The rising cost of spirits is creating quite a stir among consumers, as Australia has just implemented an increase in its spirits tax. Starting this Monday, the price for spirits has surged to an astonishing $107.99 per litre, a change triggered by the biannual inflation adjustment.
This marks the 78th time since 1983 that Australian spirits excise taxes have been adjusted according to inflation, which certainly raises eyebrows among regular drinkers. However, it’s worth noting that while spirit enthusiasts are bracing for higher prices due to this new tax, those who enjoy draught beer have received a bit of a break, thanks to a two-year freeze on beer excise.
Critics from the spirits industry are voicing their concerns, arguing that the government’s taxation policies unfairly favor certain types of alcohol over others. Steven Fanner, the executive director of Spirits & Cocktails Australia, pointed out, "Spirits face a steeper tax burden compared to beer or wine, and these tax increases occur every six months." He highlighted that spirits have become an increasingly popular choice for a diverse range of consumers, particularly appealing to women and younger adults, making this tax hike even more contentious.
To put this into perspective, the new tax means that roughly $32 of the price for a standard 700ml bottle of gin or whisky will be earmarked for government revenue, which is no small change. As Parliament prepares to revisit the discussion surrounding the draught beer tax freeze this week, advocates from the spirits sector are urging lawmakers to consider extending similar relief to spirits served on tap in pubs and clubs.
In addition, Mick Gibb, the CEO of the Night Time Industries Association, expressed his concerns about how the high tax rates on spirits pose ongoing challenges for both consumers and venue owners. He stated, "We’ve witnessed some meaningful advancements in promoting vibrant 24-hour cities; however, for many patrons, the escalating costs of mixed drinks or cocktails have turned nights out into a luxury. For bar owners, especially those managing smaller establishments, these semi-annual tax hikes become increasingly burdensome and difficult to plan around."
But here’s where it gets controversial: should the government reconsider its approach to taxing different types of alcohol? Is it fair that spirits drinkers shoulder a heavier tax load compared to their beer-drinking counterparts? We’d love to hear your thoughts—do you agree with the current taxation system, or do you believe changes are necessary?
