Federal Government Announces Revised WET Rebate Integrity Measure Amendments

Federal Government Announces Revised WET Rebate Integrity Measure Amendments

Wines of Western Australia (WoWA) warmly welcomes today’s announcement by the Federal Government of important integrity reforms to the Wine Equalisation Tax (WET) rebate and supports those reforms. This is a good news story of Government and Industry working together to achieve optimum and balanced outcomes.

Senator Ruston is to be congratulated on the thorough and extensive consultation process that she has conducted with the wine industry since the announcement of these reforms in the 2016 Budget. This process highlighted the importance of the WET rebate to small premium wine producers, particularly those operating in regional areas where they are a critical part of their local economies and tourism infrastructure.

WoWA has worked with the Government on behalf of the fine wine regions in Western Australia to ensure that the reforms refocus and restore integrity to the WET rebate system and continue to provide relief to small premium winemakers from the burden of WET. WoWA has been instrumental in the formulation of key aspects of the reforms, in particular:

• the eligibility criteria which will ensureyoung and innovative winemakers can enter the market and;
• and the cellar door rebate scheme which will encourage producers to continue to invest in their cellar door operations and support their local tourism industry.

Moving the amendments out to July 2018 will allow wine producers to refocus their businesses operations. Considering the extent of the reforms, this is a well measured revision due to the long production lead times in the wine industry.
 
Everything in the revised policy is focused around returning the rebate to its original intent and the Government has absolutely nailed it. We look forward to continued discussions over its implementation, the $50m Wine Tourism and Export Development Fund and future taxation reviews.

At the local level, we would like to make a special mention to Senator Dean Smith, Senator Chris Back, Hon. Christian Porter MP, Nola Marino MP, Rick Wilson MP and Andrew Hastie MP for their grassroots input in assessing economic and social consequences in regional wine communities. These grassroots assessments were also supported by Premier Colin Barnett and local MP Libby Mettam.

WA Wine Industry WET Rebate Position Paper

In the 2016 Federal Budget, the Government announced changes to the WET Producer Rebate (WET Rebate). Wines of WA (WoWA) supports the policy objectives behind the changes, namely addressing integrity concerns, better targeting support, and tightening eligibility for the WET Rebate. However, following extensive consultation with local industry, WoWA is very concerned about the direct and indirect consequences of the announced changes for regional growth and development, and regional communities. These consequences, which we believe are unintended, will have significant negative social and economic impacts in Australia’s regional communities in which wine producers are based.

Industry consultation included:

• A survey of producers conducted by RSM Australia.
• Industry “town-hall meetings” facilitated by Wines of WA and WA Members of the Federal Government. These meetings formed part of an informal consultation process by the Federal Government. Senator Anne Ruston visited most wine producing states in June 2016. The process included 4 meetings in the following regions and towns: Mt Barker, Pemberton, Busselton and Swan Valley.
• Extensive written and verbal communications with Regional Wine Associations. The positions documented in this paper have been ratified by all fine wine regions in WA.

Please see link here the resulting position paper outlining the results of this consultation process.

The paper has the endorsement of all WA Regional Wine Associations.

It outlines:
• the negative impacts on WA producers that will result from the proposed changes and;
• alternative amendments that will achieve the same revenue outcomes for government while re-focusing the rebate back to its original purpose of supporting small and medium wine producers in regional and rural Australia

The paper will be distributed to all state and regional associations in Australia and to all relevant government, opposition and cross-bench members and will inform all discussions supporting the position of WA growers and producers.

For further information, contact Redmond Sweeny - 0419 487 427

WET Rebate – Core Principles for Rebate Reform

WET Rebate – Core Principles for Rebate Reform
 
 For the 2016 budget, the Federal Government has made clear it will be introducing WET rebate reforms that apparently will be “well designed and sustainable”.
 
Wines of WA, the nine fine wine regions of Western Australia and individual industry participants were part of an extensive consultative process instigated in 2013 by the national body Winemakers Federation of Australia.
 
This resulted in a pre-budget submission in May 2015 that proposed integrity measures to return the rebate to its original policy intent being ‘… recognition of the substantial financial hardship faced by small rural and regional wineries and aimed to support the viability and consequent capacity to generate employment wealth in local communities.’
 
Accordingly, the Western Australian fine wine industry again reinforces these core principles with respect to WET reform:
 
1. The WET rebate has been instrumental in delivering long term benefits to the wine industry and tourism in regional Australia.
 
2. Any reforms that tighten eligibility must continue to deliver on original policy intent; to support small wine producers in rural and regional Australia.
 
3. The total available rebate is maintained and as a rebate not as a grant.
 
4. We support an Industry/Government collaboration in growing the export demand funded from the WFA integrity measure savings.
 
5. The Government should continue to monitor the use of the rebate to ensure it meets its original policy intent. 

For further information, contact Wines of WA:

Redmond Sweeny, President Wines of WA
T – 08 9284 3355

WFA Submission to WET Rebate Discussion Paper

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.

