In order to boost the hospitality sector's recovery, Australia’s federal government announced on Saturday tax cuts of up to AUD 250,000 (USD 194,000) a year for liquor producers hit by coronavirus.The move will come into effect from July 1 and will benefit smaller brewers and distillers according to federal treasurer and deputy leader of the Liberal Party Josh Frydenberg.
“Australian brewers and distillers are world leaders in their field and this measure is going to assist them to continue to invest, grow and create jobs,” he said.
According to the ruling, producers will be allowed to sell triple the amount of alcohol before being required to pay excise tax, reducing their overall tax burden. This favors especially smaller breweries which will are also the hardest hit by the pandemic.The tax cuts will sum up to AUD 255 million (USD 198m) a year to the liquor industry.
There are around 600 brewers and 400 distillers across Australia, with around two thirds operating in rural and regional areas. “The announced changes will allow these brewers and distillers to keep more of what they earn, helping them to invest, grow and support around 15,000 Australians that are currently employed in the sector,” Mr. Frydenberg said in an announcement.
Consumers hope also for lower prices of their pint with brewers handing down at least part of the tax cuts to consumers. For long, beer prices in Perth, Western Australia, have been the second highest in the world next to Oslo, Norway, due to excessive tax rates.