Alcohol prices up

[trustyrusty]

Hi read in the news, tax up $2.26 /l of alcohol.. does that mean beer or spirits? If it’s beer then that will be $1 a schooner? It must mean hard liquor??? Typical news ... show people drinking beer to outrage when it might mean 5c.... just watched a video going up
to 2.26, could be going up
2c they don’t say.... could be 20c... probably not a lot but they have made it sensational.... but do we pay $1.00 a schooner ? Wow - Thanks

 

[MHB]

Here are the new Excise rates effective from today (03/02/2020), tax goes up automatically every six months or so, some sort of scale based on CPI (or a minimum even if CPI was negative).

If you looked at the price change for a 5% ABV on tap beer (1.11 on the table), the rate has gone from $35.71 to $36.14 per Litre of alcohol. To do the calculation
First you calculate the amount of taxable alcohol, you get to deduct 1.15% that's compensation for GST so you aren't taxing a tax.
5% - 1.15% = 3.85%
50L * 0.0385 = 1.925L of taxable alcohol
1.925L of alcohol * $35.71 = $68.74175 Excise at old rate.
1.925L of alcohol * $36.14 = $69.5695 Excise at new rate.
Increase on a keg $0.82775 so call it 83 cents per keg
Around here we drink Schooners 425mL, a keg is 50,000mL so 117.647 Schooners in a keg
The excise on a schooner would be $0.5913 (59cents) per
An increase of $0.0070358 or 0.7cents per schooner.

I'm not arguing that excise is a fair and equitable tax, just the increase isn't really all that much.
Personally I think the Wine makers get a very easy ride, Brewers get beat up on a bit, Distillers get thoroughly screwed. Probably tells you more about the thought processes of the people that phrased the law than anything else is likely to (Chardonnay sipping Ar.... if probably being harsh)
Must have been a slow news day somewhere
Mark

 

[trustyrusty]

Here are the new Excise rates effective from today (03/02/2020), tax goes up automatically every six months or so, some sort of scale based on CPI (or a minimum even if CPI was negative).

If you looked at the price change for a 5% ABV on tap beer (1.11 on the table), the rate has gone from $35.71 to $36.14 per Litre of alcohol. To do the calculation
First you calculate the amount of taxable alcohol, you get to deduct 1.15% that's compensation for GST so you aren't taxing a tax.
5% - 1.15% = 3.85%
50L * 0.0385 = 1.925L of taxable alcohol
1.925L of alcohol * $35.71 = $68.74175 Excise at old rate.
1.925L of alcohol * $36.14 = $69.5695 Excise at new rate.
Increase on a keg $0.82775 so call it 83 cents per keg
Around here we drink Schooners 425mL, a keg is 50,000mL so 117.647 Schooners in a keg
The excise on a schooner would be $0.5913 (59cents) per
An increase of $0.0070358 or 0.7cents per schooner.

I'm not arguing that excise is a fair and equitable tax, just the increase isn't really all that much.
Personally I think the Wine makers get a very easy ride, Brewers get beat up on a bit, Distillers get thoroughly screwed. Probably tells you more about the thought processes of the people that phrased the law than anything else is likely to (Chardonnay sipping Ar.... if probably being harsh)
Must have been a slow news day somewhere
Mark

Thanks great explanation and what I thought, it’s not much... but they make it sensational in the news... and then the pubs get on it and use excuse to put up 50c. Is it true the craft brewers get hammered more tax?

 

[MHB]

Not really, Excise is charged on alcohol, make stronger beer pay more tax!
True craft brewers probably make more strong beers than do the big boys, there is also an excise rebate for smaller breweries, probably a swings and roundabouts, you pay less tax but spend more on labour and all that.
Mark

 

[trustyrusty]

Thanks - I heard someone from craft beer company complaining... probably only focusing on what they dont have to what they have, the usual - he did say 80% of costs were taxes - ? not sure I believe..thanks

 

[enoch]

It was a masterful bit of spin from the pub lobby. The GST would be higher component of price.
I had forgotten the weird tiered excise with <8 litre containers getting hit for around $50 a litre.

 

[Hangover68]

I have a client at work that imports 20ft ISO tanks of spirits, just think of the excise on 24,000ltrs @40% ABV.