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Potential for flexibility in the proposed wind back of the wine equalisation tax (WET) has left Tasmanian wine producers sighing in relief after positive discussions with the federal government.
Federal Assistant Agriculture Minister Anne Ruston met with producers and industry representatives in Hobart on Wednesday to discuss the potential roll-back of the tax that was announced in the 2016-17 budget.
“We weren’t sure whether there was going to be any flexibility on what had been proposed but it appears that there may be,” Ms Davies said.
While there were no commitments made Ms Davies said there were two options discussed at the consultation.
The first option was to delay any changes to the rebate cap until 2018-19 and conduct a full review of the impact the wind-back of the tax would have.
The second option is to keep the rebate at its current level but half the money would only be distributed if it was invested into cellar door and direct sales opportunities.
About 18 producers attended the face-to-face consultations and Wine Tasmania chief executive Sheralee Davies said while no commitment was made the discussions were positive.
“The proposed rebate obviously caused us significant concern after the budget but we hadn’t had the chance to meet with the federal government on this issue since June,” Ms Davies said.
The wind-back of the WET was announced in the budget in June and proposed to downgrade the rebate cap from $500,000 to $290,000 over two years.
Wine is taxed on its value, the higher the value of the wine, the higher the tax is paid. The WET rebate assists higher quality but low volume producers to compete on price against larger volume producers.
Ms Davies said there was still some work to do before a resolution on the issue would be found but it was heartening to know the federal government was willing to listen to producers and industry representatives on the issue.
Tasmanian Senator Jonothan Duniam said the consultation session was a great opportunity for the local wine industry to have their say on such an important issue for the sector.
“The Tasmanian wine industry is dominated by small regional producers and with our higher cost of production and smaller scale any change in the WET rebate could adversely impact on our growing industry, which is gaining a national and international reputation for premium quality, high value wines,” he said.
“Now that the Tasmanian wine industry has had the opportunity to have their say I will work with Senator Ruston and local producers to ensure that Tasmania can extract the best value from the rebate into the future.”
Senator Duniam said he had been working with state Primary Industries Minister Jeremy Rockliff on the issue and was looking forward to working with Minister Ruston on the proposed reform.