Increasing excise rebates for brewers would boost Federal Government tax revenues, says the report

The Independent Brewers Association (IBA) has today released a report that shows that a more equitable excise regime would bring more jobs and investment to the Australian independent brewing industry, with the reforms themselves being revenue positive for the Federal Government.

The Australian brewing industry is currently one of the highest taxed in the OECD, representing over a third of the cost of production. This means that the Government earns more from beer production than the farmers who grow the barley and hops. Unlike the wine industry, it receives very little direct Federal Government support. Where wine makers can currently claim up to $500,000 per annum in wine equalisation tax rebate small, independent brewers can only claim a maximum of $30,000 each year.

The report, prepared by respected Melbourne consultancy Essential Economics, models three different scenarios of increased excise relief. In each of them it is shown that an increase in the excise rebate creates jobs, encourages investment and ultimately delivers the Federal Government a return on their investment through increased tax receipts.

“As individual businesses we have always known that excise relief would allow us to reinvest and create more jobs. This report shows that growth in the independent brewing sector is good for Australian industry and has a positive return on investment for the Government,” said IBA Chair Ben Kooyman.

“We have presented this report along with a range of recommendations to the Federal Government. We are asking them to deliver some concrete assistance measures for a small but growing manufacturing industry that is facing a high tax burden and some seriously archaic and out of date regulations that are holding back job creation and investment.”

The independent brewing sector directly employing more than 2400 Australians and contributes more than $740 million in economic output each year. In fact, the sector employs 40 people for every million litres of beer brewed whereas the big multinational brewers employ only 0.5 people to brew the same amount.

END

Key facts about the Australian independent brewing industry:

• It had 380 participants as at 30 June 2016. It is now more than 440.
• 65% of those businesses are based outside of the capital cities.
• The industry produced 59 million litres of beer in 15/16 generating $280 million in revenue.
• It employs more than 2400 full time equivalent workers. That is 65% of all employment in the brewing industry in Australia. And those workers are paid approximately $90 million in wages.
• It supports a further 17,210 in the wider economy.
• It generated $740 million in economic output in 15/16

Click here to download the Essential Economics report. TheIBA’s submission on Alcohol Excise Reform is available here.

Read more:
Indy brewers set lofty target