By Andy Young, editor TheShout
Australian distillers look set to benefit for this year’s Federal Budget, after Treasurer Scott Morrison announced the government was extending the excise refund scheme.
Domestic producers of whisky, vodka, gin, liqueur and low-strength fermented beverages, such as non-traditional cider, can now receive a refund of 60 per cent of excise paid up to $30,000 per financial year.
Stuart Gregor, the president of the Australian Distillers Association (ADA), told TheShout that the ADA was delighted with the news.
“We are delighted to hear that around 70 to 80 Australian Distillers will now get a refund of up to $30,000 in the excise they pay. It will mean a lot to these small businesses and means they can reinvest it in their business and new barrels or equipment, so it’s great news,” Gregor said.
He added: “It’s great to see that the government has recognised Australia’s distillers and in particular that the small business minister, Kelly O’Dwyer is talking about Australian distillers.”
Speaking about the boost to distillers, O’Dwyer said: “The government is committed to supporting small businesses in the industry, and ensuring the right conditions see businesses grow and expand globally.
“These changes will provide a boost to the approximately 100 distillers in Australia who will eligible for the scheme including many new whisky distillery start-ups in Tasmania.”
Many of these distillers and other companies in Australia’s liquor industry, will also benefit from a cut to the small business tax rate, down to 27.5 per cent from July 1. The small business tax will also be extended to cover companies with a turnover of up to $10 million, handing a 2.5 per cent break to up to 60,000 companies.
The announcements were also welcomed by the CEO of the Australian Liquor Stores Association, Terry Mott.
“The company taxation changes which have been announced in the Budget will assist small and medium retail liquor enterprises across Australia by reducing the amount of tax they pay,” Mott said.
“The rate will drop to 27.5 per cent and the turnover threshold will be realistically increased to $10 million from July 1, while the rate of company tax over future years progressively decreases to 25 per cent.”
He added: “The Government’s commitment to extend the alcohol excise refund scheme to the burgeoning domestic artisan spirit and cider producers is also good news and is similar to that already applying to boutique brewers.”
Although the government stopped short of a complete overhaul of the alcohol industry’s taxation, Gregor added that he gave a “big thumbs up” to last night’s Budget.
“It’s a good first baby step towards fixing Australia’s alcohol taxation,” he told TheShout.
The scheme, which is expected to cost $9m over the next four years, will not be extended to most alcopop producers or to wine producers who currently benefit from the wine equalisation tax (WET) rebate. The Treasurer also announced some WET reforms and plans to invest $50m in Australian wine exports and wine tourism.