Handy $50 million injected into wine industry growth and recovery plan
THE wine industry has received a major injection of funds as part of the Federal Government’s budget to grow demand and accelerate recovery of the nation’s grape and wine industry.
The investment of $50 million over forward estimates was welcomed by the Winemakers’ Federation of Australia and Wine Grape Growers Australia with the federation’s president Tony D’Aloisio “pleased” that the government listened and responded to the industry’s recovery strategy by making changes to the Wine Equalisation Tax (WET) rebate.
However, he also highlighted that just as important for the industry as the injection of funds was the need to tighten the WET rebate eligibility criteria.
“The industry sees removing the claims for bulk and unbranded wine as important drivers to industry’s restructure and we believe these changes need to happen now rather than later to assist in returning the industry to profitability,” Mr D’Aloisio said.
The Federal Government has not accepted that the rebate cap remain unchanged, proposing a progressive reduction of $350,000 and then $290,000 from July 1, 2019.
The Federation believes this reduction will have an economic impact of removing some $300 million over the forward estimates for businesses with significant investment in regional Australia and it does not believe it is clear how the proposed reduction in the cap will aid the industry in its recovery after years of declining profits.
“With a more favourable exchange-rate environment and the benefit of Free Trade Agreements with our major trading partners in Asia, the investment of $50 million over the forward estimates to grow markets could have a significant impact on demand,” Mr D’Aloisio said.
“However, significant questions remain over reducing the rebate cap and the delay in removing eligibility for bulk and unbranded wine.”