Australia's beer prices have risen sharply over recent decades because alcohol excise is indexed to inflation and increases every six months, a system that has been in place for more than 40 years. That steady drip of state extraction has helped make beer prices in Australia some of the most expensive in the world in 2026, while pubs and live music venues get squeezed by costs set far above the barroom floor.
The people paying for it aren't the ones writing the rules. Workers on wages or salaries, renters trying to survive record-low rental affordability, and anyone hoping for a cheap drink after work are the ones stuck with the bill. The article says the cost of alcohol is grinding pub culture and live music venues into dust because it is too expensive for people to go out for a drink regularly.
Who Pays for the Machine
The federal excise system was fundamentally changed in the 1983-84 federal budget by the Hawke Labor government, which introduced six-monthly indexation for all excise rates except crude oil and LPG so Commonwealth excise revenue would keep pace with inflation. That bureaucratic fix has never left. It keeps taking, every six months, with the calm efficiency of an apparatus designed to protect revenue first and social life second.
Then federal treasurer Paul Keating said the new program of biannual indexation would help maintain the “real” value of the government's excise revenue. He said, “In the past, discretionary increases in these specific excise rates have not been sufficiently frequent or, in aggregate, large enough to counteract the eroding effects of inflation.” He added, “Real rates of excise have consequently tended to fall.” Keating also said, “Between 1973-74 and 1982-83, revenue from the traditional excises, measured in constant 1982-83 dollars, fell from $4.3 billion to $3.3 billion [...]” and, “These traditional excises will [now] rise gradually in line with inflation and as wages and other incomes themselves increase.”
That language says plenty. The state wanted its cut protected, and it got it.
What the Tax Does to Everyday Life
The article says Australians are currently enduring stubbornly high inflation, record-low productivity growth, real wage declines and deteriorating economic growth per person. It also says workers who rely on wage or salary income and who rent are trying to survive a period of record-low rental affordability. Those pressures don’t sit in separate boxes. They pile up on the same people, then show up again at the pub door when a beer costs too much to justify.
A graph circulating online shows beer prices in Australia have skyrocketed compared with other countries in recent decades. The article says some commentators blame the Albanese government for Australia's economic problems, including the price of beer, but argues the picture is more complex and that some issues have been decades in the making. That’s the usual trick of managed outrage: pin everything on the current officeholder and leave the machinery intact.
The brewing and alcohol industries have complained about the beer tax for years, as have members of the Opposition and the crossbench. Nationals MP Kevin Hogan said in 2024, “Just under half of what a mid-strength beer costs you is a tax and 60 per cent of a full-strength beer is a tax.” Politicians sometimes forget about the regular system of indexation and accuse the government of sneakily raising beer taxes, only to be reminded that it happens twice a year automatically.
What They're Calling Reform
The article proposes a thought experiment: abolish the excise on beer for five years and see what happens to Australia's pub culture and night-time economy. It asks whether pubs and live music would thrive, and whether the cultural and economic benefits of such an experiment would outweigh the government's lost excise revenue.
That’s the whole fight in miniature. On one side, a revenue stream protected by automatic indexation and defended in the language of fiscal responsibility. On the other, a night-time culture, live music venues, and ordinary people deciding whether they can afford to gather at all.
Regular CPI indexation also applies to local council rates, toll roads, water access charges, education fees and subsidised medicines, helping push inflation higher in a feedback loop. The article ends by asking whether it would be worth experimenting with abolishing the beer excise for a few years to see what benefits it would bring to Australian society, and whether continuing six-monthly increases would leave no pubs left.
The question hangs there like a warning. The system keeps indexing, the costs keep rising, and the places where people meet, drink, and make culture keep getting priced out of existence.