WFA Submission to WET Rebate Discussion Paper

Dear Members of Industry,

A submission to the Federal Government’s review of the WET rebate has now been lodged by industry’s two peak associations, the Winemakers’ Federation of Australia and Wine Grape Growers Australia. We are urging government to take action to work hand- in-glove with us and help lift the profitability of this important industry.

We have put to government that we need action before the 2016 vintage, including reforms to the rebate plus an extra $44 million for global marketing so wine businesses can take full advantage of the more favourable Australian dollar and recent FTAs.
 
This joint submission represents a strong display of unity from the sector and it includes letters of support from all state wine associations.
 
As you know, the industry plan has been developed through extensive consultation over the past two years and it is backed by detailed analysis, independent modelling and expert legal advice. It sets out what must be done to aid an uplift in profitability and prices for both winemakers and grape growers. There is industry acknowledgement that WET rebate reform is required for the benefit of the industry as a whole, while the importance of a boost to our global marketing efforts widely accepted.
 
The submission calls for government to:

  • Keep the WET rebate in line with the original policy intent of delivering long-term benefits to industry and tourism in regional Australia;
  • Stop the rebate going to unintended recipients and shut down the schemes;
  • Phase out the WET rebate on bulk and unbranded wine over four years to advance strong brands that command consumer loyalty and profitable margins to reinvest back into regional Australia;
  • Abolish the separate New Zealand rebate arrangements that provide preferential treatment to NZ wine producers and replace it with a level playing field for all claimants, irrespective of nationality;
  • Encourage winery consolidation by introducing transitional WET rebate measures that allow the separate rebate entitlements of the merging entities to be phased down to one entitlement over four years;
  • Return $44m of government savings from these reforms to industry to boost marketing of Australian wine to grow export demand.
  • Provide industry support to assist those impacted by the changes.

We conservatively estimate our plan will deliver net savings to the Commonwealth of at least $234 million over the next four years.

Read the submission and supporting documents here.