Zali Steggall (Warringah, Independent) Share this | Hansard source

I rise to speak on the Excise Tariff Amendment (Draught Beer) Bill 2025. I have to wonder whether government MPs have genuinely read this legislation when they start talking about how this is going to help small businesses. To be very clear, this Excise Tariff Amendment (Draught Beer) Bill is only going to apply to tap beer. So all those small businesses with bottles will not get the benefit of this. So maybe pause and reflect as to why it is that the government is picking and choosing within the same industry. Only the big hotels and associations, like RSLs, and all those that have beer on tap will get a freeze in the excise. Small breweries that bottle will not get this. I am not sure that they are aware of the distinction that is happening.

Right now across Australia, and sharply felt in Warringah, our independent brewing and distilling industry is in the grip of what many describe as a recession. This industry is integral to our small-business ecosystem and yet, like many small businesses, it is being squeezed from every direction—pandemic-era debt, inflation, rising input costs and an increasingly burdensome excise tax. Last September, together with follow crossbench MPs, I wrote to the Treasurer calling for urgent relief for distilleries and breweries, proposing to reduce the impact of the alcohol excise on distilleries. This bill takes a small step in the right direction. It's a welcome pause in draught beer excise indexation, but what about everyone else in this industry? Why is it that only the big players that have access to the tap contracts within the hotels and RSLs are having access to this freeze on excise indexation? It leaves behind distillers and barely touches the structural issues facing small brewers, and the government has not given any explanation as to why. There should be no arbitrary policy divide between breweries and distilleries. They're all small manufacturers. They both employ locally, they both enrich our communities and they all deserve a fair go. The government has decided to pick and choose winners rather than extending this support to the whole industry. I have to ask: why is it that the government is only choosing, essentially, to assist an industry that has lobbying power and access to the doors of ministers?

From my point of view, I care about small business and I care about making reform and making these kinds of support measures fair to ensure all small businesses have access to them. Warringah is home to an incredibly vibrant brewing and distilling community—from Freshwater Brewing, Dad and Dave's, 7th Day Brewery and Broken Bay Brewing to the iconic Manly Spirits and all the creative makers throughout Brookvale's independent precinct. Our independent brewers and distillers bring together the Warringah community. It's because of them that we have community events such as BrookieFest, an annual precinct-wide street party. They employ locals—young people getting their first job, skilled brewers, hospitality workers and delivery drivers. They support local artists, food suppliers and tourism. When one of these businesses closes, the loss ripples far wider than just the venue. And yet those local brewers and distilleries in Warringah have expressed to me that, while they recognise the positive intent of this legislation, it's practical impact on small independent breweries is likely to be minimal to zero unless they change their operations, because it will only apply to tap draught beer. This is because tap access in pubs and clubs is locked up by long-term contracts with multinational brewers.

A 2017 ACCC report confirmed that a significant portion of taps in venues—including many of the venues that I have heard listed by previous speakers, particularly government backbenchers—are tied up by multinational brewers in long-term contracts. The ACCC report confirmed that a significant proportion of taps in venues are tied to exclusive or near-exclusive supply deals. Therefore, many small breweries are unable to benefit from draught-specific-excise relief regardless of this bill's pause on indexation.

Another challenge left completely unaddressed is the competitive barrier affecting growing brewers as they exceed the excise remission cap. Brewing and distillery businesses in Warringah have voiced their frustration at the sharp increase in payable excise as they grow beyond the cap, which erodes profitability. Additionally, the indexation freeze does not extend to bottled or canned alcohol. So, again, we're talking about picking and choosing. One Warringah brewer has already ceased packaged wholesale production because the indexation freeze only applies to draught beer, not cans or bottles. Others tell me they're approaching the excise cap, and they worry about the steep cliff once they pass it.

