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

I move the amendment on sheet 1, circulated in my name:

(1) Schedule 1, item 1, page 3 (after line 23), after section 6L, insert:

6M Temporary freeze in indexation for tap spirits

(1) Despite any other provision of this Act, subsection 6A(1) applies, in relation to a tap spirit and each CPI indexed alcoholic beverage rate, as if the indexation factor were 1 for each of the following indexation days:

(a) 1 August 2026;

(b) 1 February 2027.

Note 1: This means the rates as they are on 31 July 2026 will be unchanged for the next year.

Note 2: When indexation resumes in August 2027, the indexation factor for 1 August 2027 will be applied against these unchanged rates (see subsection 6A(1)).

(2) In this section:

CPI indexed alcoholic beverage rate means a rate of duty set out in:

(a) item 2 of the Schedule; or

(b) subitem 3.1, 3.2 or 3.10 of the Schedule.

indexation day has the same meaning as in section 6A.

tap spirit means:

(a) an alcoholic beverage not exceeding 10% by volume of alcohol stored in an individual container:

(i) of at least 8 litres but not exceeding 48 litres; and

(ii) designed to connect to a pressurised gas delivery system or pump delivery system; or

(b) an alcoholic beverage exceeding 10% by volume of alcohol stored in an individual container:

(i) of at least 4 litres but not exceeding 20 litres; and

(ii) designed to connect to a pressurised gas delivery system or pump delivery system.

The amendment on sheet 1 would require the Treasury to conduct a comprehensive review of Australia's alcohol tax system by 2 November 2026. This amendment is about one simple truth: on our current course, the Australian way of life is being taxed and inflated away by the government prioritising ideology and spin over the lives of everyday Aussies. While inflation is easing overseas, Australia's inflation again rose in December. When the cost-of-living crisis is being added to by a further 3.8 per cent, it's becoming an emergency.

Australians are doing it tough. Young families can't afford homes. People are struggling to put food on the table, and now, thanks to a government that has lost control of inflation and that is obsessed with taxing you, many Australians can't even afford a drink. Having a drink with your mates is part of who we are, especially as Australians. It's how people stay connected, especially in regional Australia, yet today Australia has some of the highest alcohol taxes in the world and one of the most irrational systems for collecting the taxes. Alcohol taxes are automatically indexed to inflation twice a year, every February and August, regardless of what's happening in the economy, regardless of the cost-of-living pressures and regardless of whether pubs, clubs or consumers can afford them. This means Australians are getting hit twice—first, they're hit by inflation pushing up the price of everything, and then, second, they're hit by these automatic tax increases. You pay more, and they collect even more tax. Australians are already paying over $100 in tax on a litre of some spirits, compared to around $15 in the United States and about $60 in New Zealand.

We know exactly what this kind of policy leads to. We've seen it with the tobacco excise. The government jacked up tobacco taxes year after year, ignored warnings and told Australians it was all about health outcomes. But what actually happened? Smoking rates went up, criminal gangs moved in, the illicit trade exploded and tax revenue collapsed. There were more smokers and less revenue—less revenue to fund health services, the exact opposite of what the tax was intended to achieve. That's one of the biggest public policy failures in Australian history, and I fear the same will happen with the tax on alcohol unless the government starts taking this problem seriously. That is what this amendment is about.

To its credit, the government, under pressure from the National Party, has agreed to pause indexation on draught beer for two years, and it's no surprise that we support it. But it's really nothing more than crumbs from the Treasurer's table; it will deliver less than a cent per pint, and it's not good enough. It doesn't fix the system. It doesn't deal with the fundamentals. Only a thorough review of our alcohol tax settings can do that. For years now, on both sides of politics there has been a broad acceptance that Australia's alcohol tax system is broken. It is overly complex. It taxes similar products in wildly different ways. Beer, wine, spirits, cider and ready-to-drink products are all taxed under a completely different regime, often with no clear policy rationale. It is not based on health objectives or modern consumption patterns. Labor's Henry tax review all the way back in 2010 acknowledged it was a mess, but nothing was done, and it's only gotten worse.

This amendment takes the sensible, responsible step to start fixing that mess. It requires Treasury to review the current alcohol tax system and report back to parliament with options for reform. This is a system we have had for over 100 years without a major review, and it's long past due. A review will create the evidence based policy that is needed to restore common sense to our alcohol tax settings, and I commend the amendment to the House.

