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Readers Response

CONGRATULATIONS on your expansion success. Winemakers Federation of Australia (WFA) chief executive Ian Sutton has all he needs in proximity and influence with Federal Cabinet through Alexander Downer and senators Hill, Minchin and Vanstone. You heard Prime Minister Howard confirm that with me on February 23 2000.

Price based Wine Equalisation Tax (WET) is a South Australian fait accompli because the biggest financial underwriters of WFA are the huge cask wine firms, and almost two-thirds of table wine consumed in Australia is cask wine.

A total of 85 per cent of table wine produced by BRL Hardy for consumption in Australia is cask wine. And cask wine, selling at the same price per litre as bottled water or lemonade, pays WET at 29 per cent of SFA, which is why it is central to the worst alcohol abuse in Australia.

As for the hair-brained scheme to exempt the first million litres of every winemaking company, or label, or wine style, or packaging type, or whatever, driven by WA says Sutton (that is, by Denis Horgan) WFA would have surreptitiously killed that off any possible government agenda two years ago with a derogatory whisper in Mr Downer’s ear.

Apart from which, the Prime Minister was unequivocal on Liam “Look Denis, we can’t. Look, everybody wants their own exemption. I mean let’s call a spade a spade … we have already provided in relation to cellar door sales quite a generous exemption. You say it’s not enough,” he said on ABC radio.

The government largesse sought by Denis Horgan is astronomical and fiscally ridiculous. In all, 25 per cent of the total of 1200 Australian wine producers produce more than 1 million litres and the remaining 75 per cent are small family tourist wine producers averaging about 50,000 litres.

This is about 350 million litres, which is pretty much the total of yearly Australian wine consumption from which the $630 million in WET was drawn in 2001-02.

WFA’s ‘tongue in cheek’ promise to Mr Horgan was: “We’ll support the WA wine industry’s (unobtainable additional exemption) so long as they don’t openly support or promote a volumetric style of taxation”; that is, a WET on volume of alcohol (LAL) currently revenue neutral with $630 million at $15 LAL or $1.40 per bottle, instead of 29 per cent of price.

Mr Horgan’s position and that of those who make up the majority of the members of the WA wine industry was against common sense and social responsibility. In a letter dated August 3, 1999 Mr Horgan stated: “The motion at next Friday’s meeting (of the WA Wine Industry to ratify a volumetric WET as per the recommendation of the Federal Government’s Wine Industry Inquiry and the all-party support of the WA Parliament) seeks to lock your executive into a position which serves … the health lobby vendetta against cask wine, the major producers, and the WFA.”

Mr Sutton and Mr Horgan have got principles, Frank, and if you don’t like them they’ve got more principles.

Bruce Tomlinson

Lenton Brae Wines

Margaret River

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