So how did we get here with such a complex system? Excise on beer and spirits is indexed to the CPI twice a year. Since 2020, excise has risen nearly 20 per cent during the same period. So, thinking about 2020, in five years it's nearly been a 20 per cent increase already. At the same time, for these small businesses, energy prices have surged; hops has increased by more than 50 per cent; malt has risen by nearly 20 per cent in a single year; utility costs have almost doubled; and refrigeration, transport, storage and finance costs have all ballooned. In just two years to April 2025, 51 independent breweries have closed or entered voluntary administration. They are the small businesses you all talk about.

This is a sector worth nearly $2 billion annually to the economy, and, with the right policy settings, distillers could become a $1 billion export industry by 2035. We cannot let short-term piecemeal measures undermine what should be a thriving Australian manufacturing success story. We need a comprehensive strategy. Yes, a pause on draught beer excise indexation is welcome. But it doesn't fix the problem for small business and small breweries. If you really want to give small businesses a fair go, anticompetitive practices in tap contracts need to be looked at, as well as the steep excise cliff once producers exceed the remission cap and the exclusion of distillers.

Again, we have thriving boutique gin distilleries in many areas around the country, yet they don't get any of the assistance that the Hotel Association seems to be able to get for tap beer. We have to look at how we're going to help everyone within this sector—including, in relation to the exclusion of distillers, the rising input costs that continue to outpace revenue. I've already pushed for broader and fairer reforms, including through my letter to the Treasurer, through amendments and through consultation with Warringah's brewing and distilling community. They are pleading for the government to make this fair reform, not just piecemeal and picking at favourites. A thriving brewing and distilling sector should be ambitious, innovative, sustainable and supported by a government that is willing to create conditions for small manufacturers to grow.

The temporary pause in beer excise indexation is a reprieve for some breweries, but it isn't the long-term solution that alcohol producers of all kinds have been calling for since the pandemic. Broader measures should be taken to address the anticompetitive nature of the beer industry and ensure that the long-term sustainability of the brewing and distilling industries is safeguarded. To ensure that these issues are brought to the fore, I move second reading amendments (1) and (2) as circulated in my name:

That all words after "That" be omitted with a view to substituting the following words:

"whilst not declining to give the bill a second reading, the House:

(1) notes that:

(a) our local independent breweries and spirit distilleries are in crisis;

(b) brewers and distilleries carry a huge financial burden, from growing inflationary pressure to the price of energy, and issues around staffing and the rising cost of alcohol excise taxation;

(c) excise on beer and spirits has increased by more than 17 per cent since 2020, adding significant strain on our brewers and the spirits industry;

(d) according to the Independent Brewers Association, at least 51 independent brewing businesses entered voluntary administration or closed in the two years to April 2025, as mounting costs and rising excise made it harder to stay viable;

(e) Australia's spirits tax remains indexed to CPI twice a year and is one of the highest spirits taxes in the world; and

(f) while this Bill provides relief in taxation for draught beer it does not extend this assistance to these other producers; and

(2) calls on the government to:

(a) freeze indexation of all alcohol excise taxes until at least 1 August 2027;

(b) index the excise remission cap annually in line with inflation; and

(c) extend the deadlines for payback of excise debt to the ATO".

I urge government members to have an internal discussion about why you are only picking certain areas of beer to protect or to assist with this excise freeze. The amendments that I propose recognise that the struggling brewing and distilling industries need assistance. They acknowledge the ongoing financial strain. This bill ignores so many distillers entirely.

These amendments call on the government to freeze indexation for all alcohol excise until 1 August 2027, not just those that have the passes to come into parliament to advocate on behalf of their industry. They call to 'index the excise remission cap annually in line with inflation' and 'extend the deadlines for payback of excise debt to the ATO'. We need to be assisting these small businesses rather than taking a stick to them and creating an even more anticompetitive environment by assisting the big players that have access to the on-tap contracts. While I welcome that some measure has been introduced, please do the job properly, make it fair and consistent, create a competitive field for all businesses and, genuinely, put good legislation through this place.

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