Alison Penfold (Lyne, National Party) Share this | Link to this | Hansard source

I rise to support this important amendment, this sensible amendment to the Customs Tariff Amendment (Draught Beer) Bill 2025. It will ensure that Australia has an alcohol tax system that is modern, consistent and delivers the sort of reform that Australians deserve. I support the bill that is before the House. I spoke on the bill last year and I agree that we should not let perfection get in the way of good.

But the reality is that the bill will deliver only a very small change. What is it—1c a pint? When I spoke to the pubs and clubs in my electorate during the election last year about this bill and about the policy commitment, many of them said to me, 'Well, look, it's really not going to make that much difference because we've actually been subsidising the excise increase for years.' They simply have not been able to afford to put up the price of beer because they then wouldn't get the patrons in the pub. As many, many speakers on all sides of the parliament have said, we value the work that our pubs and clubs do. They support the local footy teams. They do amazing fundraisers. I was at a fantastic one on Saturday night supported by Club Old Bar where we raised $16,000 to build a permanent cenotaph for the Old Bar's RSL sub branch.

I appreciate that this bill intends to make a small change, but the fact of the matter is we have a significant issue with our alcohol excise system, one that has not been properly reviewed really since it was first implemented. I know the Henry tax review some 10 years ago acknowledged that the system was broken and in need of reform. Well, we need to do that work now. It's time to do a full review and have it report back to Treasury with recommendations.

I might just say something a little bit controversial here, which is not going to be about Taree and the Urgent Care Clinic, I'm sorry to disappoint. Look, I'm not a big beer drinker and, frankly, a lot of women are not big beer drinkers. So whilst this is something that speaks to the tradies and to many people across the electorate, to be quite frank, women tend to drink more tap spirits. Certainly, there are some local producers in my electorate looking at tap spirits and low-carb options as well for those of us very conscious of our diets. We need to do something that's far more comprehensive, far more far reaching, far more inclusive of all Australians and their preferences when it comes to having a drink at a pub or a club.

I thank the member for Cowper. We share a border and we share people. Many of my people enjoy the pubs and clubs in the member for Cowper's electorate, so I'm pleased to be able to speak in favour of this amendment.

Daniel Mulino (Fraser, Australian Labor Party, Assistant Treasurer) Share this | Link to this | Hansard source

I refer to my summing-up speech for the Excise Tariff Amendment (Draught Beer) Bill 2025. I won't repeat all of that but will simply reiterate that the government believes that this bill is also drafted in a way that strikes the right balance between supporting our pubs and clubs while maintaining budget sustainability, so, for that reason, we won't be supporting this amendment.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment be agreed to.

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

I move the amendment on sheet 2 circulated in my name:

(1) Schedule 1, item 1, page 3 (after line 30), after section 19AABC, insert:

19AABCA Temporary freeze in indexation for tap spirits

Temporary freeze in indexation

(1) Despite any other provision of this Act, subsection 19(1) applies, in relation to a tap spirit and each CPI indexed alcoholic beverage rate, as if the indexation factor were 1 for each of the following indexation days:

(a) 1 August 2026;

(b) 1 February 2027.

Note 1: This means the rates as they are on 31 July 2026 will be unchanged for the next year.

Note 2: When indexation resumes in August 2027, the indexation factor for 1 August 2027 will be applied against these unchanged rates (see subsection 19(1)).

(2) In this section:

CPI indexed alcoholic beverage rate means a rate of duty in the following:

(a) the rate column of subheading 2208.20, 2208.20.10, 2208.20.90, 2208.30.00, 2208.40.00, 2208.50.00, 2208.60.00, 2208.70.00, 2208.90.10, 2208.90.20 or 2208.90.90 in Schedule 3;

(b) the rate column of an item in the table in Schedule 4A or a later Schedule that relates to a subheading in Schedule 3 specified in paragraph (a).

indexation day has the same meaning as in section 19.

tap spirit means:

(a) an alcoholic beverage not exceeding 10% by volume of alcohol stored in an individual container:

(i) of at least 8 litres but not exceeding 48 litres; and

(ii) designed to connect to a pressurised gas delivery system or pump delivery system; or

(b) an alcoholic beverage exceeding 10% by volume of alcohol stored in an individual container:

(i) of at least 4 litres but not exceeding 20 litres; and

(ii) designed to connect to a pressurised gas delivery system or pump delivery system.

This relates to having spirits on tap. I've already spoken at length about that, and I commend it to the House.

Mike Freelander (Macarthur, Australian Labor Party) Share this | Link to this | Hansard source

The question is that the amendment on sheet 2, moved by the member for Cowper, be agreed to.