David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

I rise to make some important comments about the brewing and distilling industry in Australia which has hitherto been a flourishing part of cultural life, in regional Australia in particular. There are over 600 distilleries and breweries around the country and many of them are in the Lyne electorate. Before I go on, I'll just give a big shout-out to our famous local brewers and distillers from Port Macquarie down through the Lyne electorate. We have Coastal Brewing in Forster-Tuncurry. The Coastal Brewing company has a very established range. There's Moorebeer Brewing and Black Duck Brewery in Port Macquarie. We have got the Tinshed Brewery in Dungog and the Farmer's Wife Distillery in Allworth, and in Forster we have the separate and brand-new Wharf St. Distillery. They are all locally grown and flourishing distillers and brewers who supply the local market. But they are under pressure like everyone in this industry because of the effects of inflation.

When you think about it, a brewery or a distillery, whether on a small scale or a large scale, is subject to all the vagaries of every other manufacturing process. They're heavily dependent on expensive kit. They've got to provide property to have a brewery or a distillery. The actual setup has a huge capital cost. There are all the ingredients—the distilled water, the hops, the grains that are involved, the biologicals and, for those making spirits, the raw alcohol. Barley and hops have gone up in price, as have aluminium cans. There have been massive electricity price rises.

Last but not least, and most significantly, there's the excise. It goes up twice a year, according to CPI. Due to the current situation of high inflation that we have in this country, this is really starting to squeeze a lot of businesses, sending them to the wall. There have been huge increases in excise over the last three years with the high inflation rate. In 2023, the increase was 11 per cent for beer in just one year. It was 12 per cent in two years and 16 per cent in three years, and just in February this year it was 1.8 per cent, then two per cent in August a few days ago. The cost of beer is not elastic. You can't keep charging more and more for beer. It's like milk for Australians. Beer is part of the cultural heritage. In moderation, it's great, and it's part of Australian culture.

We've found out from the tobacco excise and taxation that, if you really start taxing too much, you end up with an illicit trade, and that's what has happened. Receipts for taxes on nicotine have been cut significantly because of—chop chop—illegal tobacco that's being brought in along with vapes and other things like that. But I think the government should realise we are now the third-highest-taxing country in the world for beer and spirits. We won't have a vibrant industry if we send breweries, particularly small, boutique breweries, to the wall. We already have one in Port Macquarie that I didn't mention because they're no longer trading. They used to be called The Little Brewing Company, and their eventual death knell and closure happened because they couldn't get staff. That was because all their staff had gone off and started working in the NDIS, because the payment in the NDIS is above most skilled, semiskilled and trade-certified workers in many other industries.

Our budgetary income for beer and spirits was meant to be $2.65 billion, but the last budget downgraded it already, so we are at a tipping point where more breweries and distilleries in country areas will close. Prominent cases of them closing were reported in the Financial Review, but they were very big. They were more than just a small brewing company, but they have come unstuck because of their tax obligations. It's a really complex industry to do well in. You only survive if you have great product. But, as I mentioned, too much taxation will kill industry. We all want alcohol in moderation. I'm not advocating for no excise; I'm just saying, 'Give them a breather.'

There is a very important rebate for these small brewers so they can compete with the big international brewers who are dominating the Australian market now, and that is a remission scheme for the excise. If they're a small-scale brewer, they pay the excise like everyone does, but the first $350 is rebated. That's why we have a flourishing small brewery and distillery industry in Australia rather than having just the big international firms. But that isn't indexed. With all those two, three, five and six per cent increases twice a year, things are tipping, and I don't want to see these thriving bits of cultural life go. It goes with dining and tourism, and my electorate is full of tourism. It's a coastal electorate. All those areas are big businesses in a local sense, and it would be a tragedy if they were to suffer.

I'll put this marker in the ground now. I'll be calling on the Treasurer and the finance minister in the next budget to announce a freeze on the excise so that we can keep our local brewers and distilleries. We've been in the wine industry through the restriction of trade through tariffs. We've seen that, whether a tax is from the country you're trying to sell to or from your own country, it will cruel our industry. We need to look at it, because we will be in the same situation as after raising the taxation on tobacco. It'll go underground, there will be illegal distilleries, and jobs will be lost. I commend this issue to others in the building. I'm sure you've all got some breweries and some distilleries in your own electorates; they are big employers. The value of small breweries and distilleries is that there's not some distant faraway shareholder that's taking profits out of the business; all the people working in them live locally and all the money circulates into the local economy. It's much better to have these little breweries rather than huge, international breweries off in faraway capital cities, where you can still get a beer and you can still buy a gin and tonic but it's not the same because you're not helping your local economy. I commend this issue to many on both sides, to take the time to educate the financial ministers in Finance and Treasury that they are about to kill the goose that laid the golden egg, so to speak.