Want votes? Keep beer taxes low — Wacky Tax Wednesday

Australia typically increases excise duty rates for beer, spirits, and other excisable beverages twice yearly, in February and in August. But after August 2025, Australian beer tax rates may not rise again until August 2027. To increase the popularity of his Labor government, which has waned, Australian Prime Minister Anthony Albanese intends to freeze tax hikes on draught beer for two years.

“Freezing the excise on draught beer is a common sense measure that is good for beer drinkers, good for brewers, and good for pubs,” said Albanese. Treasurer Jim Chalmers concurred: “This is a modest change but will help take a little bit of the pressure off beer drinkers, brewers, and bars.” 

Plus, it could win Labor some votes.

Australia’s 2025 federal election must be held by May 17. Prime Minister Albanese will call the federal election when he feels the moment is right (which is likely to be when he feels his party has the best chance of winning).

Could keeping Australian beer taxes flat give his party the boost it needs?

Speaking at Hawke’s Brewery on March 1, 2025, the prime minister said freezing the excise on beer for two years will allow businesses to plan with more certainty. “This will make a difference,” he said. 

Excise rates are based on the consumer price index (CPI), which generally inches up over time. The duty rate was $103.89 from August 5, 2024, to February 2, 2025. And the rate is $104.31 from February 3, 2025, to August 3, 2025.

If reelected, the government will freeze indexation for draught beer for two years from the next indexation date of August 2025.

The excise duty on beer applies to alcohol content above 1.15% by volume (in the finished product) and depends on alcohol content. The higher the alcohol content, the greater the excise duty — though the size and type of container also come into play.

For beer with an alcohol volume not exceeding 3%, the current rate for an individual container of 8–48 liters (inclusive) that’s designed to connect to a pressurized gas delivery or pump delivery system is $10.57 (all dollar amounts in this blog post are in Australian dollars). 

But for an individual container of less than 8 liters, or a container of 8–48 liters (inclusive) that’s not designed to connect to a pressurized gas delivery or pump delivery system, the rate is $52.87.

Check out this list of alcohol rates for beer for more examples.

The excise duty will go up in August 2025. If the Labor Party comes out on top during the upcoming election and moves ahead with its plan, beer excise rates won’t increase again until August 2027.

Back at Hawke’s Brewery, a journalist asked the prime minister whether freezing the beer excise tax will make any difference to the average beer drinker. “So we won’t see the schooner price go up for two years?”

Albanese responded with, “If it does, then no one can blame the Government.”

The prime minister also said this tax policy change “has been requested for a long time, by the hoteliers, by clubs, and by small operations like this.” In 2024, Australian brewers and distillers criticized tax increases on their products and urged the government to freeze tax hikes.

The Independent Brewers Association noted that while the biannual tax hikes likely weren’t a problem for large, foreign-owned beer businesses, they hurt smaller brewers. “Every cent that independent brewers spend on excise is money they cannot invest back into their staff, innovation, sustainability, or supporting their communities.”

The spirits industry concurred. “These six-monthly increases are becoming increasingly difficult for our business to sustain, and they are impossible to plan for,” said Craig Michael, Director of the Bellarine gin distillery in Victoria. “How can we accurately undertake financial modelling and make business decisions if we don’t know what tax rate we will be paying in six months’ time?”

Nevertheless, the Australian government hasn't frozen the excise on spirits, and the spirits industry isn’t pleased. “The tax on spirits is already three times higher than it is on beer,” said Greg Holland, Chief Executive of Spirits & Cocktails Australia. He sees no policy justification to support a tax freeze on beer alone.

However, at the end of February, the government announced a different tax relief plan for distillers and wine producers as well as brewers.

Under the current policy, brewers and distillers get a full remission of any excise paid up to $350,000 each year. The Albanese government says that as of July 1, 2026, the excise remission cap will increase to $400,000 for all eligible alcohol manufacturers.

The Wine Equalization Tax (WET) producer rebate cap will also rise to $400,000 on July 1, 2026.

According to a government media release, this tax relief plan could decrease tax receipts by $70 million over five years (from 2024–2025). Don Farrell, Minister for Trade and Tourism, says this will help build “a better Australia.” 

Whether the government’s various tax relief measures for the beverage alcohol industry will persuade Australians to raise a glass (and cast a vote) for Labor remains to be seen. In the meantime, you can find more wacky tax blog posts at the Avalara Tax Desk.