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Calculating the costs and revenues of the alcohol licensing system [PDF, 334 KB]
Worksheet - Inspector staff and DLC member costs [XLSX, 33 KB]
The Sale and Supply of Alcohol Act 2012 aims to ensure licensing costs are met by the alcohol industry rather than ratepayers who subsidised about 50%, or $5.4 million a year, of the licensing system under the previous Sale of Liquor Act 1989.
Fee levels now help councils carry out functions under the Act such as a more thorough licence application process and better monitoring of licensees for compliance.
Also, under the previous Act, all licensees paid the same fees, regardless of the hours they trade, whether they had previously broken licensing laws, and despite the fact that some types of premises created more regulatory costs than others – such as the costs to local authorities to process applications, inspect licensees and take enforcement action.
There are now 5 fee categories that reflect the different levels of licensing costs and risks in the alcohol industry. Low risk outlets with low licensing administration costs (such as winery cellar door sales and small clubs) pay lower fees. Higher risk outlets that typically create higher costs (such as bottle stores, nightclubs and taverns) pay more.
The fees are set by the Sale and Supply of Alcohol (Fees) Regulations 2013 (external link)and the Sale and Supply of Alcohol (Fee-setting Bylaws) Order 2013(external link)
Alcohol licensing fees help councils carry out functions such as managing licence applications and monitoring licensees for compliance.
There are 5 fee categories that reflect the different levels of licensing costs and risks in the alcohol industry. Low risk outlets with low licensing administration costs (such as winery cellar door sales and small clubs) pay lower fees. Higher risk outlets that typically create higher costs (such as bottle stores, nightclubs and taverns) pay more.
The fees are set by the Sales and Supply of Alcohol (Fees) Regulations 2013(external link) and the Sale and Supply of Alcohol (Fee-setting Bylaws) Order 2013(external link)
In 2017 we reviewed the fees regulations:
Default fees apply to on, off and club licences. The default fees consist of:
The amount that businesses pay depends on the 'cost/risk rating' of each premises.
Territorial authorities can change the default fees by making their own bylaws. However, they can't change the way cost/risk ratings are calculated for each premises.
Premises' cost/risk rating is determined by a combination of factors.
Table 1 shows how premises' cost/risk rating are determined. For example, a bottle store (scores 15) closing at 11pm (scores 3) with two enforcements in the last 18 months (scores 20) would have an overall cost/risk rating of 38.
| Licence type | Type of premises | Weighting |
|---|---|---|
| On-licence | Class 1 restaurant, night club, tavern, adult premises | 15 |
| Class 2 restaurant, hotel, function centre | 10 | |
| Class 3 restaurant, other | 5 | |
| BYO restaurant, theatres, cinemas, winery cellar doors | 2 | |
| Off-licence | Supermarket, grocery store, bottle store | 15 |
| Hotel, tavern | 10 | |
| Class 1, 2 or 3 club, remote sale premises, other | 5 | |
| Winery cellar doors | 2 | |
| Club licence | Class 1 club | 10 |
| Class 2 club | 5 | |
| Class 3 club | 2 | |
| + | ||
| Licence type | Latest trading hour allowed by licence | Weighting |
| On-licence or club licence | 2:00am or earlier | 0 |
| Between 2:01am and 3:00am | 3 | |
| Any time after 3:00am | 5 | |
| Off-licence (excl. remote sales premises) | 10:00pm or earlier | 0 |
| Any time after 10:00pm | 3 | |
| Remote sales premises | Not applicable | 0 |
| + | ||
| Licence type | Number of enforcement holdings in last 18 months | Weighting |
| All licence types | None | 0 |
| 1 | 10 | |
| 2 or more | 20 | |
Class 1 restaurants – restaurants with a significant separate bar area which, in the opinion of the relevant TA, operate that bar at least 1 night a week in the nature of a tavern, such as serving alcohol without meals to tables situated in the bar area.
Class 2 restaurants – restaurants that have a separate bar (which may include a small bar area) but which, in the opinion of the relevant TA, do not operate that area in the nature of tavern at any time.
Class 3 restaurants – restaurants that only serve alcohol to the table and do not have a separate bar area.
Class 1 clubs – clubs which, in the opinion of the TA, are large clubs (with 1,000 or more members of purchase age) and which, in the opinion of the relevant TA, operate in the nature of a tavern (for example a large working men's club, combined clubs, or large 'cossie' clubs).
Class 2 clubs – clubs which do not fit class 1 or class 3 definitions (for example larger sports clubs, medium sized RSAs, many provincial social clubs).
Class 3 clubs - clubs which, in the opinion of the TA, are small clubs (with fewer than 250 members of purchase age) and which operate a bar for 40 hours or less per week (for example small sports clubs like bowling clubs, golf clubs, bridge clubs, and small RSAs).
Enforcement – has the same meaning as a “Holding” under section 288 of the Act, or a previous offence for which a holding may have been issued if the offence had occurred before 18 December 2013.
