The Excise Tariff Amendment (Draught Beer) Bill 2025 amends the Excise Tariff Act 1921 by inserting a temporary provision that prevents CPI indexation from increasing specified draught‑beer excise rates for a two‑year span beginning 1 August 2025. The measure applies only to CPI‑indexed draught beer rates set out in subitems 1.2, 1.6 and 1.11 of the Act’s Schedule and does not change base duty rates.
The immediate effect is to hold draught‑beer excise rates at their 31 July 2025 level for the following two years. That reduces automatic revenue growth for the Commonwealth in the short term and creates a potential for a compounded adjustment when indexation resumes in August 2027; it also creates administrative work for the ATO and Treasury because the change is framed to operate from 1 August 2025 (retrospectively).
At a Glance
What It Does
The bill overrides the Act’s regular CPI indexation process by treating the indexation factor as 1 on four specific indexation days, meaning no statutory CPI increase is applied to the affected draught‑beer rates on those dates. It inserts a new section (6L) into the Excise Tariff Act 1921 to achieve this for the listed subitems.
Who It Affects
On‑premises sellers (pubs, bars, clubs), breweries that supply draught beer, and businesses whose pricing and contracts rely on excise‑linked cost pass‑through will see the direct operational effect. The Commonwealth (Treasury and the ATO) will manage the legal and accounting implementation and absorb the near‑term revenue impact.
Why It Matters
The bill pauses an automatic inflation‑linked tax increase for a specific product class rather than adjusting underlying rates, creating a short‑term relief for hospitality but a deferred fiscal exposure. It also raises implementation questions — including how to treat payments or accounting entries already recorded after 1 August 2025 — that affect compliance workflows and cashflows across the sector.
More articles like this one.
A weekly email with all the latest developments on this topic.
What This Bill Actually Does
Under current law the Excise Tariff Act 1921 automatically increases certain excise rates in line with the Consumer Price Index on specified indexation days. This bill does not change the statutory rates themselves; instead it inserts a narrow, temporary provision (new section 6L) that treats the indexation multiplier as 1 for the draught‑beer rates that the schedule already ties to CPI.
In plain terms: for the period covered the law prevents the automatic CPI bump that would otherwise raise those excise rates.
The freeze applies only to the CPI‑indexed draught‑beer entries identified in the schedule (subitems 1.2, 1.6 and 1.11). The Act’s commencement clause makes the change effective from 1 August 2025, which means the rates are to be treated as unchanged from how they stood on 31 July 2025 for roughly two years.
Indexation does not occur on the specified days in 2025–2027; when indexation restarts on 1 August 2027 the applicable CPI factor will be applied against the frozen rates, not against a series of intermediate increases.Operationally, the change is simple on paper but not necessarily simple to administer. The ATO will need to apply a statutory override to its indexation calculations, and where systems or invoices already reflected any CPI increase taken on or after 1 August 2025 the agency and affected businesses will need guidance on corrections, credits or reconciliations.
The bill does not amend other excise items, so it creates a divergence between draught beer and any other alcohol excise lines that remain subject to normal indexation.
The Five Things You Need to Know
The bill inserts section 6L into the Excise Tariff Act 1921 to override normal CPI indexation for draught beer.
It treats the indexation factor as 1 (no CPI increase) on four indexation days: 1 Aug 2025, 1 Feb 2026, 1 Aug 2026 and 1 Feb 2027.
The freeze applies only to the CPI‑indexed draught beer rates listed in subitems 1.2, 1.6 and 1.11 of the Schedule to the Excise Tariff Act.
The Act commences (and is taken to have commenced) on 1 August 2025, meaning rates are fixed at their 31 July 2025 level for roughly two years.
When indexation resumes on 1 Aug 2027 the CPI multiplier will be applied to the unchanged rates, which can produce a larger single adjustment than if increases had been applied incrementally.
Section-by-Section Breakdown
Every bill we cover gets an analysis of its key sections.
Retrospective start date (1 Aug 2025)
The Act declares that the whole Act is to commence on 1 August 2025 and is taken to have commenced on that date. That timing is important because it makes the indexation freeze operate from the first indexation day affected rather than from the date of passage, implicating any administrative actions or payments that occurred in the interim and increasing the ATO’s reconciliation burden.
Statutory mechanism: set indexation factor to 1 on listed dates
Subsection 6L(1) directs that, despite other provisions, subsection 6A(1) (the usual CPI indexation rule) applies as if the indexation multiplier equals 1 for each listed indexation day. Practically, that is a technical override: it leaves the statutory duty figures unchanged on the indexation dates instead of increasing them by CPI. The provision names the four indexation days explicitly, so the freeze is time‑limited and mechanically precise.
Scope defined: which rates are covered
Subsection 6L(2) limits the freeze to 'CPI indexed draught beer rate' as defined — specifically the rates in subitems 1.2, 1.6 and 1.11 of the Schedule. That narrow definition confines the intervention to particular schedule entries, rather than to all beer excises or alcohol excise lines, reducing the chance of broader distortion but creating a cross‑product differential between draught and other taxed beverages.
This bill is one of many.
Codify tracks hundreds of bills on Finance across all five countries.
Explore Finance in Codify Search →Who Benefits and Who Bears the Cost
Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Pubs, bars and on‑premises hospitality venues — they avoid automatic excise‑related cost increases on draught beer for two years, which eases short‑term pricing pressure and margins.
- Breweries that depend heavily on draught sales — they get a predictable excise cost base for two years, simplifying short‑term pricing and contract negotiations with on‑premise customers.
- Consumers of draught beer — to the extent businesses pass through excise changes, patrons face slower or no tax‑driven price increases on tap beer over the freeze period.
Who Bears the Cost
- The Commonwealth budget/Treasury — foregone automatic excise uplift reduces projected excise receipts over the freeze period and shifts fiscal pressure forward.
- The Australian Taxation Office — the ATO must implement a statutory override, reconcile any payments or records affected by the retrospective commencement and issue guidance; that creates administrative and operational work.
- Businesses with mixed product lines (packaged and draught beer) — they face pricing and accounting complexity from a split treatment of similar products and may need systems work to apply different indexation rules.
Key Issues
The Core Tension
The central dilemma is whether to trade predictable, phased excise increases (which protect revenue and avoid price shocks) for a temporary, targeted pause that gives short‑term relief to hospitality but defers fiscal pressure and may produce a concentrated adjustment when indexation resumes — a choice between short‑term sectoral relief and longer‑term revenue and administrative consequences.
The bill delivers a narrow, time‑bound policy lever but leaves important implementation and distributional questions open. Because the Act takes effect from 1 August 2025, the ATO will need to determine whether and how to adjust assessments, invoices or credits for any calculations already made after that date — the text does not set out an explicit correction or refund procedure.
That gap risks inconsistent treatment across taxpayers and will require administrative guidance and potentially extra resourcing.
There is also a material economic trade‑off: freezing indexation provides immediate relief for a defined subset of suppliers and consumers, but it defers inflationary adjustments into a single restart point in August 2027. The law directs that the indexation multiplier for 1 August 2027 be applied against the unchanged rates; depending on cumulative CPI over the freeze period that can produce a sharper, lump‑sum increase than the gradual step‑ups that would otherwise have occurred.
Finally, by targeting only certain schedule subitems the measure creates a differential between draught and other alcohol products that may change relative pricing and product mix in ways the bill does not address.
Try it yourself.
Ask a question in plain English, or pick a topic below. Results in seconds.