The bill amends the Customs Tariff Act 1995 to pause the biannual CPI indexation of customs duty rates on draught beer for two years from 1 August 2025, keeping those duty rates fixed through 1 February 2027.
This measure mirrors a related pause in excise duty indexation and is designed to ease cost pressures on pubs, clubs and other licensed venues as part of the 2025–26 Budget’s hospitality support package.
The Customs Tariff Amendment (Draught Beer) Bill 2025 inserts a new section into the Customs Tariff Act 1995 to suspend the CPI indexation of customs duty rates on draught beer for the four scheduled updates of 1 August 2025, 1 February 2026, 1 August 2026 and 1 February 2027. “Draught beer” is defined as beer in bulk containers of 8–48 litres designed for pressurised or pump delivery systems, or any container over 48 litres, classified under specified subheadings in Schedule 3 of the Customs Tariff Act (e.g. 2203.00.63, 2206.00.72, etc.). The pause takes effect retrospectively from 1 August 2025 via Customs Tariff Proposal (No. 1) 2025. CPI indexation will resume on 1 August 2027, applied to the unchanged February 2025 rates, yielding a structural reduction compared to continuous indexation. The measure is estimated to reduce underlying cash receipts by $95 million over five years and aims to support the hospitality sector and regional tourism by stabilising beer prices in licensed venues.
Freezing the CPI indexation of customs duties on draught beer reduces operating costs for pubs, clubs and other licensed venues, many of which face tight margins amid rising cost-of-living pressures [Judgment].
This stability in duty rates helps safeguard small and regional hospitality businesses from closure, preserving employment, sustaining local supply chains and supporting regional tourism economies [Judgment]. By targeting relief where margin pressures are acute, the measure promotes greater overall social welfare through job retention and community resilience.
The two-year pause in CPI indexation is estimated to cost the federal budget $95 million over five years, diverting revenue from broader public services and infrastructure without clear evidence that draught-beer producers uniquely require such relief [Judgment].
By subsidising alcohol through a duty freeze, the bill risks lowering retail prices of draught beer, potentially increasing consumption and undermining Australia’s obligations under the right to health in ICESCR Article 12 [Judgment].
2025-10-08
House of Representatives
Before House of Representatives
Unspecified
Home Affairs
Taxation, Industrial Policy