July 28, 2016
The Winemakers’ Federation of Australia will launch a national campaign to oppose reductions in Wine Equalisation Tax (WET) rebates announced in this year’s Federal Budget.
Last week the South Burnett Wine Industry Association warned that cuts to the rebate cap would be a disaster for local wine producers if they were allowed to go ahead.
WFA president Tony D’Aloisio said while the WFA agrees with the Federal Government’s proposals to tighten WET eligibility requirements and remove bulk and unbranded wines from the rebate scheme, it was opposed to any cuts in the rebate cap.
The government had announced it intended to cut the rebate cap from $500,000 to $350,000 on July 1, 2017, and then further reduce this to $290,000 from July 1, 2018.
“This will have significant adverse economic impacts on the industry and on regional economies,” Mr D’Aloisio said.
“The only reason for this proposal is to increase government revenue at the expense of legitimate wine businesses who contribute to regional economies.
“The regional economic cost of such a proposal is severe and far outweighs any revenue gains from the tax increase.”
The WET rebate scheme was introduced in 2004 to help prop up smaller winemakers operating in regional areas.
The government had announced reforms to the scheme to put an end to rorts that had seen some non-winemaking businesses able to claim WET rebates.
Last week, SBWIA president Jason Kinsella said while there were some positives in the suggested reforms, South Burnett producers would be disproportionately impacted by any lowering of the rebate cap.
“We are home to small to medium sized wineries, and these are the ones that will suffer most if the cap is lowered,” Mr Kinsella said.
“Most of our wineries depend on their current WET rebates to keep trading.
“As the reforms currently stand, they would have a devastating impact on our members.”
The WFA intends to lobby the government to drop the proposed rebate cuts, but said it is not opposed to other WET changes announced in the Budget.
- Related article: WET Reforms ‘Could Be A Disaster’
