Treasury Laws Amendment Bill – WET Rebate
BILLS – Treasury Laws Amendment Bill
Mr PASIN (Barker) (11:03): I too commend to the House the Treasury Laws Amendment (2017 Measures No. 4) Bill 2017, in particular schedule 1, which deals with the wine equalisation tax rebate, or the WET rebate as it is referred to in the industry. A number of people in this place seek to label me—some kindly, some less kindly; some graciously, some less generously—but the one title in this place I do revel in is ‘the member for wine’, not because I’m a great consumer but because my electorate produces more wine by value than the electorate of any other member in this place. Indeed, if that wasn’t claim enough to the title, I can tell you, Mr Deputy Speaker, that we also produce more wine by volume than the electorate of any other member in this place. In effect, I represent constituencies that span the great spectrum of the Australian wine industry: from Penfolds Grange, Henschke’s Hill of Grace, other iconic brands from the Barossa Valley, from Coonawarra, from some of the newer, burgeoning wine districts all the way through—and just as importantly—to the large-volume producers of some of Australia’s inland areas like the Riverland, which export large volumes of their product at a lower value.
When I was elected—and, indeed, in the lead-up to my first election in 2013—I was introduced to the concept of the wine equalisation tax. As a young lad who grew up in Mount Gambier on a horticulture, cattle and sheep property and who had ensconced himself in criminal law professionally—as an advocate; I make that clear—I had to be introduced to the concept of the wine equalisation rebate. It is a rebate that enables eligible producers to offset their wine equalisation tax rebate.
You might ask: what was so controversial about that in the lead to the 2013 election and beyond? Whilst the rebate was intended to support small wine producers, many of whom are in rural and regional Australia, during its operation a number of wine merchants—’wine tax traders’, I’d like to call them—were operating in a way that circumvented the intent of the legislation. What it meant, in practical terms, what it meant to the producers in my electorate, was that there was a downward influence on the price of their fruit. That is, there was downward pressure on the value of their fruit, and that was happening because certain individuals and entities were able to, effectively, game the system and use the rebate as a value shift from this place and from the public purse to processors. So the industry, through individual constituents, came to me, as they had come to others, and I indicated I would see what I could do to work on changing this.
We went through two treasurers, a number of assistant treasurers and two prime ministers on this journey, but I am pleased to say that the day has finally come—a long time since those early discussions in 2012 with an aspiring candidate, and all the way through to 2017—when these changes will become law. That’s not to overestimate my role. Ultimately, this has happened because industry came together. Industry decided that this rebate was harmful to their interests. I don’t think we should brush over this. Industry came to government and said: ‘You know that money you’re giving back to us? We’d like less of it, because it is harming the interests of the industry.’ That doesn’t occur often in this place. And there was another thing that doesn’t occur often in this place: industry came with a solution. Very often in this place we hear gripes from industry and from members of parliament, and it is very easy to identify the problems. It’s much more difficult to identify a solution. It’s even more difficult to have everyone—or, at least, a very significant majority of the industry—agree that that solution is, in fact, the solution that they would like to see legislated. So, to the industry today, I say: congratulations. Congratulations for your efforts, congratulations for your industry on this issue and congratulations for the work you have done to assist me and others in persuading the government to come to this resting point.
Ms McGowan: Hear, hear! Well said!
Mr PASIN: Thank you, Member for Indi. In particular, I want to thank someone who has left the industry and who, at one point, when we came across yet another roadblock and frustration, said to me, ‘Tony, I think I’m done’. Thankfully he wasn’t done and he continued to fight the fight—it was Paul Evans, formerly from the Winemakers’ Federation of Australia. This is a man who, time and time again, assisted me in pushing for this proposal.
So what will we see? What we will see is a re-establishment of the original integrity of the wine equalisation tax. It was always intended to support small wine producers, principally in rural and regional communities. By taking its operation away from bulk wine, by reducing the rebate slightly but allowing those who sell above the cap—or who would be eligible, otherwise, above the cap—a $100,000 cellar door grant, we’re effectively going back to where the original architects of this rebate intended us to be.
A number of changes are being made, all of which are important. There will be a $300 million saving, which the industry has said they will give back because they don’t believe it is serving the purposes of the industry. From that, $50 million will be provided to industry to grow the Australian wine brand. I have spoken on numerous occasions in this place, as indeed I think everyone in this House has, about the benefits of the trilogy of free trade agreements established in recent times. We have seen the great benefits of that in the wine industry. Export opportunities have grown exponentially, particularly to our Asian neighbours, China principal amongst those.
The history of Australian wine’s ability to sell the brand—that is, Brand Australia—to the rest of the world has not always been so glowing. Constituents of mine who visit wine fairs around the world often return with photographs and stories that are somewhat embarrassing. For example, at Vinitaly we see very small offerings of the presentation of the wine Australia brand compared to large international brands. This $50 million will assist the Australian wine industry in marketing itself to the rest of the world. In the middle of what was the really low point of the commodity price around wine, particularly in the warm regions, people were starting to approach me and say, ‘Tony, what we need is another vine pull.’ There needed to be an incentive to remove vines and the production. I said to them: ‘Please stop there. The reality is we need to sell more wine, not produce less wine. We need to sell to the rest of the world more of our fantastic product, not produce less of our fantastic product.’ That is, in fact, what we have done in recent years.
We have enjoyed fantastic tailwinds in this regard, with the movement of the Australian dollar and with demand out of North America. These things, coupled with the free trade agreements, have created the perfect climate for an international push for Australian wine. This $50 million contribution is perfectly timed over a number of years, with industry guiding where it’s applied. I say to industry: ‘Spend it wisely; it is a significant sum of money. It is $25 million more than you originally asked of government.’ Indeed, it was members of the government of the day: me, Senator Ruston in the other place—
Ms McGowan: Independents too!
Mr PASIN: I will include the member for Indi; I wasn’t aware of her advocacy on this, but I accept it was there—saying to industry, ‘Be more bullish about what you want out of us, because I think you’re to be rewarded for what you have done and the mature way in which you have gone about this debate.’ I do say to industry: ‘Please spend this money wisely. Make sure we and the industry get real value for money from this $50 million contribution.’
It is important that we acknowledge that the wine industry is a significant employer in my electorate. It’s a significant, indeed, almost foundational industry in South Australia, and it makes a significant contribution to our national economy. It is one of the great winners and one of the great success stories of Australian agriculture. I am very pleased to stand here commending this bill to the House, thanking Minister O’Dwyer, thanking the Treasurer and thanking everyone who has lent their support to this bill, including the opposition. But principal in that is a note to the industry saying: well done, you have set the standard for other industries to come to government, identify a problem, formulating a solution and, indeed, in some cases, realising that not all government largesse is good and that there was an example here of rorting. There were other examples that, whilst not amounting to rorting, fell outside the spirit of what was intended, and the industry wanted to clean it up. They wanted to clean it up because it was harming every single industry participant. I had farmers who just desperately wanted the WET rebate reformed. It has happened now. I congratulate the industry, senior members of the government and, indeed, everyone in this place. It’s a pretty good outcome.
