Pat Conaghan (Cowper, National Party, Shadow Assistant Treasurer) Share this | Hansard source

I rise to speak on the Excise Tariff Amendment (Draught Beer) Bill 2025 and a related bill, the Customs Tariff Amendment (Draught Beer) Bill 2025. The coalition will support these bills, because freezing a tax on beer is common sense, and we won't stand in the government's way. But there is much more that needs to be done.

Let me start with a bit of background to these bills. Australians face automatic tax increases on alcohol twice a year: on 1 February and on 1 August. That means that every six months excise goes up automatically, regardless of business conditions. It happens whether inflation is high or low, whether the economy is struggling or strong, and whether pubs and clubs can afford it or not. It's a system that runs on autopilot, and right now that autopilot is flying straight into an inflation storm. Just last week we saw inflation break through the Reserve Bank's target band again. That's bad news for mortgage holders, bad new for families and bad news for small businesses, who already face higher costs at every single turn. And drinkers get hit by inflation twice: once through rising prices and again through higher excise.

This bill gives small relief from the excise but does nothing to tackle the rising prices. So any pause, any breathing space for pubs, clubs and everyday Australians, is worth supporting. But we should also be clear about what this measure actually delivers. This freeze saves less than 1c per pint. It does nothing about the high inflation we continue to see under Labor. High inflation means that the prices of your groceries, your power bills and your mortgage continue to go up. Under this government, we've already seen food prices go up by 15 per cent, housing by 19 per cent, insurance by 30 per cent, gas by 38 per cent and electricity by a whopping 39 per cent.

Households need genuine action on the cost of living, not 1c on a beer. This change is nothing more than crumbs from the Treasurer's table. Yet, for many mid-north-coast hospitality venues, like the Willawarrin Hotel, the Hoey Moey, King Tide Brewing, the Pier Hotel, and Dave Richards at the Great Northern Hotel Kempsey, even crumbs can make a little bit of difference. These businesses have carried more than their fair share of pain. They've survived lockdowns. They've battled chronic staff shortages. They have absorbed spiralling costs of power, produce, insurance and freight. And they've seen their patrons tighten belts while their own margins disappear. Yet they're still standing, because they're stubborn, hardworking and deeply connected to their communities. They deserve a fair go. Unfortunately for many of these venues, this relief has come too late.

I have a lot of pubs in my electorate of Cowper. I know the publicans, I know their staff and I know what the places mean to them. They sponsor the junior footy clubs. They host the charity raffles. They're there for weddings, birthdays and wakes. They're where people meet to celebrate and to mourn. In many country towns the local pub is not just a business; it is the beating heart of the community and it's where you find connection and a bit of laughter when times are tough.

Australia's alcohol industry contributes enormously to our economy. It supports around 176,000 full-time-equivalent jobs. That includes 22,500 in manufacturing, 21,000 in retail and more than 126,000 in hospitality. It's one of the largest employers in regional Australia, and it keeps countless small towns alive. In total, alcohol excise generates around $8 billion a year in tax revenue, with the GST adding even more on top. So changes to excise affect far more than just the cost of a beer; they affect jobs, wages and community life.

While the coalition supports this freeze, we will not pretend it's real cost-of-living relief. To give taxpayers less than 1c off a pint, when we've seen mortgage holders pay $1,800 more a month since Labor came to power, quite simply is an insult.

We also won't pretend that this fixes the deeper problems in Australia's alcohol tax system. This two-year freeze is estimated to cost around $90 million over the forward estimates, less than two per cent of the $8 billion the Commonwealth collects from alcohol excise each year. This measure applies only to on-premises draught beer—nothing else. It doesn't apply to packaged beer, bottled spirits, wine or ready-to-go drink mixes. That means that most alcohol sold in Australia is completely untouched by this bill.

