From the General Manager

IT’S SIMPLY A TAX ON JOBS

IAN HORNE

WATCH VIDEO: https://youtu.be/Vhozfb5MSrs

The AHA has made a submission to the Federal Government for inclusion in the Federal budget recommending a freeze on the excise rate for all liquor at its current rate for 12 months.

The rationale is simple:

• The increase in beer tax announced to take effect on 1 February 2023 meant that the tax has gone up by around 8 per cent in the past six months (that’s August 2022 and February 2023).

• Hotels are having to pass on almost 90 cents of tax on every pint of schooner of beer they pour.

• We estimate that these two increases alone will cost a small pub around $5,400 a year and come after several years of difficult trading conditions associated with COVID-19 restrictions.

As pubs are still trying to rebuild and pay back debt after COVID-19, and consumers are faced with rising living costs, a freeze would assist consumers and the Australian hospitality industry with the following benefits:

• Not force hotels to pass a tax increase onto consumers, thus increasing the cost of living

• Not create a further price disincentive for people to visit their local hotel, thus decreasing business sustainability and confidence

KEY BENEFITS FOR BEER DRINKERS

Due to increasing costs faced by pubs and clubs, draught beer is already expensive relative to packaged beer. On average beer drinkers in pubs pay up to 3.5 times the price of the equivalent packaged beer bought from bottle shops (for the equivalent drink size) in metropolitan areas and 2.9 times across Australia’s regions — comparing the cost of draught beer with a carton (for the equivalent drink size).

This cost pressure on pubs and beer drinkers is getting worse with lingering COVID-19 issues and continual tax rises driven by twice yearly CPI adjustments. A further tax increase due on 1 August 2023 and another February 2024 tax on draught beer is likely to increase by another 7 per cent and hospitality wages by over 6 per cent in the next 12 months.

KEY BENEFITS FOR HOSPITALITY BUSINESSES AND JOBS

Draught beer (consumed onpremise) is crucial to pubs and hospitality generally. Excise indexation twice yearly and higher wages reduce the competitiveness of on-premise consumption compared to home consumption of packaged beer.

We estimate that across employing businesses, an excise freeze could contribute to 18,500 new full time equivalent (FTE) positions or alternatively over 37 000 part-time and casual jobs across Australia.

To ignore this harsh reality is to see a continued swing to package liquor consumed away from licenced premises where the majority of pub and hospitality jobs are. It’s that simple.

Continuing the twice annual excise tax increases is simply a tax of jobs. There can be no other way of looking at it.