The Federal Budget has announced it will deliver tax breaks to small brewers and distillers, in an effort to encourage more investment in the sector.
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Treasurer Josh Frydenberg announced that the $225 million dollars in tax relief would allow brewers and distillers to keep more of what they earn and support around 15,000 Australians that are currently employed in the sector.
It may even lead to savings at the bar, according to Mr Frydenberg who said the price of a beer keg could be "shaved by a couple of bucks".
The changes have tripled the amount of liquor that producers can sell before excise tax applies.
Currently, they are entitled to a 60 per cent refund on the excise tax they pay, up to $100,000 dollars annually.
Following the changes, they can claim a full refund on the excise they pay, up to an annual cap of $350,000 dollars.
The changes have tripled the amount of liquor that producers can sell before excise tax applies.
Currently, they are entitled to a 60 per cent refund on the excise tax they pay, up to $100,000 dollars annually.
Following the changes, they can claim a full refund on the excise they pay, up to an annual cap of $350,000 dollars.
There are around 600 brewers and 400 distillers across Australia, with around two thirds operating in rural and regional areas.
The distillery industry is fast-growing, but they have been held back by a tax rate which is the third-highest in the world.
Baker Williams distiller Nathan Williams was happy to see some action from the Federal Government.
"For many years the Federal Government got a much bigger cut out of our business than we did," Mr Williams said.
"I was genuinely surprised and very thankful that the Federal Government had gone down this path because it'll make life a little easier for us. We can use the rebate to invest in people and equipment to make a better product and the work won't be so physically damaging to us, it's a very welcome relief."
There's a push from the industry to use the money to make our businesses more viable and employ more people rather than just make beer cheaper.
- Gary Leonard
Distillers like Nathan Williams feel that excise tax has significantly hampered their industry's growth in comparison to wine.
"Excise tax has been by far the biggest cost that we bear in the business, and it's not just a financial challenge, but also a compliance challenge. There's an enormous amount of time put into the compliance side of things, which won't go away. But this announcement is certainly a step in the right direction," Mr Williams said.
Mudgee Brewing Company owner Gary Leonard was grateful the brewing industry had advocated for the changes, but didn't think it would lead to a reduction in the cost of a schooner.
"There's a push from the industry to use the money to make our businesses more viable and employ more people rather than just make beer cheaper, that won't help with the struggles small breweries face everyday," he said.
Treasurer Josh Frydenberg said the changes would align the benefit available under the excise refund scheme for brewers and distillers with the Wine Equalisation Tax (WET) Producer Rebate.
Brewers Association CEO John Preston welcomed the Federal Government's decision to increase the cap.
"COVID-19 has hit our sector hard with 44 million schooners destroyed last year due to lockdowns, $1 billion dollars lost in beer sales in pubs and clubs and many venues still operating under restrictions," he said.
"Australia's beer tax is the fourth highest in the developed world so as our world-class beer and hospitality industries rebuild we would also welcome the Government cutting the tax rate on draught beer to support hospitality and brewing jobs right across the country."