Lack of Budget support for breweries ‘no surprise’
The Federal Budget this week was notably and perhaps expectedly free from support for the brewing industry, according to the sector’s biggest organisations.
The Budget, triggered by the election of the Labor Party earlier this year, was handed down yesterday and was notably devoid of support for a number of sectors.
While no direct support was mentioned for brewing or ancillary industries, there were some wins for general smaller business, a category which many of Australia’s 600-plus breweries fall into.
But this was not enough, according to Kylie Lethbridge, chief executive of the Independent Brewers Association.
“With a considerable national debt clearly the issue I am not surprised that there is no specific mention of support for the beer industry but given the situation our members are facing it is sad that I struggled to find reference to small businesses or start-ups in the budget papers at all,” she said.
“While it is honourable to see support for electric vehicles, mental health support for small business and initiatives to help improve energy efficiency and reduce energy use it doesn’t feel like there is a real understanding of how hard it is for Australian businesses at the moment – nor how dire the future looks.
“We would have definitely liked to see initiatives to reduce energy costs, greater and more immediate support for skills shortages and grants that support capital investment.”
Other organisations such as the Australian Small Business and Family Enterprise Ombudsman said the moves Lethbridge highlights were “extremely welcome”, but also doubled down on highlighting the major challenges faced by small businesses.
“Small and family business owners are literally exhausted. They are struggling to make rosters work and keep doors open due to labour and skills shortages; grappling with supply troubles that means critical inputs, goods and services are not always available, on edge about cyber security fears and some are fighting floods and other natural disasters,” Ombudsman Bruce Billson said.
The Budget promised $62.6 million over three years for small and medium-sized businesses energy efficiency grants to reduce energy use and lower bills.
In addition it detailed $10.9 million in extra funding for the New Access for Small Business Owners mental health support program operated by Beyond Blue, and $4 million extra for the Small Business Debt Helpline operated by Financial Counselling Australia offering free phone-based support to small business owners.
Excise is a major issue for the wider alcohol industry every Budget, although with the excise rebate increase up to an annual cap of $350,000 announced last year, the pressure has been alleviated from the smaller end of the market.
This week, the government suggested that the outlook for alcohol excise receipts has improved, driven by stronger consumption of higher-taxed spirits and RTDs “compared with lower-taxed beer” and high import prices have supported customs duties applied to imported goods.
The Brewers Association, members of which consist of Coopers, Kirin-owned Lion and Asahi-owned Carlton and United Breweries, has consistently lobbied for cuts in excise to benefit the major brewers.
The BA launched a pre-Budget submission prior to the Budget of the former government under Scott Morrison which proposed a 50 per cent cut to the excise rate for draught beer.
While this has not come to fruition with this latest Budget, John Preston, chief executive of the BA, said that it had not been expected.
“There’s nothing there for us, it’s out of the usual budget cycles as well so we weren’t expecting anything,” Preston acknowledged.