A bizarre beer tax that slugs craft brewers 40 per cent more for using smaller kegs will be axed in the federal budget
Currently, draught beer sold in kegs exceeding 48 litres is taxed at lower rates compared with beer sold in smaller kegs.
"We are changing the rules to ensure that small breweries like this and distilleries around the country can actually compete on the same level playing field as the big guys," Treasurer Scott Morrison told reporters at Capital Brewing Co in Canberra.
The federal budget will extend concessional draught beer excises to smaller kegs, and increase the amount beverage companies can claim back at a cost of $85 million over four years.
Alcohol manufacturers can currently claim a refund of 60 per cent in the excise duty paid on beer and spirits of up to $30,000 a year.
This will increase to $100,000 from July 1 next year, and apply to all brewers and distillers for the first time.
While Mr Morrison had earlier raised the "tantalising" prospect of cheaper craft beer, two brewers flanking him at a press conference didn't back price cuts.
Andy Orrell, who owns Sydney-based craft brewery Hairyman, said he was unlikely to sell cheaper beer.
"We will be investing in infrastructure and also jobs," Mr Orrell said.
Canberra's Capital Brewing Co are also likely use the boost to invest in more employees and infrastructure.
"We set the what the tax is and the excise. Ultimately what businesses charge is up to them," Mr Morrison said.
Opposition frontbencher Penny Wong said it was a grand idea, which the coalition pinched from her Labor colleague Anthony Albanese.
"I think it's a good idea, and it's Albo's idea," Senator Wong told the Nine Network.
Mr Albanese, who visited the Willie the Boatman brewery in Sydney on Friday, described the "common sense change" as a victory for people power.
"Craft brewers deserve to operate on a level playing field with the big multinational beer brands," he said.
"And beer drinkers should pay the same regardless of what brand of beer they enjoy."
There are about 380 craft brewers across Australia employing about 2400 people.
Australian Associated Press