On-tap spirits and cocktails are far more likely than beer to be enjoyed by women and young people, but the government didn't even think to include these in the indexation freeze. That means that young women that prefer on-tap spirits and cocktails will continue to face higher taxes, while beer drinkers get some relief. That makes absolutely no sense.

There is nothing in this measure to address the $600 million alcohol tax gap identified by the tax office—money lost each year through illicit alcohol sales. That's revenue that should be going to hospitals, schools and roads, not into the pockets of criminal operators. It is exactly what we have seen in the illicit tobacco market, which the government has turned a blind eye to for so long. Right now more people are smoking again—we know that, with the wastewater data showing nicotine use rising. Revenue has collapsed. Tobacco excise went from $16.3 billion in 2019-20 to just $7.4 billion in 2025-26, a drop of more than half. Organised crime is the winner here. We see firebombs every other week. We see insurers refusing to cover businesses simply because they are beside a pop-up tobacco shop. It is one of the most serious policy failures in living memory, and we cannot afford to repeat that mistake with alcohol.

If we let the illicit alcohol trade expand unchecked, we could lose billions more in tax revenue, drive honest operators out of business and put public health and safety at risk. And let's face it: those criminal organisations have the infrastructure there, right now, through the illicit tobacco market. They don't need to set anything up. They just need the alcohol. Only yesterday I spoke with reputable operators who are seeing it starting to flow into our communities. We need to address this right now.

Australia's excise regime is showing its age. It's more than a century old. It has become a tangle of inconsistent rates and outdated definitions. It has been patched, amended and redefined, countless times, but never properly modernised. If we are serious about supporting local manufacturing and hospitality, we need to think beyond the next two years. We need a proper review of how alcohol excise works, what it's trying to achieve and how it can be fairer, simpler and more sustainable.

Leading up to the last election, the Nationals developed policy in relation to alcohol excise, and that policy was across the board. It looked at beer, it looked at spirits and it looked at brewers—small business, big business, on tap or bottled—because the reality is, right now, if you go out and buy a bottle of spirits, whether that's scotch or gin, the excise is over 60 per cent of the purchase of that bottle. Over two-thirds—that is what we are paying. It's over 25 per cent every time you buy a beer, whether that's a draught beer, whether it's in a bottle or whether it's on tap.

We developed that policy, which I was very proud of, and I put it out on social media. Somebody, a member of the public, said, 'What, you're going to save Australia one beer at a time?' My answer was yes—yes, we are—because, every time that business sells a beer that is cheaper, it puts more cashflow into that business, and that cashflow is where they reinvest into that business. What it means is they can keep that 18-year-old part-time or full-time worker, who's at TAFE doing a course so he or she can get an apprenticeship; they can stay employed. We will be saving Australia one beer at a time, because, if that person stays employed or the business is able to employ another person, that is good for the local economy. And, if that business grows, so does the community, because they don't just serve beer and alcohol; they sell meals, so they are getting produce from the local producers—that beef or the veggies. And then you think, 'Well, somebody's got to clean the place'—so the cleaner has a job and the cleaner can support his or her family, potentially sending kids to the local school. So, yes, one beer at a time will save a local community. It will save those people who work around the local pub.

We've seen, on countless occasions, small towns die because their local pub shut. It's a reality. It might not happen in the cities, but we're talking about regional and rural people, and that's who the Nationals look after. So, if you save regional and rural towns by one beer at a time, I'll wear that as a badge of honour every single day, because we know that over 97 per cent of small and medium businesses are in the regions. If one beer at a time saves the pub, saves the hairdresser, saves the butcher, saves the baker, saves the school and that regional town thrives, then Australia thrives—and you replicate that hundreds of times around the country—and I'll wear a badge of honour, selling one beer at a time.

But we have to reform the excise. It cannot be two years, switch the tap off and then go back to the old way, because that will not work. That will never work. And it's not fair on those mums and dads, generally, who own a pub out there, or small business owners like the flower group or David Richards with the Kempsey pubs. They put it all on the line. These aren't people who have been handed everything on a platter.

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