December 2, 2016
The Federal Government will not proceed with potentially devastating cuts to the Wine Equalisation Tax (WET) rebate scheme announced in this year’s Budget.
Instead, it will introduce a range of changes suggested by wine producers to reduce distortions in the market while preserving the rebate’s original purpose.
The changes will lower the WET rebate cap from $500,000 to $350,000 effective from July 1, 2018; tighten eligibility requirements; and introduce a new Wine Tourism and Cellar Door grant of up to $100,000 a year to encourage more wine tourism.
The Government will also invest $50 million to promote Australian wine internationally and domestically.
The reforms were announced by the Federal Government on Friday morning, and come on the back of extensive consultation with the Australian wine industry.
“This is a good news story for wine producers and wine regions,” Minister for Revenue and Financial Services Kelly O’Dwyer said.
“We have listened carefully to industry and tailored the package so wine producers who build brands, invest in regional communities and create local jobs are the beneficiaries of the rebate, and not the traders and major retailers.”
The final WET Rebate reforms will be introduced into Parliament next year.
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The Queensland Wine Industry Association (QWIA), which has been actively involved in the consultation process with the Government ever since changes to the WET rebate were first suggested, said it welcomed the news.
“Today’s announcement by the Federal Government will put an end to the uncertainty surrounding the reforms,” QWIA President Nicholas Pesudovs said.
Mr Pesudovs, who is the chief winemaker at Dusty Hill Estate in Moffatdale, said QWIA was pleased the Government had reconsidered its initial decision to reduce the WET rebate cap from $500,000 to $290,000.
“Instead the cap will reduce to $350,000. And importantly, the Government announced a deferral of the rebate reduction until July 1, 2018, which will allow affected Queensland producers time to adjust.
“This rebate is critical in supporting jobs throughout rural and regional communities, as well as future investment and growth in our industry.”
Mr Pesudovs said QWIA agreed there had been a need to return integrity to the WET rebate, and during the consultation process had worked hard to tighten the eligibility definitions which were struggling to deliver what was initially intended.
“These revised eligibility criteria strengthen the industry by recognising alternative business models, including emerging wine producers, and promote investment at the local level,” he said.
“In addition, the Government announced a $100,000 grant scheme which focusses investment in cellar doors. This scheme will be a strong contributor to regional growth and is a welcome and positive outcome for small and medium wine producers, who are the backbone of the Queensland wine industry.
“Overall, the $350,000 rebate cap, tightened eligibility and the $100,000 grant scheme are significantly better outcomes than what was proposed in the 2016 Federal Budget and QWIA looks forward to working on the future of our industry.”
The WET imposes a 29 per cent tax on wine products, separate to the GST.
The capped rebate is used by the industry to reinvest in their businesses to create growth and jobs in rural and regional Queensland.
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