Craft breweries benefit from federal budget
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Brewhouse Margaret River's Iliya Hastings, Ben Joseph and Andrew Dykstra. Photo: Nicky Lefebvre
Forrest MP Nola Marino with The Grove Distillery team. Image supplied.
South West craft brewers and distillers will see a small benefit from tax changes announced in the federal budget.
Current tax arrangements mean smaller brewers pay a high tax due to their use of smaller kegs.
The new policy, which will come in on July 1, 2019, will increase the amount beverage companies can claim back on their excise and extend the concessional draught beer excise rate to smaller kegs.
The alcohol excise refund scheme cap will increase from $30,000 a year to $100,000.
Brewhouse Margaret River co-owner and manager Iliya Hastings said any tax break was a positive for the industry.
“Given the amount of tax we do pay across board, businesses like ours are effectively paying five kinds of tax including the excise, a little help is always welcome,” he said.
However, Mr Hastings said it wouldnt make a huge difference to the tax bill.
“In terms of the bottom line, its a very small difference,” he said.
“I dont think having an excise tax really achieves much, it is just a tax on something that is a normal part of how we consume as society, so why choose to put a tax on craft beer compared to another product? It has always been something Ive been miffed by.
“Applying the same excise rate to 30 litre to 50 litre kegs makes sense, why pay more because you use a smaller keg? It eradicates one of the inconsistencies in the tax regime.”
Forrest MP Nola Marino said the policy would allow craft breweries and distilleries to compete on fairer terms with larger beverage companies.
“This will help over 15 local businesses to grow and employee more people,” she said.
Mr Hastings said he hoped to see further changes to benefit the industry.
“Given it is such a booming industry, with craft breweries popping up every few weeks in Australia even when it is under a fairly hideous tax regime, any help will always be welcome. This is a help. It is not a silver bullet. They make us work hard for every cent we earn,” he said.
“Our industry lobby pretty hard for us and will keep that up to continue to grow the industry, so we can employ more people and continue to do great things.”
WA Brewers Association president Dan Turley said the decision meant local breweries could continue to support and contribute to the community and they could continue to invest in and expand their businesses.
However, the association believed the decision to level the taxation on all kegs over eight litres would put added pressure on the local brewing industry.
“The reduced keg excise must be met with some caution, however, in that it may also potentially open the floodgates for cheaply produced imported beer packaged in smaller kegs, especially one-way disposable plastic kegs,” he said.
“We would urge all customers – wholesale and consumers of WA craft breweries, to continue to support locally made beer to ensure that this extremely important industry continues to flourish.”
The Australian Taxpayers Alliance commended the policy.
Australian Taxpayers Alliance director of policy Satya Marar said it was a common-sense reform and small, innovative Australian businesses would no longer be disadvantaged against their larger, multinational competitors.
“For years, the Australian Taxpayers Alliance has argued against Australias unfair, absurd and complicated alcohol tax regime,” he said.
“Australia is home to some of the worlds best, internationally-recognised beers, wines and spirits.
“Our craft breweries do it tough enough with exorbitant taxes on alcohol and some of the highest electricity prices in the developed world. The fair tax policy for craft beers supports our small businesses and entrepreneurs as well as thousands of quality jobs across regional and urban Australia.”
This story Craft breweries benefit from federal budget first appeared on Busselton-Dunsborough Mail.
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