Smaller wineries fear loss of rebate
Geogia Loney of WST
Prices of WA wine will rise and wineries will go to the wall if the Federal Government removes a rebate which provides up to $500,000 a year in tax relief to wine producers, the industry warns.
The Government is understood to be scrutinising beer, wine and brandy taxes as it scours possible sources of revenue in the lead-up to the May Budget.
The WA Wine Industry is alarmed at any suggestion the rebate could be removed and said the tax system needed to treat wine differently to beer and spirits.
Industry president John Griffiths said about 85 per cent of Australian wineries would struggle to survive without the tax rebate, which offsets the wholesale tax.
"It’s fair enough to look at the cost of alcohol to the community, such as the alcopop initiative, but the reason wine is not taxed in the same way as spirits is because of a different dynamic," he said.
Mr Griffiths said the wine industry had closer links to agriculture and tourism than breweries and distilleries.
The rebate is targeted at small to medium producers, which make up the bulk of the Australian wine industry. It gives producers a rebate of 29 per cent of the wholesale value of domestic sales.
There are about 2300 wine producers in Australia with the majority considered small or medium sized, according to figures from the Australian Wine and Brandy Corporation. Willowbridge Estate owner Jeff Dewar produces about 45,000 cases of wine a year at his Ferguson Valley winery and said the removal of the rebate would have a huge effect. Prices would go up and sales would fall as a result. "It would be disastrous," he said.
The wine-equalisation tax rebate was introduced in 2004 and would cost the Government an estimated $1.13 billion in the next four years.
Prices of WA wine will rise and wineries will go to the wall if the Federal Government removes a rebate which provides up to $500,000 a year in tax relief to wine producers, the industry warns.
The Government is understood to be scrutinising beer, wine and brandy taxes as it scours possible sources of revenue in the lead-up to the May Budget.
The WA Wine Industry is alarmed at any suggestion the rebate could be removed and said the tax system needed to treat wine differently to beer and spirits.
Industry president John Griffiths said about 85 per cent of Australian wineries would struggle to survive without the tax rebate, which offsets the wholesale tax.
"It’s fair enough to look at the cost of alcohol to the community, such as the alcopop initiative, but the reason wine is not taxed in the same way as spirits is because of a different dynamic," he said.
Mr Griffiths said the wine industry had closer links to agriculture and tourism than breweries and distilleries.
The rebate is targeted at small to medium producers, which make up the bulk of the Australian wine industry. It gives producers a rebate of 29 per cent of the wholesale value of domestic sales.
There are about 2300 wine producers in Australia with the majority considered small or medium sized, according to figures from the Australian Wine and Brandy Corporation. Willowbridge Estate owner Jeff Dewar produces about 45,000 cases of wine a year at his Ferguson Valley winery and said the removal of the rebate would have a huge effect. Prices would go up and sales would fall as a result. "It would be disastrous," he said.
The wine-equalisation tax rebate was introduced in 2004 and would cost the Government an estimated $1.13 billion in the next four years.
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