How the price of beer could sway Australia’s next election

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Australian Prime Minister Anthony Albanese has announced his government would temporarily halt tax hikes on draught beer in August.

He made the announcement on Saturday amid sagging popularity for the governing Labor Party ahead of a general election due by May.

"The Albanese Labor Government will freeze the indexation on draught beer excise for two years, in a win for beer drinkers, brewers and hospitality businesses," the government said in a statement.

“This will take pressure off the price of a beer poured in pubs, clubs and other venues, supporting businesses, regional tourism and customers across Australia.”

The centre-left government currently levies inflation-indexed tax hikes on alcohol producers twice a year, as had been done for decades.

The measure will start from the next indexation date in August. The government plans to consult the sector before its implementation.

Treasurer Jim Chalmers said the “modest change” would “take a little bit of the pressure off”.

Australia is one of the world's wealthiest countries per capita and one of the highest-spending on alcohol per capita.

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Speaking to media at a brewery in Sydney, the capital of New South Wales, Australia's most populous state, Albanese said that attending pubs was "part of who we are as Australians".

"This is something that has been requested for a long time," he said, referring to the tax relief.

Alcohol is infused in the social life and identity of many Australians, but researchers expect a trend towards abstinence from alcohol to grow in coming years driven by health concerns and rising prices.

The Independent Brewers Association (IBA) said it welcomed “any change that will provide some relief for our Australian owned small manufacturers”.

However, it said the two-year freeze had come after 84 successive increases at a time when 48 per cent of independent breweries have said they are currently struggling to retain profitability.

Chief Executive Officer Kylie Lethbridge said she looks “forward to a commitment to more meaningful change to our unfair alcohol tax regime and initiatives that would support Australian-owned small brewing businesses”.