Riverland Wine joined with the Winemaker’s Federation, Local Member Tony Pasin, and Senators Ruston and Xenophon in welcoming Tuesday’s announcement by Assistant Treasurer Josh Frydenberg that the Government will ask Treasury to prepare a discussion paper on the operation of the Wine Equalisation Tax (WET) and to bring forward options for consideration before the conclusion of the Tax White Paper Process. The announcement followed an extraordinary meeting of WFA and Riverland representatives with the Assistant Treasurer, Tony Pasin and Nick Xenophon on Monday. Read the media release here
Government praised industry leaders for its unity over this troublesome issue and pledged to fast-track consideration of the reform proposals put by the Winemakers Federation on behalf of all industry after months of consultation and collaboration between industry stakeholders and government. Commenting on the outcome of Monday’s meeting, Riverland Wine Executive Officer Chris Byrne expressed gratitude to the industry partners and the key politicians who helped engineer this progress. He singled out Andrew Weeks, Riverland Wine Business Manager, for special mention. “Andrew has made a herculean contribution on behalf of all growers across the nation to simplify what is a very complex tax policy. His work has enabled all members to understand the unintended detriment of the current policy, particularly in export markets and to reach an informed position in support of the WFA proposal”.
The WET, at 29% of the last wholesale price, was brought in when GST was introduced. It replaced the wholesale sales tax but was found to be too punitive for small wineries especially those with cellar door operations in the premium growing regions. The rebate was introduced to offset that “unintended consequence”. Over the years it has been increased to $500,000 per annum and has played an important role in regional prosperity. More recently, because of what can only be described as “flaws” in the policy, Industry bodies at the regional, State and federal levels have united to propose reforms that will protect the interests of those for whom it was originally intended but also relieve some of the downward pressure especially in the export markets. The proposed changes will save the federal government as much as $280M over four years and provide a very moderate injection of $25M to aid Australian Wine exports.
Industry Statesman and Riverland stalwart John Angove recently commented, that in more than three decades of working as an industry advocate he has not witnessed such accord between winegrowers and winemakers as has been evident in recent months around the WET issue.
Of the Monday meeting, local federal Member Tony Pasin said “I have been delighted with the support I have received from my Coalition colleagues in advancing this reform package and acknowledge the support received from Senator Nick Xenophon, who joined me in Canberra. Reform in this area is clearly needed as this scheme has drifted from its original policy objective and is now damaging the industry by putting significant downward pressure on grape prices”
Riverland Wine remains confident that the promised “fast-tracking process” will occur soon and signal relief, well before the 2016 vintage.