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For beer lovers in Australia, the price of their beloved beverage has been steadily increasing. While many factors contribute to this, one of the most significant is the country's tax on alcoholic beverages. This tax, known as excise duty, is added to the cost of all alcoholic drinks, including beer. As a result, Australian beer is in the top 25% most expensive in the world.
Excise duty is a tax imposed on the production or sale of certain goods, including alcohol. The tax is levied by the federal government and is designed to raise revenue while also discouraging excessive consumption of alcohol. The rate of excise duty applied to beer varies depending on the alcohol content of the beverage. In Australia, the current rate of excise duty on beer is AUD $49.67 per litre of pure alcohol.
This high rate of excise duty has led to significant increases in the price of beer in Australia. According to a report by the AustralianBureau of Statistics, the average price of a carton of beer in the country has increased by over 50% in the past decade. This rise in price is largely due to the impact of excise duty.
In fact,Australia's beer tax rises twice each year, as it is indexed to inflation. So, every time inflation rises, so too does the excise. It’s easy to see how 2022 and 2023 so far have impacted the cost of alcohol with this in mind.
The impact of excise duty on beer prices is further exacerbated by the Goods and Services Tax (GST) imposed on all goods and services sold here. In the case of beer, the GST is added to the total price, including the excise duty. As a result, Australians pay tax on tax, resulting in what the Brewers Association says made the government $3.593 billion in2018-2019 fiscal year alone! Weigh that number against what would likely be much higher for 2022-23 year considering excise increases.
All-in-all though, Australia ranks somewhere between 23rd and 27th most expensive in the world for beer, so we could be worse off.
While the high cost of beer in Australia may be frustrating for beer lovers, it is important to recognise the role that excise duty plays in this. While there may be arguments for reducing or removing the tax, it is important to consider the potential consequences of doing so. For example, reducing excise duty on beer could lead to increased alcohol consumption, which could have negative impacts on public health and social wellbeing.
Tax may be a bitter pill for some, but when you consider the benefits that our tax dollars give us overall, we’ve got little to complain about.
As with any tax matter pertaining to your personal or business activity, the Attune team are here to offer you tailored, strategic advice to help you achieve your financial goals. If you’d like to discuss your situation, give the team a call on 1300 866 113 or send us an email to start the conversation.
