Low alcohol beer will continue to be sold at lower prices following agreement by the NSW Government to maintain its subsidy.
The decision by the NSW Government to continue with the subsidy is a win not only for drinkers, but for good public policy.
The subsidy has been in place since 1997. It had been set at 15 per cent of the wholesale value of low alcohol beer and was paid to suppliers and producers. Before the introduction of the subsidy in 1997, exemptions from NSW liquor business franchise fees delivered lower prices to consumers of low alcohol beer.
The NSW Government will continue the subsidy on current arrangements until 30 June 2001.
Discussions will commence on an alternative scheme to maintain a lower price for low alcohol beer with such a scheme to be paid for by New South Wales.
The terms of the agreement are in the attached letter to me of todays date.
I commend the NSW Government for its sensible decision to continue this subsidy notwithstanding earlier statements that it would end it.
Under the terms of the agreement the Commonwealth and the States will meet before 30 June 2001 to negotiate a uniform Commonwealth excise providing a concession for low alcohol beer.
Until the expiry of budget balancing assistance, the costs of the differential excise would be deducted from that assistance. In the case of NSW this is expected to be 2007 8.
Should NSW not maintain the subsidy until 30 June 2001, two months notice to the Commonwealth will be required and NSW will pay the Commonwealth the remaining proportion of the 2000-2001 subsidy.