Albo, don’t freeze the spirits excise, cut the damn thing
A freeze to the excise buys time; cut the excise, for hospo only, to make our cities better.
Those cost of living pressures aren’t really going anywhere, are they?
People are feeling the pinch of rising rents, the cost of the weekly shop isn’t getting cheaper — you know the story.
And when it comes to the bar world, as we’ve written before, the cost of drinks — spirits and cocktails in particular — is forever going up. We’ve reached the point where it will be standard, soon, to see $30 cocktails. And that means that the number of people who can spend time in a bar — and spend their money on cocktails — grows ever smaller.
This is A Very Bad Thing, if you ask me. The health of a city’s bar scene is an indicator of the health of the city itself.
And one of the big drivers behind the increasing cost of drinks is the twice yearly increase in the spirits excise, which is linked to the consumer price index. Reports have it that half the price of a bottle of spirits is made up of tax.
Also, we pay more tax on spirits than New Zealand does, and what is up with that?
It inevitably leads to more expensive cocktails and spirits offerings in Australian bars and restaurants. And it means that guests are incentivised to drink other, lower cost options — see how every bar is a wine bar these days? — or drink at home.
It’s something that the Night Time Industries Association is trying to tackle by arguing for a freeze in the excise rate on spirits for 24 months; it’s a commendable call, but I don’t think it goes far enough. The Australian Distillers Association and the drinks industry has been arguing for a freeze for years — I first wrote about their call for a excise hike freeze back in 2014 — and they have got exactly nowhere.
They should be arguing for a cut to the excise rate. Do that, and maybe they’ll end up scoring a freeze.
But let’s say they do get a pause in increase of the excise rate. It doesn’t make it more attractive to drink spirits in bars today — it is already too expensive. And it doesn’t make it more relatively attractive to drink in bars than at home, because the retail space gets the same benefit. Call me heartless, but I don’t think Dan Murphy’s is having much in the way of business problems at the moment. They don’t need the benefit.
What the NTIA, Australian distillers, and bar and restaurant owners around Australia ought to do is argue for a cut in the excise rate for on-premise venues.
It’s not difficult to set up different taxation depending on where the consumption takes place; tap beer is already taxed at a different rate to packaged beer, they have the technology. And, I guess, the deep governmental desire to keep the pubs and the Australian Hotels Association happy.
And — as I'm sure Albo knows — they’ve already put in a pause on the excise rate! But for tap beer only. Which I think shows that cutting the excise on alcohol for on-premise wouldn’t be that much of a hit to the government’s budget.
But it would be a huge boost to hospitality. It would benefit small business, the hospitality industry, and all the producers that feed into it; busier venues means more employment, more revenue, and — ironically — the government will probably collect more tax, not less.
It would surely help our nightlife rebound, make our cities busier, and with more people around at night, it would make them safer, too.
And, if the government wanted to minimise the hit to the budget, they could set eligibility criteria for venues, and I’ve got a suggestion for that: if a venue props up their revenue with pokie machines and gambling, leave them out of it. (That’s not gonna happen, I’m sure — but a boy can dream.)
The government doesn’t need to commission another review of the alcohol tax system to get this done. That’s just kicking the can down the road. Reviews are delays, and the hospo sector needs help now. Better to get on with it.
The government can make a simple change to the way spirits are taxed right now. It would help the bar and restaurant industry, it would mean a more vibrant night time economy, and the public would actually be able to afford the world’s best hospitality.
Get us back in the game, Albo!
What’s happening
You know, Albo, there is a lot happening in the Newtown and Enmore area — just imagine how much better it could be?
Earl’s Juke Joint has a trio of Sunday pop-ups starting on August 10. Their Street Eats & Beats series features guest chefs from Olotl Taqueria, Little Lagos, and Kolkata Social in the house, live DJ sets that match music to the eats (Latin hip hop, Afrobeat, Desi hip hop), and Espolòn Tequila cocktail specials. It’s happening from 6pm to 10pm, on August 10, 17, and 24.
Silver’s Motel opens this week (Thursday, we hear). It’s a whisky bar, with country cocktails, and a design aesthetic from another era. It’s also the most anticipated bar opening this year.
Sam Bygrave
And more Enmore news: Deadwax opened last night, the photos look great. Follow them on social, and get our scoop on what to expect at the link below.
Sam Bygrave