Federal Budget Tax Cuts for Liquor Producers

beer brewery

The federal government has announced tax cuts for small brewers and distillers who could receive up to $250,000 in tax breaks.

The support package for Australia’s craft brewers and distillers will see an average of $55,000 dollars into their pockets according to the Treasury. These changes are all a part of this month’s budget. This will triple the amount of liquor; producers can sell before the excise tax applies.

Moving forward from July 1st, smaller breweries and distilleries will be able to claim their refund on any excise they have paid up to $350,000 per year. This differs drastically from the current system which has them able to claim 60 percent of excise, up to 100,000 annually.

The Brewers Association of Australia CEO John Preston told Sky News, “last year was a terrible year for many businesses but for hospitality and the beer industry it was particularly bad. We saw 44 million schooners of beer that had to be destroyed because of lock-downs and … $1 billion of lost sales across pubs and clubs in Australia. That’s why this is a great first step from the government”

Preston also went on to say that Australia has the fourth-highest beer tax in the developed world as it continues to increase twice a year. This means that in times of a pandemic these tax cuts are desperately needed.

Treasurer Josh Frydenberg said that these measures will spark investment in these sectors. This will help preserve the jobs of the about 15,000 people currently working in these sectors.

“This change will allow these small businesses right around Australia … to go and hire more people, to go and invest in their business to grow, to get the new equipment and machinery that they need,” he said.

There are currently 600 brewers and 400 distillers across Australia, roughly two-thirds in regional or rural areas. This number exceptional because they have drastically risen over the past ten years, going from 28 in 2014 to 400 today.

The Treasury estimates that these measures will be worth $255 million to the industry annually. This has been well received by The Brewers Association who during COVID-19 has seen their sales go down by a billion dollars.

“This change will allow these small businesses right around Australia … to go and hire more people, to go and invest in their business to grow, to get the new equipment and machinery that they need,” he said.

Peter Philip, the chairman of the Independent Brewers Association and founder of Sydney-based Wayward Brewing Co, has said that about 42 cents in every dollar of the revenue from independent brewers has been taken in some form of federal tax.

“Excise tax is the single largest component of the cost of making a litre of beer and it’s one of the highest beer taxes in the world,” he said. “With this change, small brewers will be able to invest more in people, equipment, and facilities to meet growing demand,” Philip stated.

Many industries have struggled to survive in a pandemic economy. Obviously, the sectors relating to alcohol are not spared from this. Luckily, the government is slowly but surely working its way around fixing these problems and preserving the industries within the country until this pandemic passes. This tax cut is just one step that is needed to help stabilise the economy.

Roy Ellery

Roy Ellery

Roy Ellery is the founder and creator of Adore Australia, he lives in Melbourne, Australia. Roy is a professional website developer by trade, and runs the Adore Australia blog as a hobby.

You may also like...

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.