A big relief for Australians when buying a beer at the pub: what you need to know

Australians could soon see some relief from rising everyday costs after the opposition called for a freeze on alcohol excise duty.

Nationalist leader David Littleproud said the Coalition would seek to “take some of the pressure off” pub landlords and their customers if they win the next election.

Beer and spirits makers have spoken out against the tax (indexed to inflation every six months), which forces them to pass on the extra cost to Australian drinkers.

The last time it was increased was by two percent in August, resulting in a 43.22 percent tax on cask alcohol for popular beers such as VB or Carlton Dry.

Littleproud said the tax was simply another source of stress for Australians during a cost of living crisis and he would look to keep it stabilised for its next indexation in February.

“When they don’t have disposable income and then they’re still being taxed, it makes it even harder for them to go out, not just for a beer but for a meal,” he told Weekend Today.

However, Labour’s Health and Aged Care Minister Mark Butler indicated the government would prioritise other cost-cutting measures.

“This is not the goal of our government. Cheaper medicines, not beer,” he said.

Spirits & Cocktails Australia chief executive Greg Holland said the tax increase could not be justified during a cost of living crisis.

“Enjoying a drink with friends is one of life’s few simple pleasures for Australians currently struggling with the cost of living,” he said just before the increase in August.

‘Unfortunately, this custom is increasingly out of reach for many people, thanks to the incessant increases in alcohol taxes every six months.’

While beer drinkers suffer a lower tax burden due to the lower percentage of alcohol, the increases still hit brewers’ pockets hard.

“Almost 50 per cent of the price of a slab is federal tax, so it’s as significant for beer as it is for spirits,” said Australian Brewers Association chief executive John Preston.

Mr Preston said excise duties were contributing to the closure of pubs and clubs, with hospitality venues accounting for 15 per cent of Australian business insolvencies.

“This is another blow they don’t need,” he said.

‘Increasingly, pubs and hospitality businesses are struggling to stay afloat, with pub owners saying the rise in beer duty is making it unaffordable for people to go out for a pint.’

Alistair Flower, owner of the Flower Hotels group, said Australians were choosing not to go out because they simply couldn’t afford to drink in a pub.

‘Prices for sailboats can range from $7 to $10, and when you go to Sydney they can cost between $9 and $15,’ he said.

“It’s quite unsustainable, we have a lot of people who enjoy coming to the pub to connect and connect, especially retirees.”

While brewers, pubs and consumers hope inflation rates will fall before February, mortgage holders have their fingers crossed for an interest rate cut on Tuesday.

But RBA Governor Michele Bullock cautioned that the bank’s board “does not predict that we will be in a position to cut rates in the near term.”

However, they could see some relief in living costs in the coming months after the Australian Securities Exchange’s RBA Target Rate Tracker on Tuesday predicted four interest rate cuts by mid- to late-2025.

The tracker predicts a 25 basis point interest rate cut in February, followed by three additional cuts in August.

If this holds, the official cash rate would fall from 4.35 percent to 3.35 percent and provide relief from the most aggressive increases since the late 1980s.