The licensing system has 5 fee categories, which reflect the range of cost/risk ratings.
Table 2 shows the 5 fee categories and the corresponding cost/risk ratings.
Low risk outlets with low licensing administration costs (such as winery cellar door sales and small clubs) will pay lower fees. Higher risk outlets that typically create higher costs (such as bottle stores, nightclubs and taverns) will pay more.
For example, the bottle store described above would have a fee category of 'very high cost/risk'.
Table 2: Fees category
| Total rating | Fee category |
|---|---|
| 0-2 | Very low |
| 3-5 | Low |
| 6-15 | Medium |
| 16-25 | High |
| 26 plus | Very high |
Territorial authorities can reduce the fee category of an applicant by one level (for example, from high to medium) where it considers this appropriate in the circumstances.
Reductions cannot be made below the lowest category. TAs will need to decide under what circumstances, if any, they would reduce the fee category of a licensee. For example a reduction may be appropriate to:
A premises' fee category determines the application and annual fees that the licensee has to pay.
Licensees pay the amounts specified in Table 3 depending on their fee category.
Note that all fee amounts are exclusive of GST.
Table 3: Fee amounts
| Cost/risk fee category | Application fee * | Annual fee | ||
|---|---|---|---|---|
| Total amount payable by applicant | Amount of total fee transferred to ARLA by relevant TA | Total amount payable by licensee | Amount of total fee transferred to ARLA by relevant TA | |
| Very low | $320 | $15 | $140 | $15 |
| Low | $530 | $30 | $340 | $30 |
| Medium | $710 | $45 | $550 | $45 |
| High | $890 | $75 | $900 | $75 |
| Very high | $1,050 | $150 | $1,250 | $150 |
* applies to applications for new licences, renewals of licences and variations to licences (including a redefinition of licensed premises)
Councils can alter the actual fee amounts (i.e. the fee paid by applicants and licensees) via a bylaw. Territorial authorities must consult stakeholders before passing such a bylaw.
Territorial authorities cannot alter the amount that must be paid to ARLA and they cannot alter the framework for determining cost/risk ratings and fees categories.
Special licences can cover one-off or short duration events, but can also cover large events such as wine and food festivals.
Default alcohol licensing fees for special licences are set via a national three-tier framework. The default fees for special licences are:
A ‘large size’ event is an event that the territorial authority believes (on reasonable grounds) will have more than 400 attendees.
A ‘medium size’ event is an event that the territorial authority believes (on reasonable grounds) will have between 100 and 400 attendees.
A ‘small size’ event is an event that the territorial authority believes (on reasonable grounds) will have less than 100 attendees.
The flexibility for TAs to adjust a fee category (outlined above) also applies to special licences. For example, a TA could decide to charge a special licence applicant the fee for a small sized event, instead of the fee for a medium sized event, if it decided that was appropriate in the circumstances.
Territorial authorities can set their own fees framework for special licences through a bylaw. For example, a TA could choose to set special licence fees at a set rate of $100 regardless of event size.
All applications must be accompanied by the relevant fee.
Territorial authorities will make a determination of the application fee based on the information provided by the applicant and any other relevant information available to the TA at the time.
If the fee category of an applicant changes due to further information becoming available during the process of considering the application, then the fee will be adjusted accordingly.
Where a DLC decides to issue a new licence then the relevant annual fee must be paid by the applicant before the licence is issued. The date of issue becomes the due date for all annual fees payable by the applicant.
For annual fees, the fee category is determined as at the day the annual fee is due. This is important, as the annual fee could change throughout the year, particularly where the licensee has had a compliance issue that has been affecting their fees category over the past 18 months.
There are a range of other fees - these fees are set out in Table 4 below.
Note that all fee amounts are exclusive of GST.
Table 4: Fees payable for other applications
| Application type | Total amount payable | Amount of total fee transferred/paid to ARLA |
|---|---|---|
| Manager's certificate application | $275 | $25 |
| Temporary authority | $258 | n/a |
| Temporary licence | $258 | n/a |
| Appeal to ARLA | $450 | n/a (paid directly to ARLA) |
| Extract of register (ARLA or DLC) | $50 | $50 of an extract is sought from the ARLA register |
| Permanent Club Charter (annual fee due on 30 June of each year and paid to ARLA) | $550 | n/a |
The new fees system starts on the day the Act comes into full force on 18 December 2013. However, TAs can choose to delay the collection of an annual fee until 1 July 2014 should they wish.
Existing licensees must pay annual fees on the anniversary of the date of 'issue', renewal, or variation of their last application (for a new licence, renewal of a licence or variation to a licence, as applicable). This date becomes the date for all future annual fees payable.
As a transitional measure, where an existing licensee made an application between 18 December 2012 and 17 December 2013, the licensee will not have to pay the relevant annual fee until the first anniversary after 17 December 2014.
Territorial authorities are required to collect and publish reports of their fees income and expenditure on licensing activities annually from the financial year commencing 1 July 2014.
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