Beer, cigs up - but very quietly

THE half-yearly "sin taxes" on beer and cigarettes will jump by twice as much as usual because of the high inflation rate - a move that will itself further increase cost of living pressures.
The tax on a packet of 50 cigarettes will leap by 35 cents to $12.73. Those buying a pack of 20 smokes will pay an extra 14 cents in tax.
Spirit drinkers will hand the Rudd Government almost $18 each time they buy a 700ml bottle of whisky or gin, with the tax up by 49 cents, and by 46 cent on a bottle of brandy.
The changes, which will hit consumers on Friday, will also mean the tax on a slab of full-strength 375ml cans of beer will jump by 48 cents. There is no extra tax being collected on a glass of light or full-strength beer served across the bar, but the excise on a mid-strength beer rises by one cent.
Ready-to-drink spirits face a further price rise on top of that imposed by the Government in the recent budget, with the tax on a six-pack of premixed alcopops rising by up to 24 cents.
The excise rise is linked to the consumer price index and occurs on August 1 and February 1 every year. Known as automatic indexation, it was introduced 25 years ago by the Hawke government to end the horror budget-night headlines declaring "beer, cigs up" that took attention away from spending announcements. The Government expects to collect $9 billion this year in alcohol and tobacco excise.
While ministers are quick to announce similar "adjustments" to pensions and other benefits, no minister puts out a press release announcing these tax rises. The Government hopes it will pass unnoticed.
Smokers and drinkers could face a price rise greater than the excise adjustment because retailers and manufacturers may take the opportunity to pass on other price rises relating to production costs and profit margins.
Last week the Bureau of Statistics said the cost of living was running at its fastest pace in 13 years with prices across the board rising by by 4.5 per cent last financial year and by 1.5 per cent in the June quarter alone.