Handy $50 mil­lion in­jected into wine in­dus­try growth and re­cov­ery plan

North East & Goulburn Murray Farmer - - NEWS -

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.”

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