Huge relief for Aussies when buying a beer at the pub - what you need to know

By FREDDY PAWLE and CAMERON CARPENTER, DEPUTY NEWS EDITOR, AUSTRALIA

Published: | Updated:

Australians could soon see some relief from rising everyday costs after the Opposition called for a freeze on the alcohol excise.

Nationals leader David Littleproud indicated the Coalition would be looking to 'alleviate some pressure' for pub owners and patrons if they win the next election.

Brewers of beers and spirits have been outspoken on the tax - indexed for inflation every six months - forcing them to pass the extra cost onto Aussie drinkers.

It was last increased by two per cent in August, leading to a tax of 43.22 per cent on alcohol in a keg for popular beers such as VB or Carlton Dry.

Mr Littleproud said the tax was just another stress for Aussies during a cost-of-living crisis and would be looking to keep it stabled for its next indexation in February. 

'When (Aussies) don't have the disposable income, and then you continue to tax, it makes it even harder for them to come out, not just have a beer but to have a meal,' he told Weekend Today.

Labor's Health and Aged Care Minister, Mark Butler, however indicated the government would instead prioritise other cost-cutting measures. 

'This is not a focus of our government. Cheaper medicines, not beer,' he said. 

The National Party has indicated they will be looking to freeze any increases to the alcohol excise to alleviate pressure for Aussie brewers, pub owners and consumers (stock image)

The National Party has indicated they will be looking to freeze any increases to the alcohol excise to alleviate pressure for Aussie brewers, pub owners and consumers (stock image)

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Spirits & Cocktails Australia chief executive Greg Holland said the tax increase could not be justified during a cost-of-living crisis.

'Enjoying a drink with friends is one of life's few simple pleasures for Australians who are currently struggling with the cost of living,' he said just prior to the increase in August.

'Sadly, this custom is increasingly being priced out of reach for many people, thanks to relentless alcohol tax hikes every six months.'  

While beer drinkers see a lower tax burden passed on due to lower alcohol percentage, the increases are still cutting deep into brewers' pockets.

'Almost 50 per cent of the price of a slab is federal tax so it's just as significant for beer as it is for spirits,' Brewers Association of Australia chief executive John Preston said.

Mr Preston said excise was contributing to the closure of pubs and clubs, with hospitality venues making up 15 per cent of Australian business insolvencies.

'This is just another blow that they don't need,' he said.

Aussie brewers have been outspoken about the tax - indexed every six months on inflation - as they have to pass on the costs to consumers to stay afloat (stock image)

Aussie brewers have been outspoken about the tax - indexed every six months on inflation - as they have to pass on the costs to consumers to stay afloat (stock image)

'Increasingly, pubs and hospo businesses are struggling to stay afloat, pub owners are saying the increase in beer tax is making it unaffordable for people to come out for a beer.'

Flower Hotels group owner Alistair Flower said Australians were choosing not to go out because they simply couldn't afford the luxury of drinking at a pub.

'The schooners can range from $7 and $10 and when you go into Sydney it can be $9 to $15,' he said.

'It's quite unsustainable, we have a lot of people who enjoy coming to the pub for inclusion and connection, especially pensioners.'

While brewers, pubs and consumers will be hoping for inflation rates to fall before February, mortgage holders have their fingers crossed for an interest rate cut on Tuesday.

But RBA Governor Michele Bullock warned the bank's board 'does not predict we will be in the position to cut rates in the near term'.

They could however be seeing cost-of-living relief in coming months after the Australian Securities Exchange's RBA Target Rate Tracker on Tuesday predicted four interest rate cuts by mid-to-late 2025.

The tracker predicts a 25-basis-point interest rate cut in February, followed by three additional cuts by August.

If this holds, the official cash rate would drop from 4.35 per cent to 3.35 per cent and provide relief from the most aggressive hikes since the late 1980s.

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