CRAFT BREWERS CALL FOR A FAIR GO ON EXCISE

Guest column by Chris McNamara, executive director CBIA

The Craft Beer Industry Association, the representative body for Australia’s craft breweries, is calling on all candidates in the upcoming Federal election to commit to giving craft beer producers the same excise relief enjoyed by other sections of the drinks industry.

With more that 370 businesses in Australia, up from just 30 in 2006, the craft brewing industry is a shining light in Australia’s manufacturing sector. The industry in turn supports growth upstream in the agriculture and other manufacturing industries and downstream in hospitality and tourism.

This growth has been achieved with minimal assistance from Federal governments.

The 2016 Federal Budget delivered the news of a proposed amendment to the Wine Equalisation Tax (WET) rebate rebate aimed at ‘returning the rebate to its original policy intent of supporting small wine producers in rural and regional Australia’. This is to be achieved via a proposed reduction, over a two-year period, from the current level of $500,000 to its 2004 level of $290,000.

The effect is that even after the rebate reduction, wineries effectively pay zero excise on their first $1 million of sales every year.

Small beer producers are not extended similar excise-relieving treatment.

The 2016 budget proposed no changes to the application of the brewer rebate to small Australian brewers. The brewer rebate is currently capped at $30,000 – which is the excise applicable on approximately $120,000 of sales only.

The total increased cost of lifting the rebate cap to match that of wineries would be in the order of $15 million. This would benefit more than 150 of Australia’s craft breweries who would be able to reinvest these funds back into their business through equipment purchases, innovation and market development with the resultant creation of jobs.

The budget papers highlighted that the proposed change to the WET rebate will save $300 million over four years. It is about time that a small fraction of those savings were used to afford small brewers the same opportunity for excise relief – and the consequent ability to invest in growth and in their regional areas – as our winery counterparts.

Craft breweries now occupy locations in every corner of Australia. To support their ongoing development, we ask all Federal election candidates to propose and support this change to the excise rebate for brewers before the budget is passed when the new Parliament sits.

This column first appeared on TheShout.