The Wine Equalisation Tax (WET) Rebate has become a very hot potato in recent months. The Rebate’s original purpose was to assist small/medium winemakers to stay in business thereby encouraging diversity in wine styles and helping to generate employment in regional communities, primarily through tourism through increased cellar doors.
Its purpose was not to reward New Zealand producers who export wine to Australia or foreign entities that trade from Australian stock nor was it intended to apply to bulk wine transactions. The WET was first introduced as part of negotiations to get GST through the Senate in July 2000. It provided for a rebate on tax paid of up to $300K on cellar door and mail order sales. Since then the rebate has been expanded several times including to New Zealand producers who export to Australia! The threshold has also been raised to $500K.
There has been much debate among the industry peak bodies as to whether the rebate is good or bad for the industry. Riverland Wine is presently developing a position paper to be clear about what this region’s growers and winemakers think and what form any reform should take.
Member for Barker, in eastern South Australia, Tony Pasin has entered the debate saying the rebate is more like a subsidy, and scrapping it would save the Government millions of dollars, as well as helping Australian winemakers.
He said recently, under the current system, some New Zealand winemakers selling wine in Australia are eligible for a rebate on the Wine Equalization Tax. He says this is hurting the local industry, especially in warm inland regions like the Riverland in South Australia, Sunraysia in north-west Victoria and the Riverina in NSW. “The subsidy is inherently unfair, it’s akin to playing the All Blacks or the Silver Ferns with one hand tied behind our backs. “We wouldn’t put up with it on the sporting field, and we shouldn’t have to put up with it in business.”