Jun 19, 2017

Private Members’ Business – Craft Brewing Industry


On 4th December 2017, Anthony Albanese tabled to Parliament 1,477 signatures calling for an end to the current unfair tax treatment of small brewers in Australia.
For full speech click here.

Federation Chamber

Mr ALBANESE (Grayndler) (18:26): I move:

That this House:

(1) notes the growth of the craft brewing sector in recent years as a generator of employment, tourism and exports in capital cities and regional communities;

(2) further notes:

(a) there is an inequity between how Commonwealth excise is calculated for small and large scale brewers which disadvantages the craft brewing sector;

(b) that excise currently accounts for a disproportionate amount of the costs of production for small brewers and the calculation of excise imposes a significant burden on them; and

(c) this small business sector provides local employment and is an emerging tourism attraction; and

(3) urges:

(a) the Australian Government to ensure policy settings which encourage the realisation of the potential of the craft brewing sector; and

(b) state and local governments to update their planning controls and development approval to facilitate the growth of the craft brewing sector.

I do so in support of those Australians who are currently employed by the more than 400 craft brewers around Australia. The craft brewing industry is a job creation powerhouse, but if we get the policy settings right it could generate even more jobs not just in our capital cities but also in our regional communities. Craft brewers employ locals and buy local produce for their operation, while craft brewing related tourism is booming.

Craft beer is a quality product; however, the industry has been restricted by outdated planning controls and development approval processes at the state and local levels, and this resolution calls for local and state governments to provide support to the craft brewing sector. But the fact is it is also disadvantaged at the federal level by poor legislation related to the excise rates faced by small brewers. Today the rate of the federal excise charged for a keg containing 50 litres of beer is less than the rate charged for a keg containing 30 litres. In addition to this, a maximum tax rebate a brewery can receive per calendar year is $30,000, which compares unfavourably to the wine industry’s producer rebate of some $500,000.

These anomalies put Australia’s craft beer brewers at a competitive disadvantage against mass produced beers. With excise making up approximately 40 per cent of operating costs for most craft breweries in Australia, this has to change. On Friday, five brewers from the inner west of Sydney in my electorate came together to form an industry association that aims to turn the precinct into the craft beer capital of Australia. This association was formed following a forum of microbrewers I hosted in March with the shadow minister for agriculture, Joel Fitzgibbon. Peter Philip is the founder of Wayward Brewing Company, located in Camperdown, and one of the five founding members of the association. Peter has noted the operating costs are not the only problems that have come out of unfair excise on smaller operators. He said: ‘If there was no tax discrimination for smaller kegs, then most pubs and breweries would prefer to use 30-litre kegs, which make for fresher beer, more variety and fewer injuries. Not only would changing the excise on craft brewers give the industry the economic shot in the arm it needs, it would also lead to safer working conditions and better beer.’

As our brewers do better, so do the industries that they rely on for their operation. Microbreweries are large consumers of agricultural produce, going through tonnes of grain and hops a week—mostly Australian grown. Hopsgrowers have gone from selling low-value, bittering hops to the big breweries to selling high-value innovative hops to craft breweries. The unique beers produced by these unique ingredients are fuelling the premium beer sector in China, estimated to be worth some $35 billion by 2020. There are also great opportunities for craft beer tourism, whereby operators set up walking tours for enthusiasts to visit several breweries to sample different types of beer.

If the government is serious about supporting small business in Australia then it needs to get serious about changing the legislation to help our brewers. Despite the obstacles faced by the industry it continues to expand, and the type of kick-on employment that the sector supports, such as boutique hops growers, is vital to a healthy and diverse national economy.

With proper support from the federal government, the potential for growth is enormous. Already, major regional centres, like Ballarat, Wagga Wagga, the Hunter, the Illawarra and in Tasmania—including Scottsdale, where I visited the brewery there—have seen growth in local jobs, with people being employed and local communities being able to gather. I certainly have respect for the resilience and success of the craft beer-brewing industry. I have respect for the sector’s contribution to the national economy. And I have respect for the fact that local breweries employ local people.

I will end with a quote from Russell Crowe, as his character John Nash in the film A Beautiful Mind:

I have respect for beer.

I commend the motion to the House.