Active lobbying by Queensland brewers has forced the state government into a back flip on fire levy changes that saw a massive tax increase for brewers.
After Queensland’s Department of Fire and Emergency Services initially dismissed brewers’ concerns about the changes saying they actually represented a saving to them, the Government has been forced to introduce new classifications appropriate to the size state’s nascent craft breweries.
Under the Government’s initial plan, for which it undertook no industry consultation or business impact analysis prior to changing the levy, Queensland’s brewers would have been required to pay a levy of $5,224.20 – a rise of 900 per cent for many.
In a significant backdown, Minister for Manufacturing Cameron Dick has recognised the initial changes got it wrong.
“The [new] changes formally recognise that smaller, niche beer, cider and spirit makers shouldn’t be charged the same rate as much larger operators and will ensure brewers and distiller [sic] will pay a levy based on the size of their building, rather than a flat fee,” he said in a media release.
Minister Dick’s announcement said the change will take place in two stages.
“Step one will see a repeal of the section of the levy that was introduced in July 2019.”
“Step two will come into effect on 1 July 2020 and will see the levy applied based on the size of the brewers’ premises,” the release said.
Emergency Services Minister Craig Crawford said the emergency management levy was administered by local councils who will have to police the changes.
“We will be working with the LGAQ to communicate the levy changes to councils and ensure all necessary adjustments to rate notices are made recognising the new building size classifications for brewers and distillers,” Mr Crawford said.
Brews News understands that after failing to consult with the industry on the levy hike, the Independent Brewers Association was consulted on the changes.
Queensland IBA spokesman David Kitchen welcomed the about-face.
“It’s a much fairer break down of costs across the breweries than originally proposed,” he said.
The fire levy changes changes were seen as a failure of the Queensland Government’s much-hyped Craft Beer Strategy, which Minister Dick launched last November. While the Minister announced significant environmental concessions for the Kirin-owned XXXX brewery in July, the Government is yet to deliver any outcomes for small brewers under the strategy, and David Kitchen said the industry is yet to be consulted on its hoped-for licencing reform.
“One of the areas that we are waiting to see implemented is the final review of licences which will make a big difference to the economic contribution that craft breweries can make to the state,” Kitchen said.
“We hope before those changes are also announced that the Government does engage with the industry so we don’t again end up with a decision that has to be changed two months later.”
All departments were heavily criticised for the emergency management levy, which was pushed through in last minute amendments to regulations by QFES and was supposed to be collected by local councils.
Many microbreweries and those in regional areas such as Monkey Pig Brewing would have faced the squeeze and even been forced to shut down if payment of the levy had been enforced.
It emerged, following enquiries by Brews News, that neither the brewing industry or the ‘Minister for Beer’ Cameron Dick of the State Innovation department had been consulted on the fire levy amendments which were pushed through in June and came into effect on 1 July 2019.
The new system intends to reflect the varying sizes of individual breweries, as well as their liquor licence category. This is to ensure that the levy burden at least attempts to reflect their individual sizes.
Determining the levy by volumetric output was rejected due to the issues relating to the limited ability of local councils to verify this independently.
The most controversial levy group, which put breweries and distilleries “under 15,000 square metres” in one group and forced all of them to pay $5,224.20 (up from $527.80), has been scrapped.
If a brewery has a commercial hotel licence, it will still be charged at the higher tavern category.