The Wine Equalisation Tax Rebate is a case study in rookie Treasurer Scott Morrison’s economic and budget mismanagement.
The rebate was introduced in 2004 and currently provides up to $500,000 in tax relief to producers of wine. The intent of the policy was to benefit small wine producers in rural and regional Australia.
The intent of the policy is not being met and there is consensus from the Government, the Opposition and the industry itself on the need for change.
The rebate has led to over production, damaged Australia’s reputation for high quality wines and is plagued by rorting. ‘Virtual winemakers’ and complex contractual arrangements have been setup – and in some cases the rebate is being accessed many times over.
All this at a cost to the Budget of hundreds of millions of dollars per year.
So why hasn’t there been change?
The industry is talking of the Government’s work on the reform going “off the rails”.
The tax treatment of wine was raised in the Tax Discussion Paper in March, there was a WET reform discussion paper released in August, a consultative group in October, and reports suggest that a Final Report has been sitting with Treasury for some time now.
The industry is on board for reform, but it needs certainty. Certainty is one of the most important things a Government can provide to foster a strong economic environment, and rookie Treasurer Scott Morrison is not providing it for this important industry that contributes $5.5 billion to the nation’s economy.
The Government’s own Discussion Paper put forward a number of reform options. It proposed that the rebate could be abolished, replaced with a grant scheme, changed to improve its integrity or limited in its coverage.
Industry is backing reform and Labor awaits the Government’s response.
With vintage 2016 just weeks away time is running out.
If the Government is able to come up with a sensible reform package Labor will be open to supporting it.
There are no roadblocks on this side of politics for a range of sensible Budget reforms, just the need for a Government to stop talking and start governing and provide the ‘economic leadership’ that we have been promised.
THURSDAY, 17 DECEMBER 2015
JOINT MEDIA RELEASE
THE HON CHRIS BOWEN MP
MEMBER FOR MCMAHON
THE HON JOEL FITZGIBBON MP
SHADOW MINISTER FOR AGRICULTURE, FISHERIES AND FORESTRY
SHADOW MINISTER FOR RURAL AFFAIRS
SPOKESPERSON FOR COUNTRY CAUCUS
MEMBER FOR HUNTER