A fighting spirit

Whisky king calls for an end to ‘crippling’ tax

TASMANIA’S burgeoning spirits industry is being crippled by high tax rates that have reached an unsustainable and “ridiculous” level, says the godfather of whisky Bill Lark.

The Tasmanian distiller earned that title after his successful overturning of a nineteenth century federal law in the 1980s, which paved the way for every Australian distiller which has come along since.

Now he is leading the charge with an alliance of award-winning craft distillers and large spirits companies who are lobbying the federal government for an urgent freeze or reduction on Australia’s spirits tax.

Australia has the third highest spirits tax in the world, with automatic sixmonthly increases — the rate is 69 per cent higher than New Zealand’s and 950 per cent higher than the US.

Spirits made from grain, like gin and whisky, are taxed $88 per litre of pure alcohol.

Mr Lark said this was disproportionate compared to all other alcohol categories.

A joint pre-budget submission by the Australian

Distillers Association and Spirits and Cocktails Australia is calling for a reduction of the spirits tax to match brandy, which is $6 a litre less, and freezing CPI increases for three years.

Mr Lark said the alliance was also calling for an increase in the excise refund limit, from $100,000 to $350,000, which would be an equivalent level of support offered to small wine producers.

He said the spirits tax accounts for 50 per cent of a distiller’s overheads.

“We recognised back in 1992 the biggest detriment to our growth was this excise,”

Mr Lark said. “Our industry directly employs 5000 people and 15,000 indirectly — when Lyn and I started, it was the two of us at the kitchen table so it’s grown that much in just 28 years.

“The world wants our product, we’ve just got to be able to produce more of it.

“The excise is crippling the industry — we don’t mind paying tax, the government will do very well out of us, we just need a bit of assistance to grow and three years would give us a chance to do that.”

Mr Lark said the pre-budget submission was supported by independent economic modelling by PricewaterhouseCoopers that showed a freeze in the tax would produce increased revenue for the government.

“It’s holding back opportunities for growth, job creation, investment in distilleries to expand/realise tourism and export potential,” he said.

“I’ve never understood how they could justify an increase every six months and it’s taking us to a ridiculous level that just isn’t sustainable. Nobody has ever been able to give us an answer to why spirits are taxed so much higher than other alcoholic products..”