the alcohol category, thanks to the bi-annual tax hike.
Holland added: “This highlights that the rising costs of alcohol, fuelled by excise increases, is being felt by hardworking Australians.”
Australian Distillers Association Chief Executive Paul McLeay said the 600 distilleries spread across the country need urgent respite from this punitive tax.
“The average Australian would be appalled if they knew just how much of the hard-earned money they spend on spirits goes directly to the Government,” he said.
“Spirits tax above $100 a litre should be a barbecue stopper this summer.
“We are calling on the Government to freeze this un-Australian and unbearable tax so we can work together to develop policy settings to support the sustainable growth of this promising industry.”
