Wine tax

WET a bur­den on lo­cal pro­duc­ers

Augusta Margaret River Times - - Front Page - Keith and Clare Mug­ford, own­ers of Moss Wood win­ery in Mar­garet River.

Mar­garet River pre­mium wine pro­duc­ers claim the Fed­eral Gov­ern­ment is run­ning a tax on qual­ity which is putting an un­fair bur­den on the re­gion.

The wine­mak­ers say the wine equal­i­sa­tion tax (WET), which is charged at a rate of 29 per cent on top of the GST, puts a greater im­post on pre­mium wines than on cheaper va­ri­eties.

While the rate does not vary by area, the wine­mak­ers claim their re­gion is pay­ing a dis­pro­por­tion­ate amount be­cause they make about 20 per cent of the na­tion’s pre­mium wines.

Moss Wood win­ery own­ers Keith and Clare Mug­ford are among the wine pro­duc­ers call­ing for an over­haul of the tax; want­ing it based on vol­ume, in­stead of value.

“The WET is a frus­trat­ing is­sue for us,” Mr Mug­ford said.

“The Rudd gov­ern­ment, de­spite the Henry tax re­view pre­sent­ing a clear and con­cise anal­y­sis rec­om­mend­ing vol­u­met­ric tax­a­tion, chose to re­tain the present sys­tem and we re­main stuck with it.

“Wine is taxed by value rather than vol­ume and this es­sen­tially turns it into a tax on qual­ity.”

WA Agri­cul­ture Min­is­ter Alan­nah MacTier­nan said she sup­ported the pre­mium wine pro­duc­ers, claim­ing the cur­rent sys­tem was more ben­e­fi­cial for Eastern States pro­duc­ers of bulk wine.

Ms MacTier­nan said the tax was ini­tially in­tended as a vol­u­met­ric tax but in 2000 the Howard gov­ern­ment buck­led un­der po­lit­i­cal pres­sure from bulk wine pro­duc­ers in the east to base it on value in­stead.

She said there had not yet been any fi­nan­cial anal­y­sis on how a change to a vol­u­met­ric tax would af­fect WA’s smaller pro­duc­ers, but she said there was scope to pro­tect their liveli­hoods by ex­empt­ing some bou­tique winer­ies from the WET, or through a re­bate sys­tem.

Ms MacTier­nan said the tax in its cur­rent form was a “very bad so­cial pol­icy”.

“It’s mak­ing that cheap end of wine in­cred­i­bly cheap,” she said.

Mar­garet River Wine As­so­ci­a­tion chair­man Barry House said the ex­ist­ing WET regime was “def­i­nitely detri­men­tal” to qual­ity Mar­garet River pro­duc­ers and ex­porters.

“There is no doubt in my mind that we should move to­wards a fairer, vol­ume-based sys­tem which pro­motes ex­cel­lence not medi­ocrity,” he said.

Aus­tralian wine was al­ready over-taxed com­pared to over­seas wines and Mr House said WET re­bates were seen as a “bandaid” so­lu­tion and mostly re­turned some of the money pro­duc­ers al­ready paid in tax.

“We are work­ing with Wines of WA to de­velop a long-term, fair, and just vol­ume-based tax­a­tion model which will be ac­cept­able to the Mar­garet River, WA and na­tional wine in­dus­try,” he said.

How­ever, Mar­garet River vint­ners have an up­hill bat­tle ahead of them, with Fed­eral Trea­surer Josh Fry­den­berg say­ing yes­ter­day the Fed­eral Gov­ern­ment had no plans to change the WET, say­ing the Gov­ern­ment was work­ing on tax mea­sures to ben­e­fit all small busi­ness.

Pic­ture: Nic El­lis

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