A WA wine industry proposal to exempt producers’ first 1 million litres from the wine equalisation tax has been adopted at a national level as the producers prepare to use their electoral clout to wind back GST-driven exise increases.
The industry has long been angered by the introduction of the 29 per cent WET which was designed to replace a 41 per cent wholsesale tax when the GST came into force.
The industry claims this amounts to a 12 per cent tax rise, rather than any form of equalisation.
But differences between the national body and some states, particularly WA, led to infighting rather than a concerted effort to fight the tax.
But now compromise has been reached, as the various industry bodies have found a united approach just when the Federal Government is looking vulnerable.
The WA Wine Industry Assoc-iation position on the exemption has been adopted – a move that would mean all but two WA producers would become WET exempt – while the WA organisation has dropped its call for a volumetric tax.
The unified position is for the 1 million litre exemption plus a reduction of WET to 24.5 per cent on production over that The wine industry has also set itself the task of having the WET removed altogether.
WAWIA chief executive officer Tamara Stevens said the industry was now well placed to lobby for tax changes ahead of a Federal election.
“For the first time since WET was introduced the entire national wine industry, including the peak group and each state organisation, has come together and agreed on an exemption,” Ms Stevens said.
Winemakers Federation of Australia chief executive Ian Sutton said individual politicians would be left in no doubt that they could not hide behind party politics.
Mr Sutton said the tax policy had affected the ability of some winemakers to adequately mature red wine and the WET had stripped back margins for smaller producers, threatening their livelihood.
He said wine’s influence on the rural vote was a key.
A number of key Federal Liberal seats are thought to have been targeted, with South Australians particularly in the firing line given the industry’s muscle in that State. House of Representatives speaker Neil Anderson and Foreign Minister Alexander Downer as well as Federal Senators Nick Minchin, Amanda Vanstone and Robert Hill are among the high-profile politicians on the industry list.
“I have not seen the industry close ranks or be as strongly united on anything as it is on this tax,” Mr Sutton said.
