As of February 1st, drinkers and drivers are looking at higher tax rates and more expensive habits, while smokers will do the same starting in March. The change is due to the excise indexation that happens twice a year because of inflation. While the people targeted are surely not happy about the extra expense, automatic indexation has been in practice since the 1980s when the Hawke government introduced it.

Petrol users had a break since 2001, when the Howard government froze the rate at 38.1c per litre because the GST was introduced. However, as of last year, the fuel made its way back on the excise indexation list, having been added by the Abbott government, promising to allot $1.1 billion for regional roads in order to quiet the opposition of the Labour.

How much more expensive will alcohol and fuel be?

The excise on fuel rose from 39.2c per litre to 39.5c per litre, which amounts to a 0.3c increase. That doesn’t seem like much, but it makes a full 60-litre tank 18c more expensive. Currently, a full tank sets you back $23.70 more in government taxes.

As for alcohol, things are significantly more complicated. 700ml bottles of spirits will increase in price by 17c, while 24 cans of pre-mixed spirits are 29c more expensive. The beer tax will be increased by 3c on a six pack and by 13c on 24 cans of beer (full-strength).

Alcohol taxation is confusing and elaborate, with three different systems in place, in addition to GST. For a long time, people have called for a total reformation. As it stands now, the tax rates on alcohol are contradictory, at best.

Their result is that people are pushed to buy alcohol from the airport, go out for a beer at the pub, instead of drinking at home, choose cheap wine over expensive one, bypass spirits for brandy and purchase wine from small producers, not larger ones.

The 2009 Tax Review that proposed universal tax rates that are not based on beverage type, but on alcohol volume, which not only makes more sense and is less confusing and discriminatory, but it also stands to make an additional $1.8 billion per year.

How much more can we be expected to actually pay in tax rates?

Here is a run-down of the new tax rates and how much they have increased:

  • 30ml shot of spirits = 91c, (+ 1c)
  • 700ml bottle of spirits = $21.28,( + 17c)
  • One can of RTD spirits = $1.52, (+ 1c)
  • 24 cans of RTD spirits = $36.47, (+ 29c)
  • 24 cans of light-strength beer = $5.73, (+ 5c)
  • 24 cans of full-strength beer = $16.15,( + 13c)
  • Six-pack of light-strength beer = $1.43, (+ 1c)
  • Six-pack of full-strength beer = $4.04, (+ 3c)
  • 1 litre of LPG = 12.9c, (+ 0.1c)
  • 1 litre of fuel = 39.5c, (+ 0.3c)
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