AUSTRALIA | Tax on alcohol will rise again, prompting warnings that taxed spirits have become unaffordable and that rising drink costs have driven demand for cheap, illicit alternatives.
The excise hike, one of the largest six-monthly increases outside of COVID, will see the tax on RTDs and spirits such as whisky, gin and rum rise to AUD 110.15 a litre.
Australia already has the highest spirits tax in the world outside of Scandinavia, with the federal government expected to raise AUD 9.1bn in total alcohol taxes this year alone.
For a standard 700ml bottle of spirits, approximately AUD 30 goes directly to Canberra in alcohol excise, and that’s before GST has been added on.
The latest tax rise has come after research has shown illicit alcohol is now being sold alongside legal, taxed products in Australian bottle shops, with some products containing dangerous contaminants.
“We have a system where twice-yearly tax hikes on alcohol have been on autopilot since the early 1980s. This means that from next week, the tax on spirits is now over AUD 110 per litre of pure alcohol, a rate six times higher than in the United States and about double that of New Zealand," said Spirits Council of Australia executive director Steven Fanner.
“This is not a system that should be a set-and-forget, without reform; the government risks a myriad of unintended consequences, including driving demand for cheap, black-market alternatives."
Fanner added that the nation has seen what has happened with tobacco, when relentless tax increases and inadequate enforcement created market opportunities ripe for exploitation and have a narrow window of opportunity to prevent the same thing from happening with spirits in Australia.
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