Australia’s liquor associations have largely expressed their disappointment with last night’s Federal Budget, labelling Treasurer’s plans for the economy as misguided and a missed opportunity.

This article covers the liquor production side of the industry, with TheShout to cover the reaction from hospitality and retail associations to the Budget later in the week.

In his address to Parliament, and the country, last night Treasurer Jim Chalmers said: “The Albanese Labor Government will invest in a Future Made in Australia plan to bring new jobs and opportunities to communities in every part of our country.

“Making our future here in Australia is about making the most of our nation’s potential and making sure everyone shares in the benefits.

“The 2024-25 Budget will invest $22.7bn over a decade to help Australia succeed and remain an indispensable part of the global economy as the world undergoes the biggest transformation since the industrial revolution.

“This plan will help Australia build a stronger, more diversified and more resilient economy powered by clean energy, to create more secure, well-paid jobs and encourage and facilitate the private sector investment required to make the most of this opportunity.

“It will invest in innovation and technology that will help ensure we remain globally competitive, and recognises the vital role of regional Australia in our national prosperity.”

In a statement following the Budget, Spirits and Cocktails Australia’s (SC&A) CEO, Greg Holland questioned forward estimates that predict growth of $180m for 2024-25 and annual growth of $200m for the three years thereafter when this year’s spirits excise is down $200m on estimates published last year. Especially after the Treasurer once again failed to take positive action to address Australia’s stifling spirits excise.

Holland said: “It’s difficult to understand how Treasury has arrived at these growth predictions for our industry while we are still completely hamstrung by the world’s third highest spirits tax.

“We are already paying $101.85 per litre, with six-monthly increases coming yet again in August and February.

“We wish we shared the Government’s optimism, but its growth forecast is simply not achievable under these conditions.”

It’s a sentiment shared by Paul McLeay, CEO of Australian Distillers Association, which has fought hard alongside SC&A for an overhaul of the spirits excise system, and particularly given the Government’s ambitions to grow domestic manufacturing. 

McLeay said: “While we are hugely supportive of the Future Made In Australia policy, we hope the Government does not miss the opportunity to scale other manufacturing industries like spirits, in pursuit of its more costly objectives in solar, green steel and minerals processing.

“We have 700-plus distilleries in this country making products that simply cannot be replicated by manufacturers in other nations, because they are singular expressions of Australian ingredients, provenance and technical prowess. 

“It won’t take billions of dollars of investment to kick-start our industry. We don’t need excessive subsidies, we just need modest adjustments to policy settings, starting with tax relief.

“We look forward to making this case for the Government in the food and beverage manufacturing inquiry over the coming months.”

Meanwhile Australia’s wine industry also expressed its disappointment at the Budget, describing it as a missed opportunity, that ignores industry’s pleas for urgent support.

“This Budget provides no relief for the serious challenges facing growers and winemakers in regional communities across much of Australia,” stated Australian Grape & Wine CEO Lee McLean. “The industry’s struggles are not the result of normal market fluctuations, but stem from factors outside the industry’s control, including the loss of our largest export market in 2020.”

McLean criticised the omission of the industry’s modest pre-Budget submission requests, including a $30m sustainability package, $36m for export assistance, and $20m for domestic wine tourism.

“We made it crystal clear – many in regional wine communities across Australia are on their knees and need urgent government action to stop a bad situation from becoming a catastrophe,” McLean said. “However, instead of support, all we got was a new tax in the form of the deeply flawed Biosecurity Protection Levy.

“While China’s decision to lift import duties is positive, it will simply not resolve the issues facing growers and winemakers. The economic shock experienced by our industry has led to unsustainable prices for grapes, an oversupply of wine, and increasing economic disadvantage in regional Australia.”

“It’s a damning indictment of just how dire the situation is when the refund on an empty wine bottle is worth more than what many of our growers receive for the grapes that fill it,” said McLean.

“It’s disappointing that despite the sector’s $45.5bn economic contribution, the government has turned a blind eye to our pleas for assistance. We call on them to reconsider this missed opportunity.”

Australian Grape & Wine said it remains committed to fighting for growers, winemakers and regional communities. “We will not let this go,” said McLean. “This deliberate failure to help families in regional Australia jeopardises the viability of entire communities, and without help it is only going to get worse.”

One of Australia’s leading accounting bodies, CPA Australia, also said the Budget should have done more to help small businesses and that many small business owners across the country will be feeling underwhelmed by the Budget.

Fuel costs, power bills and various other inflationary pressures are having a hugely detrimental impact on many small businesses,” said CPA Australia Chief Executive Officer, Chris Freeland AM. 

“Small businesses – most of which already have very thin margins – desperately needed a budget that would help alleviate the cost pressures they are facing on a daily basis.

“While the emphasis on relieving pressures on household finances was expected, a more business-centric budget would benefit all Australians as small businesses are significant contributors to the economy and job creation.”

While Freeland welcomed the one year extension to the instant asset write off for smaller businesses, he said that research from CPA Australia shows, Australian small businesses trail behind most countries in the Asia-Pacific region when it comes to business innovation, use of new technology and are ultimately less likely to experience growth.

“Government support for initiatives like cyber-security will help Australian small businesses catch up to their regional counterparts, ” Freeland said. “The rebranded myGov will also bring greater security when interacting with government. These are all steps in the right direction.

“It’s positive that the government continues to talk up the need to build a more productive and dynamic economy. There are many policies essential to achieving those objectives that are in addition to the government’s industry and competition policies. Take for instance, the relatively low proportion of Australians under 40 owning their own business. Our annual small business survey shows that increasing the proportion of young Australians starting their own business or acquiring an existing business has a positive influence on business growth and productivity.

“The range of targeted small business support in this budget makes sense, but a more comprehensive look at the sector is needed. We look forward to the proposed National Small Business Strategy that will help business, community and government work together to nurture and grow our economy.”

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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