State Government to continue light-alcohol beer subsidy

23/5/00
The State Government will continue to subsidise light-alcohol beer even though it won't receive any revenue from liquor excise after July 1 this year.
Premier Richard Court said today that the State Government would work in consultation with industry on the new subsidy arrangements to apply from July 1.
"This will ensure that the lower price of light strength beer will be maintained, encouraging responsible alcohol consumption in line with the Government's health and social objectives," Mr Court said.
The current subsidy costs Western Australia about $7 million a year.
Mr Court said that a significant increase in light strength beer prices would have resulted if the State had discontinued its subsidy.
The cost of the subsidy would be covered by the State's share of GST revenues and guarantee payments from the Commonwealth under the national tax reform arrangements.
The future of State subsidies have been in doubt with the distribution of Commonwealth liquor taxation revenues to the States under the so-called safety net arrangements due to cease from July 1.
These arrangements replaced the State taxes on liquor that were effectively ruled unconstitutional by the High Court in 1997.
The State subsidy ensured no increase in tax on light beer.
In addition the States have been awaiting the announcement of the Commonwealth's new excise on beer to determine the impact on beer prices with and without the State subsidy.
The new Commonwealth excise, announced in the Federal Budget earlier this month, replaces the previous wholesale sales tax on beer from July 1.

Media contact: Justine Whittome, 9222 9475