Backside up! The federal government is making an enormous tax break for distillers

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  Bottom up!  The government is making a huge tax break for distillers

An alcohol-related COVID recovery is pending for the coast after an announcement by the federal government revealed that small liquor manufacturers would receive a significant tax break.

A support package for the country’s craft brewers and distillers enables small businesses to claim a full refund for any excise tax they pay up to $ 350,000 annually.

The changes announced in this month’s budget mean that the current refund limit of $ 100,000 would nearly triple the amount of liquor makers that can be sold before the excise duty is payable.

Woombyes Cavu Distilling joined the chorus of liquor makers urging tax breaks earlier this year and warned them not to employ more local workers.

Matt Hobson, co-owner of Cavu Distillery. Image: John McCutcheon

Co-owner Matt Hobson was delighted that the industry lobbying had paid off.

“We are delighted that the call to the government was heard loud and clear,” he said.

“It will really help our distillery and other distilleries across Australia, especially distilleries in regional areas.”

Starting July 1, Mr Hobson said the $ 250,000 tax break would help the small distillery employ more coastal workers.

He said it would also go a long way in building their brand and increasing the popularity of all distilleries in the area.

“Our plans for this are absolutely outrageously related to employment,” he said.

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“We probably estimate that around this time next year we will double our workforce … and hopefully more.

“In fact, it’s like our business is getting charged.

“Immediately our cash flow positions improve and the money can be spent where it is needed to grow our business. We are very excited about this.”

While Mr Hobson said the announcement was a huge win for the industry, he urged the government to consider cutting the liquor tax.

“The government certainly hasn’t changed the excise tax, which is the third highest in the world in terms of tax on spirits,” he said.

Brew Sunshine and Sons from Cavu Distillery.  Image: Patrick Woods

Brew Sunshine and Sons from Cavu Distillery. Image: Patrick Woods

“The industry will continue to push for change and we are certainly at a disadvantage compared to brandy winemakers.”

Mr Hobson told the daily in March that the distillery paid the government $ 26.39 per bottle of excise tax, which is effectively part of the retail price and has made the production of its coastal liquor an expensive proposition.

Greg Holland, CEO of Spirits and Cocktails Australia, said the high spirits tax was “a significant damper” on investment and sustainability in the industry.

“With a fairer alcohol tax system that aligns liquor tax rates with brandy and freezes CPI increases, our liquor makers can bounce back from COVID and create even more jobs, buy even more products from local suppliers, including Australian farmers, and contribute to lure tourism back to regional areas, “he said.

There are 600 brewers and 400 distilleries across Australia, around two-thirds in regional or rural areas.