Budget: Tap beer drinkers are grinners but tinnie makers left in the cold
The Federal Government will pause indexation on draught keg beer excise taxes for two years if Labor wins the next election, leaving South Australian brewers of canned beer in the lurch.
For some time now, South Australian brewers and beer drinkers have been calling for relief from ever-increasing excise taxes imposed on the amber stuff.
Now, as part of Federal Labor’s 2025/26 Budget aimed at winnings the hearts of voters, the government is hoping a pitch that’ll slow the ever-growing cost of beer will win over the bellies of voters too.
Federal Treasurer Jim Chalmers last night announced the government would pause indexation on draught beer excise for a two-year period.
Previously, excise rates were indexed biannually based on the upward movement of the consumer price index. This made it more expensive for brewers to manufacture beer, and led to higher prices for end consumers too.
If Labor is re-elected and the Budget measure is passed, from 1 August 2025 indexation due to occur in August 2025, February 2026, August 2026 and February 2027 will not occur.
This means lovers of beer from a tap at a pub will finally get some hip-pocket relief when it comes to an after-work pint.
The Australian Hotels Association CEO Stephen Ferguson labelled it a “win for the millions of men and women who like to go down to their local and have a beer”.
“It’s a win for common-sense in the middle of a cost-of-living crisis – every little bit make a difference,” said Ferguson, whose association represents the hotels and pubs that will benefit from the pause on keg beer excise indexation.
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“It’s great to see the Albanese Government has listened and acted on this unpopular hidden tax.”
But the move is penance for small to medium-sized South Australian brewers who focus on canned beer rather than kegs. Often, independent brewers are unable to secure coveted spots on the bars of pubs because multi-national brewers have the cash and muscle to squeeze the smaller players off the bench.
Big Shed Brewing co-founder Craig Basford said Chalmers’ announcement on excise taxes is “the very bare minimum” to “make it look like the government actually gives a shit about this industry”.
“There is never any talk about the price of canned/bottled beer. This is despite the fact that it too goes up at the same rate, but also starts at a higher rate,” Basford told InDaily..
“People do not understand that there are two rates of excise regardless of them being the same product. The government has chosen to freeze, not lower one which will only lead to greater disparity.”
He said tap beer is the hardest to make inroads on for independent brewers.
“This is because tap contracts lock independent brewers out and ensure that the vast majority of tap beer comes from two Japanese multi-national brewers in Lion and Asahi,” he said.
“The result of this is that the tax freeze (don’t forget that this doesn’t reduce the tax burden, just does not increase it) does little to help the independent beer sector. This is a sector that supplies only a small fraction of beer consumed but delivers 50 per cent of the jobs, local jobs.”
Big Shed Brewing co-founders Jason Harris and Craig Basford. Photo: John Krüger
Mount Barker-based Prancing Pony co-founder and CEO Corrina Steeb agreed, and told InDaily the announcement “completely missed the mark”.
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“It doesn’t actually assist small breweries at all, it only really helps the large multinationals,” she said.
Steeb said 90 per cent of her brewery’s output was canned beer, so the change “is obviously not going to help us much at all”.
“The second point is, the excise on canned beer is much higher than the excise on draught beer already.
“Excise is the single-highest cost ingredients in beer for us in a can.”
Ultimately, Steeb said the change would make it “harder for small businesses who haven’t got the economy of scale”.
“It just hampers the growth of businesses and that’s really sad,” she said.
“I don’t think there’s anything in the budget that really benefits small business, and it just shows again that we have been completely overlooked.”
Prancing Pony co-founder Corinna Steeb. Photo: David Simmons/InDaily.
It’s a position reflected by the Council of Small Business Organisations Australia (COSBOA) CEO Luke Achterstraat, who labelled the Federal Budget a “missed opportunity” and that small businesses were largely overlooked “during the most challenging environment in living memory”.
“Unfortunately, the budget largely recycles existing policies and fails to substantially deliver for the 2.5 million small businesses in Australia and the 5 million people they employ,” he said.
Similarly, South Australian Business Chamber CEO Andrew Kay said the budget “fails to address the challenges being faced by businesses”.
Kay expressed disappointment and said the absence of new initiatives would have his members wondering what was held back.
“It is surprising that an extension of the instant asset write-off for small businesses has not been included,” Kay said.
“It should be made a permanent feature of the tax system to help underpin investment and productivity in the small business sector.
“While sweeteners such as personal tax cuts are in there to entice voters, it feels like the government has kept their powder dry if they intend to woo business between now and election day.”
