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1/05/2015

WET Reform still on the table

The boss of the Winemaker’s Federation of Australia (WFA) has dismissed a media report that Wine Equalisation Tax (WET) reform will not be part of this year’s Federal Budget as “speculative”.

Yesterday, an article from The Australian suggested Joe Hockey, the Federal Treasurer, was “understood to have told the industry at a meeting on Tuesday that the plan was not supported, despite it delivering significant budget savings”.

Paul Evans, the Winemaker’s Federation of Australia chief executive, said he believes the government is listening to the wine industry on the topic of WET Rebate reforms.

“What I can say is our discussions and advocacy continues and I think we have a compelling case,” Evans said.

“Whether the media report is true or not, who knows. But the Government must be in ‘listening mode’ if both the Winemaker’s Federation and Wine Grape Growers Australia as well as all the key state-based organisations are calling for these changes.

“All will be announced on budget night, which is May 12.”

The reform suggestions tabled by the WFA (and supported by WGGA and the state bodies) have included plans to wind back WET Rebate eligibility for foreign and bulk wine producers.

The intent of the WFA proposal is to achieve savings that could be redirected to marketing funds to boost the promotion of Australian wine. Evans said the industry needs adequate resources to re-introduce the quality and diversity to wine buyers and consumers and shift demand to recover share and margin.

“We can offset this expenditure by making some limited reforms to the wine equalization tax (WET) rebate including the abolition of the separate and unfair New Zealand producers’ rebate and the phasing- out of the rebate on bulk and unbranded wine,” Evans said. “We have already been talking to Government, Members of Parliament and the Australian Tax Office about reforming the WET rebate to ensure it remains sustainable and continues to support regional Australia in the long term – areas of course we will detail in our tax submission.”

The WFA issued a ‘Federal Budget update’ just two days ago, with Tony D’Aloisio the WFA Board president re-stating the case being put forward.

“We believe that WET rebate eligibility should be phased out on bulk and unbranded wine and the unfair separate New Zealand WET rebate scheme should be abolished. There will be significant savings to the Government from making these limited reforms which will more than offset the $25m over four years that is required by the Australian Grape and Wine Authority (AGWA) to boost its promotional activities,” D’Aloisio said.

“There is clear majority industry support for these additional funds for AGWA’s important promotional work and the limited WET rebate changes WFA has proposed as evidenced by the backing from these representative organisations that cover every wine producing region across the country.

“We have also received significant support from a number of Members of Parliament and Senators who have electorates with wine interests. The discussions with relevant Ministers have been constructive and positive and we have also had the opportunity to talk directly with the Prime Minister on a couple of occasions about the merit of our reforms.

“Decisions on the Budget will be taken over the coming days and we remain confident that we have put a compelling and comprehensive case to Government to work with us to support the recovery of the sector and a return to profitability for wine businesses.”

Many wine industry observers will be keenly counting down to the May 12 Budget.

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