Australia's tax on beer, fuel and tobacco increases every six months. This is why
Every six months, Australia's tax on beer can go up, just as it did this week as well as back in February.
But the alcohol excise is not the only price hike Australians face on a regular basis – from fuel taxes to speeding fines and passport costs, there's a range of products, services and penalties that regularly get more expensive.
This is why that happens, and where you can expect those hits to the hip pocket to come from.
EXPLAINED: The reason why beer is so expensive in Australia
Every six months, Australia's tax on beer can go up. AP Photo/Nam Y. Huh
Why do some taxes and other fees increase so often?
Taxes like the alcohol excise are indexed to the consumer price index every six months. This means that, when inflation goes up, so too does the tax.
There are a few reasons why this happens, but chief among them is that, unlike the GST for example, the alcohol excise is a set dollar-figure amount rather than a percentage rate.
That means, without indexation, the value of the tax would decrease over time as inflation pushes down the purchasing power of our currency.
Australian government budgetary papers from 2014-15 about reintroducing fuel excise indexation outlined this:
"Indexation will maintain the real value of the rate," the papers stated.
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By increasing the alcohol excise in line with inflation, the federal government maintains the value of the tax. Bianca De Marchi/The Sun Herald
"Non-indexation has eroded the tax base; had indexation continued, the rate would now be about 55 [cents per litre (cpl)], that is, 17 cpl higher."
By indexing excises, the government is able to rely on them as a consistent source of revenue.
"The reintroduction of twice yearly fuel excise indexation to preserve the real value of fuel taxation revenue. If fuel taxation is to continue as a source of revenue for government, it should not be eroded by inflation over time," the 2002 Fuel Tax Inquiry wrote.
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Petrol, like alcohol, is one of Australia's excisable goods. Flavio Brancaleone
What taxes and fees are indexed?
The alcohol tax is one of a number of excise duties on goods known as "excisable goods".
These also include the fuel and petroleum excise – which, like alcohol, is indexed to inflation each year in February and August – and the tobacco product excise – which goes up in March and September, based on average weekly ordinary time earnings.
Other prices you might notice going up regularly include parking tickets and other fines – although these vary from jurisdiction to jurisdiction.
In New South Wales, for example, a penalty unit – essentially the base unit for any fine – was increased from $100 to $110 back in 1997 and has remained there ever since, whereas Victoria indexes its penalty units in line with inflation in July each year.
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Fees for passports and other travel documents increase at the start of each year. File
There are a range of other fees that regularly increase in line with inflation, including those for travel documents.
Australian passport fees increase each year on January 1. It's one of the reasons why, in addition to being one of the more powerful passports in the world, ours is also one of the most expensive.
A ten-year adult passport currently costs $325, a fair bit more than neighbouring New Zealand's at $191 ($NZD206) – even though it actually provides visa-free travel to one more nation than Australia's.
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