Australia's budget struggles as tobacco revenue declines

Various taxes on certain goods and services in Australia help support the government budget. These taxes, known as "sin taxes," apply to items considered vices, as well as essential goods. The budget, to be released by Treasurer Jim Chalmers, relies heavily on this extra revenue. One of the most talked-about sin taxes is on alcohol. For instance, the excise tax on draught beer can range from $10.57 to $43.49 per liter. The government expects to collect $7.8 billion from alcohol sales this financial year, with beer accounting for $2.7 billion. To attract more customers, Prime Minister Anthony Albanese announced a freeze on beer excise for two years, though it will only save drinkers a small amount. Wineries also face taxes, such as the Wine Equalisation Tax (WET), which is 29 percent on the wholesale value. This tax can affect consumer prices, though there is a rebate for smaller producers. For spirits, excise duties are higher. A 700ml bottle of brandy incurs about $27 in taxes, showing how much extra consumers pay for hard liquor. Cigarettes have seen significant tax increases, and the government's strategy to reduce smoking has led many to seek black market options. Revenue from tobacco excise is expected to decline further, projected at around $8.8 billion this year, despite recent increases. A pack of 20 cigarettes can cost about $40 due to high excise. Fuel prices also include a substantial excise tax, currently set at 50.8 cents per liter. This tax contributes significantly to road infrastructure funding. The government estimates that fuel excise will generate $24.6 billion in revenue for the next financial year. Lastly, luxury cars carry a tax of 33 percent on any value above $80,567. This tax impacts the final price consumers pay and is forecasted to raise around $1.2 billion in revenue next year. Originally aimed at protecting local manufacturing, it has become another source of government income.