Read More

HAVE YOUR SAY ON INDUSTRY REPRESENTATION

HAVE YOUR SAY ON INDUSTRY REPRESENTATION
Grower and Winemaker survey

Dear Industry Colleague,

At the end of August, a wine industry leaders' meeting 'Grape and Wine 2015 - A Focus for Action' will be held in Adelaide. 

It will have two objectives: 
• the first to agree on the 2 or 3 key issues to accelerate return to profitability and which will be advanced with united industry support from representative bodies; and 
• secondly to achieve agreement or a process to reach agreement on an optimal future representative industry structure that presents a united industry voice on key issues, and maximises industry’s resources and influence, and at the same time values state and regional representation.

A small group of national and state industry leaders has been working on the concept and details of the leaders’ meeting since late 2014 following agreement that a more united approach is required to effectively work through the industry’s challenges and opportunities. 

Intuitive Solutions has been engaged to undertake some work in advance of this industry meeting. 

About the Survey:
• This survey should take approximately 15 minutes to complete.
• Survey close date: 19 August 2015
 Click here to start the survey.

Note: If you have difficulty with the link above, please copy the URL shown below and paste it into your browser:
http://surveys.intuitivesolutions.com.au/s3/GrapeAndWine15

If you have any queries about the survey, please contact Mitch from Intuitive Solutions at mmunro@intuitivesolutions.com.au

Scoping the Impact - Removal of the State Cellar Door Rebate

After significant engagement with industry, Wines of WA has determined that this is a critical issue directly affecting over 80% of the state’s wine production.  Indirectly, all WA producers are affected by the impact the removal of the rebate will have on resourcing of regional wine tourism.  Other businesses (tour providers, accommodation providers, and those who service businesses within wine regions) reliant on regional wine tourism will also be affected.

That Minister for Racing Gaming and Liquor, Colin Holt, would publicly state (Augusta Margaret River Times 20/05/2015) “given the subsidy applies to a small percentage of wineries … the impact on wine drinkers is likely to be minimal”, shows a clear lack of understanding of the intended purpose of the rebate.  This also demonstrates that there was no engagement with the WA wine industry before the decision was made.
 
In the budget papers, the justification for the abolishment of the scheme is stated thus: “given the limited scope of the scheme, the Cellar Door subsidy is to be abolished from 1 July 2015. A number of other States have also abolished their subsidies.” 

Both points are inaccurate and misinformed.  Wines of WA research suggests the subsidy is accessed by businesses that represent 86% of production (which means 86% of employment and value adding in region).  Only NSW has abolished the scheme.  SA and Victoria maintain theirs, albeit at different levels.  In fact, the Victorian state government considered abolishing the scheme in 2013 but after industry consultation demonstrated the value of regional wine tourism determined not to do so.

The reality is, the scope of the decision adversely affects every producer in WA either directly or indirectly.  The businesses directly affected operate significant wine tourism facilities that attract visitation to regions.  They have a positive effect on the regions in which they operate.  All other businesses within the region benefit from their efforts.  If investment in operating and promoting these major drawcards is reduced, all within the region will be negatively impacted across the value and employment chain.

An estimate of the investment by WA wine producers into regional tourism facilities over the past five years is around $20 million dollars.  All of this investment was implemented during a period of low profitability for the industry.  It is critical to the industry’s future success to remain internationally competitive in the wine tourism space.

Given there was no prior consultation with industry, Wines of WA will request a 12 month moratorium on the abolishment of the scheme.  In this time, an industry and government led review should determine how to improve the implementation of the scheme.

For further information, contact Wines of Western Australia

CEO – Larry Jorgensen
T – 9284 3355 E – ceo@winewa.asn.au

Policy on the Run - WA Wine Industry Response to the 2015-16 State Budget

The WA wine industry was disappointed to be informed of the abolishment of the long standing state based Cellar Door Rebate through the release of the 2015-16 state budget yesterday. 

With no prior consultation, the industry was not able to provide the state government with information on the value of the rebate to wine regions in the state’s south west.  The rebate provided regionally based WA producers with an incentive to resource cellar door and wine tourism offerings.  These businesses are significant tourism attractions, driving visitation to south west wine regions.  They are also significant employers within these regions and create an environment where synergistic businesses thrive, providing a further employment multiplying effect.

It is difficult to understand why a scheme that was an incentive to food and wine tourism businesses would be abolished when the state government is also purporting to support the transition from a “mining boom to a dining boom”.

Wines of WA President, Redmond Sweeny suggested that a better approach would have been to “consult with our industry to gain a deeper understanding of how the subsidy is re-invested back into the region through the operation of significant wine tourism businesses.  Businesses re-invest to create unique regional experiences that attract visitation by domestic and international travellers who are seeking a premium experience.”

WoWA is buoyed by the positive approach to resourcing tourism market development in the budget via an additional $24m for new destination marketing. WoWA also welcomes the increase in funding to attract more visitors to the state with the Tourism WA marketing budget increase to $31.2 million.
WoWA also backs the $27 million investment over three years to support the State Government’s events program and to target interstate and international conferences, and $11 million of Royalties for Regions funding to extend the Regional Tourism Marketing Program. This will have a positive effect on wine tourism businesses