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WET Rebate reform delayed

The Wine Equalisation Tax (WET) Rebate will not be changed through the 2015–16 Federal Budget reform will remain on the agenda according to Josh Frydenberg, the Assistant Treasurer.

Eligibility for New Zealand wine producers will remain, while bulk and unbranded wine will not be phased out through the budget process, despite calls from the Winemaker’s Federation of Australia (WFA) to adjust both these areas.

Instead, the Treasury will prepare a discussion paper on the operation of the WET Rebate to help inform consideration of the issue as part of the Tax White Paper process. This news was delivered to a “specially convened industry roundtable held with the Assistant Treasurer” on Monday in Canberra.

It is unclear where this leaves the Winemaker’s Federation of Australia (WFA) push for increased marketing funds for the Australian Grape and Wine Authority (AGWA), which it said could be offset by WET Rebate roll-backs. Paul Evans, WFA chief executive, said constructive discussions with the government on WET rebate reform would continue. Evans maintains that reform is required to ensure the rebate continues to support regional wine businesses and communities.

“While there will be industry disappointment that our WET Rebate reforms will not be part of next week’s budget, we have highlighted a compelling case for structural reform and government is listening,” said Paul Evans, WFA chief executive.

The WFA proposal for WET Rebate reform and additional AGWA funding was backed by Wine Grape Growers Australia, Wines of Western Australia, South Australian Wine Industry Association, Wine Tasmania, Wine Victoria, the New South Wales Wine Association and Queensland Wine Industry Association, as well as wine regions including Riverland, Riverina and Murray Valley. 

“Together we are saying we need government’s urgent help to seize the market opportunity and to help re-engage global wine buyers,” Evans said.

Monday’s industry delegation to Canberra received an excellent hearing, according to Evans, but he declined to reveal which industry representatives were involved. The Assistant Treasurer has now publicly acknowledged industry concerns about the current operation of the WET Rebate meeting the original policy intent.

“The Government appreciates the strong interest in reform in this area and will look to bring forward options for consideration before the conclusion of the Tax White Paper process,” the Assistant Treasurer’s office explained in a media release. The discussion paper will be released in July.

The WET Rebate was introduced in October 2004 to replace the cellar door rebate scheme. It provides small and medium sized wine producers with a rebate of WET payable up to a maximum of $500,000 a year.

Evans and the WFA will now refocus lobby efforts through the Tax White Paper process.

“In these processes you can never be certain of what the result may be. But I expect the majority view of the industry should prevail,” Evans said.

Tony Pasin, Federal Member for Barker (whose South Australian electorate includes the entire Limestone Coast and Lower Murray as well as most of the Barossa) said “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”.

Pasin said he was pleased these “proposed reforms are now under active and close consideration by the Treasurer and Assistant Treasurer” and consideration through the Tax White Paper process has been fast-tracked “to ensure the Government’s policy approach to the WET rebate is set well in advance of the next vintage”.

AB Mauri



WID 2017