Ben Small (Forrest, Liberal Party) Share this | Hansard source

I joke with friends that representing Forrest in this place should really be called being the member for wineries and breweries, because I take both a close personal and professional interest in their affairs throughout the south-west of Western Australia.

I started my very first business in the hospitality industry with a tavern that was focused on showcasing local produce, beer and wine to local people. I've subsequently sold that business, but the point is I come to this place with a deep understanding of the impact that excise tax plays on both the alcohol industry and the hospitality industry more broadly, and what isn't widely understood is that the craft brewery industry, whilst it only accounts for about 10 per cent of the Australian beer market by volume, accounts for some 47 per cent of the jobs that the industry creates. And so, when we consider reform to the excise tax system, it must be through the lens of enabling those predominantly small and family owned businesses to do what they do best, and that's create jobs.

The reality is that the excise tax system, which, for decades now, has slugged consumers and businesses with an increase twice a year, regardless of economic conditions, consumer demand or the health of the businesses that pay it, means that it is pubs and punters that pay excise tax and that it is pubs and punters who pay through the glass when the government fails to control inflation. Unfortunately, in the last few years, that is exactly what has resulted in the price of pints skyrocketing. Whilst I won't stand between Australian consumers and some relief, the reality is that the government's bill is, in effect, giving Australians a 1c per pint reduction in that excise tax. I think Aussies at the moment are asking for some fairness, some sustainability in the industry and some common sense, and, unfortunately, this bill falls short of that.

Because alcohol excise is ultimately a consumer tax, every increase flows straight through to consumers. A two-year freeze on that, delivering some 1c per pint in relief, is just a start. The reality is that Australians—certainly the people in my electorate—are doing it tough. That means that they're not indulging on the night out with the family, they're not going down to the pub with their mates to watch sport, and they're not investing in their own community, and that is what is ultimately making this cost-of-living crisis bite harder. It's making it harder for families and harder for Australians to enjoy an affordable social experience. I think, when our social fabric is under perhaps more tension than it has been for many decades, that is worthy of deeper attention. Slashing excise would provide immediate relief not just to those small businesses but to the everyday Australians who are their customers, and that's why we shouldn't be talking about a two-year freeze but about wholesale reform of the excise tax system.

As I said, ultimately, our craft brewing industry in Australia is predominantly one of small and family owned businesses. They're innovative. They add character. They bring tourism opportunities and local jobs to our communities, especially in the seat of Forrest. But those producers currently face one of the highest beer-tax regimes in the world. Depending on whose numbers you believe, Australians are paying certainly in the top five and perhaps even in the top four levels of excise tax on their beer in the world. That's not giving our small and family businesses in this industry a break, and it's not helping our consumers in Australia spend in their local communities.

Excise is charged by volume, not profitability, and that means that a small brewer owned by perhaps just a husband and wife pays the same tax per litre on the beer that they brew as the very large multinational corporations who operate in Australia, even though they do so with very different scale, very different margins and very different market power with which to absorb those costs. For many craft brewers, excise is one of their single largest expenses, and it has a massive cash-flow impact, because it needs to be paid at the point of production not the point of sale. That means that these small and family businesses are carrying several hundred thousand dollars a quarter, in many cases, of excise liability on beer that hasn't even been sold yet. As industry groups have consistently warned, the excise system in Australia currently discourages innovation, investment and growth in an industry that I think all Australians have a soft spot for.

So, if we acknowledge the pressure on hospitality venues, we've got to understand that those pubs are more than businesses. They're community hubs; they're employers of young people, often giving them their first leg-up into the workforce; and they're anchors of the local economy, especially in regional parts of Australia. But this continual rise in excise—twice a year, automatically—combined with the higher wages, higher energy costs, higher insurance premiums and higher rents has pushed many venues to the brink. Again, a two-year freeze in excise goes no way to addressing these cost pressures on these businesses. And, because it is pubs and punters that pay the price for the government's failure to manage inflation, ultimately you pay the price, through every pint of beer, for the ongoing inflation problem we have in Australia.

A healthier hospitality and brewing sector means more jobs, more investment and stronger local supply chains. In the seat of Forrest, that means more people growing barley and hops, which requires a great deal of innovation to do in Australia. It includes more opportunities for truck drivers, technicians and tourism operators. Cutting the excise tax in Australia would stimulate economic activity in my part of the world, when we continually talk about the need to diversify away from the mining sector and yet do nothing about it. Over time, I believe that the impact to government revenue through a significant cut to excise would be offset through the increased economic growth and increased employment growth that we would see directly result from that decision.

I guess there's always the fun police, though, that want to say that any change to alcohol tax in Australia would unleash a wave of irresponsible drinking. No industry group or participant in the hospitality sector opposes sensible regulation, effective education and harm minimisation in our communities. But blunt, automatic and heavy-handed tax increases go no way towards substituting for targeted health policy in Australia. Indeed, they currently punish everyday responsible Australians and the small businesses that they support while doing very little to address harmful drinking behaviours in our community. Smart policy could balance health objectives with the economic reality that these small and family businesses face, and that's why I think that our excise regime overall needs to be the subject of parliamentary inquiry to take stock around Australia, to understand the impacts in the beer, wine and spirits sectors, and to land at a reform package that would benefit Australia and Australians. Instead, we've seen a stunt, frankly, that delivers Australians 1c per pint in tax relief but nothing else. And I think that's why this is such a missed opportunity for Australia.

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