" Sin " Taxes !

It was once the traditional end to the working day for men to drop by the pub and have a beer on their way home.  Those were the days when we faced " budget night " with fear.  Too often the bad news was a price increase in beer and cigarettes.

Over the years there has been a dramatic change in our drinking habits.  That visit to the pub has been replaced with taking a beer from the fridge when we arrive home and this is because of aggressive policing of the drink driving laws.  Both the advent of roadside breath testing and the immediate license loss for those exceeding .05 brought this change in drinking habits.

What is surprising is that the cost of having a beer in Australia compares very unfavourably with its price is many overseas countries and the reason is the tax levied by the government.   When we buy a carton of full strength beer this amounts to forty-two percent of the price we pay and that includes the GST.   Beer tax contributes $3.8 billion to the Federal budget's bottom line.

It is about to get worse.  The price of beer is subject to indexation and next week the twice yearly indexation will kick in and increase the price of draught beer by twenty one cents a litre.  The price of packaged beer will increase by thirty cents a litre and that will affect cans, stubbies and the long necks we traditionally keep in the fridge..

Surpisingly, the beer tax in Australia is much higher than the rate levied in most other developed nations.  The rate of $ 2.15 a litre for packaged beer compares with just 70 cents a litre elsewhere and we pay eighteen times more beer tax than Germany, eight times more than the US and  37.5 % more than the Brits.

Over the years both the consumption of beer and cigarettes were regarded by the Treasury as luxury items we chose to indulge and they were seen as subject to a " sin " tax.  By this measure, it was argued that the tax could be avoided by the taxpayer simply reducing  the amount consumed. It seems that these sin taxes have risen to draconian levels,.

The majority of both draught and packaged beer in Australia is now foreign owned.   The government is looking to ease beer taxation by lowering the rate charged to Australian owned craft brewers who battle to gain representation in pubs and clubs.   This industry segment has doubts that a tax decrease would result in cheaper prices at the bar.     Most owners think the saving would be invested in expanding their volume output and hence little would change in beer pricing.

It seems to be an inescapable fact that we are paying too high a price for our beer  !