Budget proposals could hinder growth in Tasmanian wine sector

SCRATCH BENEATH THE SURFACE: A support package and grants for the wine industry outlined in the 2017/18 budget could hurt Tasmanian producers. Picture: Brodie Weeding
SCRATCH BENEATH THE SURFACE: A support package and grants for the wine industry outlined in the 2017/18 budget could hurt Tasmanian producers. Picture: Brodie Weeding

At first glance the federal government’s budget announcements regarding grants to promote Australian wine domestically and internationally sound positive, but Wine Tasmania chief executive Sheralee Davies warns the funding could actually hurt the industry.

The 2017/18 federal budget included a $50 million export and regional wine support package and a $10 million annual grant for wine tourism and cellar doors.

“There are a few different things happening at the same time, but all came from the proposal to change wine tax in the May 2016 budget,” Ms Davies said.

Wine Tasmania has made submissions to the federal government around each of these proposals and they are still at consultation stage.

In May 2016 the government announced its Export and Regional Wine Support Package, outlining a reduction in the wine tax rebate that will affect several small Tasmanian wine producers.

Additionally, as Tasmania’s wines sit within the top 10 per cent of Australia’s highest value wines, the rebate reduction will bite twice because it will affect small producers disproportionately.

This will impact growth within Tasmania’s wine industry at a time when the sector is growing strongly, Ms Davies said.

“These businesses are building brands, growing their investment in regional communities and represent the majority of employment in the Tasmanian wine sector, and are effectively being penalised for being successful, despite the fact they are the very businesses the rebate was designed to support,” she said.

“Whilst the Export and Regional Wine Support Package is welcomed, Wine Tasmania's focus is therefore on providing input to ensure this support is directed to those businesses negatively impacted through taxation changes,” she said.

The Wine Tourism & Cellar Door Grants Program is also under consultation, and Ms Davies points to the proposed $10 million cap on grants as a potential problem.

“Wine Tasmania believes has been set too low, meaning is it likely to be oversubscribed on introduction and, thereby, result in a further net tax increase on wine businesses,” Ms Davies said.

“We are actively engaged in discussions on both programs, as well as proposed changes to wine taxation, and will continue to represent the interests of Tasmanian wine producers,” she said.

Wine Tasmania’s submissions include developing an overarching marketing strategy and differentiated brand platform and requesting support for activities to grow and progress the Tasmanian wine sector.