Wine Taxation Changes Will ‘Hit WA Hard’

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Sixty to 70 Western Australian wine producers will be “worse off” after the Federal Government decided to reduce the WET rebate cap back to its original level of $290,000 by July 2018.

“We do not and did not support this,” said Redmond Sweeny, president of Wines of Western Australia (WoWA).

“A discussion about a fairer and simpler taxation mechanism is now required. Preliminary estimates indicate WA will be disproportionately affected by this measure, with 60 to 70 producers now worse off.

“We will be providing further economic data to the Government in due course to support our position that the cap should remain at $500,000. We request that the government should remain open-minded to our position on delivering the full $500,000 rebate to small winemakers in regional areas as we transition from the mining boom.

“When we couple this with the legal inability to solve the rebate going to New Zealand, our continued dialogue with government will examine this issue of equality. With the full rebate in place, WA’s fine wine producers will contribute significantly to the government’s national economic plan.”

WoWA has welcomed the introduction of WET rebate integrity measures that “reflect our core principles for WET reform”.

“We believe the new measures will address market distortions surrounding the rebate,” Mr Sweeny said.

“We note also that the Government has listened to WoWA by allocating a portion of the $50 million marketing recovery plan to regionally-based wine tourism activities. We look forward to continued dialogue on this allocation.”

Mr Sweeny reinforces WoWA’s support for the new measures, including:

  • Maintaining the rebate under WET legislation and not a burdensome grants scheme.
  • $50 million over 4 years to support growing export demand for Australian wine and promoting regional wine tourism. Wines of WA advocated strongly for a portion of 
these funds to be delivered directly to regional marketing and are pleased to see this included in the budget;
  • Introduction of stronger anti-avoidance provisions to remove access to the rebate 
from contrived arrangements; and
  • Tightening the eligibility criteria in line with the rebate’s original intent to support small regionally based winemakers with branded product who have made significant, ongoing investments in regional Australia and removing the rebate for bulk and unbranded wine.

”The WA wine industry looks forward to further consultation on the finer details of eligibility criteria for small producers,” Mr Sweeny said.

“We are encouraged that this process will occur to ensure genuine small wine producer participants who are delivering ongoing investment and jobs in regional Australia are not excluded. It is imperative that this consultative process is completed as soon as is practicable to provide investment certainty for industry.”

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