Axing beer tax will make trendy craft brews cheaper

TREASURER Scott Morrison will be the toast of the local pub after vowing to end a bizarre beer tax that holds craft breweries back.

Trendy beers such as those from the 4 Pines brewery have been sold under the tax to be axed.

TREASURER Scott Morrison has vowed to end a bizarre beer tax that slugs craft breweries 40 per cent more simply because they use smaller kegs.

The Budget move will mean some of Sydney favourite frothies — like Hair Man and Young Henry’s — will soon be cheaper. Other brands that could see a price drop include Snowy Mountains and Batch.

Mr Morrison said he will give the craft beer industry what is effectively a tax cut to allow them to compete on a level playing field with the major beverage companies, especially multinationals.

Ben Alba pulls a pint at The Lord Nelson Brewery Hotel — another brewhouse to benefit.

He said there are more than 380 craft brewers in Australia and 100 domestic distillers in a $400 million industry that employs about 4000 people.

“This not only champions the craft brewers that we’ve all grown to love, it raises a very tantalising prospect for Australians: the likelihood of cheaper craft beer,” Mr Morrison said.

A two-tier system in Australia means draught beer sold in 50 litre kegs is taxed at $34 a litre, but the same beer in a keg under 30 litres attracts a $49 a litre tax.

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“This is unfair for smaller brewery businesses,” Mr Morrison said.

Currently, alcohol manufacturers can claim a refund of 60 per cent of the excise duty they have paid on beer or spirits up to a maximum of $30,000 a year.

This will increase to $100,000 from July 1 next year — and will now apply to all brewers and distillers for the first time.

“These brewers are predominantly small businesses and could benefit both from the increase to the excise refund cap and extended access to the concessional draught beer excise rate,” Mr Morrison said.

The prospect of cheaper beer is one of several sweeteners that will be included in Tuesday’s federal Budget, which is expected to be the last before an election is held in May next year.

There will be personal income tax cuts for middle-income earners on $87,000 a year or under.

Significant funding will be dedicated to building new road and rail projects across the country too.

And it’s understood looking after Australians as they get older will also be a major focus, with a big injection of funds into Medicare.

Originally published as Axing beer tax will make trendy craft brews cheaper