The claim
As interest rates rise and living costs bite, the Coalition has accused the government of breaking a key election pledge by quietly introducing a new tax — on beer.
In a January 28 Facebook post, Shadow Minister for Community Safety, Migrant Services and Multicultural Affairs Jason Wood said Prime Minister Anthony Albanese "thinks you won't notice some new taxes. Even though he promised no new taxes."
"Beer drinkers are the newest victims of Labor's sneaky taxes," he wrote.
"The 3.7 per cent tax increase, which affects draught as well as packaged beer, comes on top of a 4 per cent increase in August."
This, Mr Wood said, was "just another broken promise".
So, did Labor introduce a new beer tax? RMIT ABC Fact Check investigates.
The verdict
Mr Wood's claim is misleading.
Although the federal tax on beer has increased, this was the result of regular, automatic indexation that occurs in line with inflation.
In other words, when the cost of living increases, so do beer taxes.
Alcohol taxes have existed in Australia since colonial times, and the current indexation arrangements for beer taxes have been in place for nearly 40 years.
The relevant legislation has not been changed since Labor was elected in May 2022.
How the beer tax works
Commercially produced alcohol in Australia is subject to excise duties.
As the Australian Taxation Office explains, these are taxes levied on certain commodities such as alcohol, tobacco and petroleum products.
When it comes to beer, rates vary depending on several factors, including a beer's strength and whether it is sold in kegs or bottles.
Notably, the tax applies to the volume of a drink's alcoholic content (ABV) above 1.15 per cent, as opposed to the drink's total volume.
An Aussie tradition
Alcohol taxes have existed in Australia since colonial times.
In their brief history of Australia's tax system, Treasury officials note that alcohol was subject to additional import charges in the late 18th century, and add: "Excise duties levied on locally produced goods, equivalent to the customs duties on imports, were also introduced early in the 19th century."
In the case of alcohol and tobacco, such charges "were intended not only to raise revenue, but were also introduced as 'sin taxes', for example in response to concern over the level of alcohol consumption in the colonies".
Specific laws for beer duties were passed in Tasmania and Victoria in 1880 and in other colonies prior to federation. Standardised national excises replaced these in 1901.
Current rates are set according to the Excise Tariff Act 1921, which has been updated over the years.
So, what's happening to beer prices?
In January 2023, the ATO announced that from February 1 the excise duty rates on commercially produced alcohol would increase by 3.7 per cent.
The historical data shows that rates also increased in August 2022 by 4 per cent.
Beer prices are subject to a range of factors other than tax, and excise rates vary depending on the type of beer.
By way of example, the February changes mean that the tax component of a (570 mL) pint with 5 per cent alcohol content will rise by a little over three cents.
Is it really the PM's fault?
Mr Wood, who is a former assistant minister for customs, blamed the tax increases on the Albanese Labor government.
However, the CEO of the Brewers Association industry group, John Preston, published a statement following the August 2022 rise that said such increases were "a problem that the new Treasurer has inherited from his predecessors".
And as the ATO explains on its website, the alcohol excise typically increases automatically every February and August — regardless of which party is in power.
These increases are simply a reflection of inflation, or the rising cost of living.
"The law indexes the excise duty rates for alcohol twice a year, based on the upward movement of the consumer price index (CPI)," the ATO said.
"The Australian Bureau of Statistics ... is responsible for determining and publishing the CPI which provides the basis for indexation."
Under section 6A of the Excise Tariff Act, excise rates do not change — in either direction — when inflation is negative.
These rules were added in 1983 by the Hawke government.
Since then, the rates have been changed on a handful of occasions outside of regular indexation, for example, after the introduction of the GST.
Has anything changed?
The most recent amendment to the Act occurred before the current government was elected, when the Coalition temporarily reduced the excise on fuel in March 2022.
And the most recent change to beer excise rates outside of indexation occurred in 2018.
After lobbying from Mr Albanese in 2017, the Turnbull government lowered the excise paid by craft breweries, which until then had been subject to higher rates than companies that used larger kegs.
Principal researcher: David Campbell
Sources
- Jason Wood, Facebook post, January 28, 2023
- ATO, Calculating the excise duty payable on excisable alcohol, September 15, 2020
- Treasury, A brief history of Australia's tax system, September 4, 2006
The Excise Tariff Act 1921 (Cwth)
- Beer Duty Act 1880 (Tas)
- The Beer Duty Act 1880 (Vic)
- ATO, Excise duty rates for alcohol, January 27, 2023
- Brewers Association, Media release, August 1, 2022
- ATO, Excise data (historical), January 29, 2023
- Excise Tariff Amendment Act (No. 2) 1983 No. 99 of 1983 (section 3)
- Parliamentary Library, Bills digest for Excise Tariff Amendment Bill (No. 1) 2001
- Josh Frydenberg, Budget speech 2022-23
- Scott Morrison, Media release, May 4, 2018
- Anthony Albanese, Parliamentary transcript, December 4, 2017