alcohol tax

Key Aussie Industries Threatened by New Tax Proposal

When was the last time you were in a bar or at the bottle shop and thought, ‘Wow, these drinks are cheap’?

Most likely, your answer is ‘never’.

Or perhaps the thought crossed your mind the last time you were overseas. Where the free market is more likely to determine the price of your pint of beer or glass of chardonnay, rather than punitive government sin taxes.

A pint of beer in most Melbourne pubs will set you back $10. More in the fancy places.

No surprise then that Deutsche Bank ranks Melbourne as the eighth most expensive city in the world to buy a beer. (Oslo, Norway tops the list.)

But that’s not nearly expensive enough for the Foundation for Alcohol Research and Education.

They’re lobbying to increase the excise tax on all alcohol by 10%. Draught beer would be particularly hard hit. According to The Age, their proposal would see the tax on tap beer increase by 50% to match the tax on packaged beer. Ouch!

Don’t worry though. It’s all for your own good.

The Foundation’s pre-budget report estimates the higher taxes will squeeze $2.9 billion in extra revenue from Aussie drinkers. And reduce alcohol consumption by 9.4%.

Michael Thorn, the Foundation’s CEO, decries alcohol for its ‘disruption to families, the impact on employers, [and] reductions in productivity’.

The thing is, the vast majority of Australians drink responsibly. And they’re already paying far too much tax for their bevvies.

What Michael and his ilk fail to grasp is that ever-higher taxes will do little to nothing to reduce consumption among the real problem drinkers. These folks will cut back on other expenses — like new clothes for the kids — long before cutting back on alcohol.

And if the booze tax gets too high, as Australia is already seeing with tobacco, you can expect illicit home brewers and black-market sales to take off.

It’s another ill-informed, big stick approach to a matter that requires finesse. And the issue of problem drinkers is one the Foundation for Alcohol Research and Education needs to accept won’t ever be solved entirely.

In the meantime, if you’re looking for a bargain pint of beer, you might want to consider Prague. At AU$1.66 a glass, Deutsche Bank ranks the city as the world’s cheapest for a cold one.

Bernd Struben

Bernd Struben

Bernd Struben is the lead editor at The Australian Tribune. Bernd makes use of his extensive network to bring you the top stories you need to know about each day. Stories the mainstream may miss. Or bury somewhere you’re unlikely to ever read them. Bernd studied aerospace engineering and journalism at the University of Michigan, before graduating with a degree in economics. Over the past two decades he’s worked in media, management, and finance in the US, the Caribbean, Europe, and Australia. His other role, as the editor of the Port Phillip Insider, puts him in a unique position to read Australia’s most exclusive financial advice. Some of which he shares with readers of The Australian Tribune for free.
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