The Government has kept its commitment on beer as was stated in the Governments policy, A New Tax System.
Page 87 of that policy stated:
" the change in excise will be limited so that the retail price of a carton of full strength beer need only increase by the estimated general price increase associated with indirect tax reform." (ie 1.9%).
It is not possible to have a standard excise regime which produces a 1.9% price rise in a carton of beer and the same on a draught beer across the bar.
Senator Lees notes that the Government has kept to its promise on wine which was that:
"The Wine Equalisation Tax will be levied at such a rate that the price of a four litre cask of wine need only increase by the estimated general price increase associated with indirect tax reform; ie 1.9%." (ANTS, p87)
Again this is the effect on the low value product even though it moves the cost of a bottle of premium wine by more than 1.9%.
The Democrats fully support the application of the GST to services. There is no consistency in applying the GST to the service of food in a restaurant, which the Democrats support, but not applying it to the service of alcohol in the same restaurant, or in a pub or club. Since a draught beer has a service component, a standard excise and GST means that its price moves more than a packaged product.
Whilst todays press release might be seen as good populist politics, it is not properly thought through and is unachievable under a standard excise and GST regime.
If the Democrats were really interested in holding the Government to its election commitments they would have passed the Governments tax policy in full, a long time ago.