The Independent Brewers Association has welcomed changes to the payment schedule for small brewers, to be announced in tonight’s Federal Budget.
The Treasurer pre-announced the changes in a media release last week outlining budget measures designed to support small business.
Amongst measures designed to align excise and other reporting requirements, the Government announced businesses with an annual turnover of less than $50 million will now be able to lodge and pay excise and excise-equivalent customs duty on a quarterly basis, from 1 July 2023.
The IBA has described the change to payment schedules as an important one for brewers and follows the industry association’s response to the Federal Government’s Deregulation Taskforce in August last year.
The association called for this change as well as a deferred settlement for brewers that don’t currently pay excise as a result of being under the $350,000 cap to permit them to provide an annual return.
In a statement yesterday the IBA said that it hopes “that this will be the first of other announcements around improving the excise administration process.”
Tonight’s budget is also expected to announce a temporary reduction in the excise on keg beer following substantial lobbying by the Brewers Association, representing Lion, Coopers and CUB, and the Australian Hotels Association.
The proposed move is mooted to reduce the cost of a schooner by 30¢ with the Brewers Association arguing the cost to the Government would be $153 million in 2022-23.
With the proposed move limited to draught beer it is expected to benefit hotels, that have not committed to passing on the price reduction, and brewery-owned taprooms.
However, the move has also been criticised as being ineffective and ‘gender biased’, with The Australia Institute reportedly arguing the money would be better spent on targeted assistance for small restaurants and bars, support for live music, or food and drink discounts for all customers.
The IBA said that while it is “still seeing some controversy around the proposed 50% cut to tax on draught, we feel that this will be of benefit to our members that supply kegged product”.
“Given the cut is on beer targeted at on-premise, we can only hope that the flow-on benefit promised for the hospo industry and consumers is realised,” the IBA’s statement said.
The moves follow the increase in the excise rebate to $350,000 in last year’s budget.
Update 30/03/2022: Despite suggestions that there would be a reduction in excise on keg beer, this did not come to pass.
The Australian Hotels Association, Clubs Australia and the Brewers Association had lobbied for the change, suggesting that the levy on beer kegs be cut $70 to $35.
However, the Budget did introduce measures allowing venues offering growlers to benefit from a tax exemption on up to 10,000 litres a year.
The IBA’s Kylie Lethbridge explained that the IBA had not been a part of the lobby for cuts to tax for draught beer, but highlighted the other wins for independent beer.
“The IBA has been reticent to endorse the cut to draught tax as it may not have had a positive impact for our members, however we absolutely welcome the relief on growlers and the changes to the excise framework.
“We have been very lucky in that the last two federal budgets have provided direct support to the independent beer sector which, in our mind is an acknowledgment of the important contribution we make to the national economy. The government is continuing the ‘back a winner’ so we are very thankful for their continued support.”
While the bigger end of the industry may be disappointed at the move, there are some organisations that have welcomed it.
The Foundation of Alcohol Research and Education said that “strong community advocacy has resulted in common sense prevailing, with the health of our families and community prioritised over tax cuts for alcohol companies”.
According to FARE, the tax cuts were a “gimmick” and “expensive and ineffective” as well as strongly opposed by more than 80 health and community leaders and organisations.
It accused the industry of “attempting to use the cover of the pandemic to get a handout on top of their billion-dollar profits”.
“FARE strongly opposes any moves to reduce taxes for alcohol companies and will continue to advocate for decision-makers to put the health and wellbeing of Australians first,” it said.