Kay Hull (Riverina, National Party) Share this | Link to this | Hansard source

I rise to present a petition, as approved by the House of Representatives Standing Committee on Petitions.

The petition read as follows—

To the Honourable The Speaker and Members of The House of Representatives

This petition of the Australian Association of Microbreweries, representing small breweries throughout Australia, draws to the attention of the House the inconsistent and illogical treatment between small wineries with their WET producer tax rebate and microbreweries with their non-commercially viable limited excise rebate. The taxation of alcohol currently creates an unjustifiable distortion between small wineries and small breweries that is inequitable, against common sense, Government policy and distorts industry policy.

The producer rebate on WET grants small wineries the first $1.7 million in sales WET Free (maximum $500,000 p/year), whereas the Excise Regulation grants microbrewers a limited excise refund of a maximum of $10,000 p/year and caps production at a tiny 30,000 litres p/year. Almost no microbrewery qualifies for this rebate as the average annual production for craft breweries is in the order of 150,000 litres p.a.

Microbreweries are mostly small, regional, family businesses. The inequality of alcohol taxation is depriving small breweries of 25%-30% of their annual revenue and stifles growth. Governmental support in granting alcohol taxation equality with small wineries will create growth in the small brewing industry, regional job creation and regional tourism growth.

We therefore ask the House to modernise or update the existing provisions of the Excise Regulation to permit a brewer (or group of brewers) to obtain an excise refund of 60% of excise duty paid in any one financial year up to a maximum of $500,000 p/year and that the definition of microbrewers capping production at 30,000 litres p/year be removed.

from 5,773 citizens

Petition received.

In this world of financial challenges, there is a group of mostly small regional family businesses, consisting of men and women who have carved out a niche industry, which is providing enormous benefits towards the sustainability of—primarily—our regions. Beer is a low-margin product that necessitates a large volume of production in order to support high initial investment and high ongoing costs and taxation. These high costs, in addition to the general cost increases of many of their day-to-day running requirements, are a challenge for breweries. However, the real hurdle to jump is the legislation that has a limited excise refund of a maximum of $10,000 per annum and has a cap on production of 30,000 litres per annum. If you were only producing 30,000 litres of boutique beer, you would certainly not be commercially viable, and the fact is that most microbreweries produce on average about 125,000 litres per annum. This equates to about $500,000 per annum turnover and also equates to some $190,000 in excise that is payable. It is true that there is virtually no brewery that qualifies for the rebate. This means that these small businesses, 58 per cent of which are in regional areas, are being deprived of around 25 to 30 per cent of their annual revenue. This is simply unfair.

We must allow all Australian businesses to be relevant in the future growth of our nation. As I said, 58 per cent of these breweries underpin our regional economies. If people are willing to take financial risks with money that comes from their own pockets to secure their futures then surely government policy and legislation should not work against this progressive attitude. The time has come to recognise these small breweries and their contribution to jobs and to wealth in many of our regions and across Australia in general. We must have the current legislation amended, and the budget should deliver fairness to those men and women who make up these businesses.

I must congratulate the industry for their due diligence and commitment to this issue. They will be in the House tomorrow, where they will meet with a bipartisan group of members and senators. I thank members and senators for their willingness to join in advocating for beer not to be made a cheaper product—particularly this boutique beer and specialty beer—but to support the initiative and unique talent that delivers appreciation for the taste of beer. We are not looking at raging alcohol consumption, for there is most definitely a very big difference in the general consumption of beer as opposed to the consumption of beer that is produced in our small breweries. It is indeed a taste that must be acquired. It is indeed an experience. It is indeed something that is a unique product. It would, in fact, assist in the partaking of alcohol in smaller quantities. It is not the quantity of beer one can drink from the microbreweries that goes towards making it such a popular product amongst tourists; it is the taste and the different make-ups and ingredients that go into it.

It is a fact that we are facing and confronting a global financial crisis and it is these small businesses with these unique initiatives and their drive and passion that will enable us to weather our way through these significant turbulent times. I would certainly call on the Treasurer and the Assistant Treasurer to ensure that they address this problem in the budget and that they provide the actual outcome that has been sought by the microbrewers in their petition.

I congratulate the microbrewers on the short time it has taken them to collect so many signatures in support of the industry that they have grown from very small bases. Thank you, Mr Speaker, for allowing me to present this petition in the House and bring the plight of the microbreweries into focus. I call for the upcoming budget to address that plight in order to put them on a level playing field.