By Andy Young
Wines of Western Australia has called on the Federal Government to respect and adhere to the core principles it agreed with winemakers with respect to WET reform.
The Federal Government has said that for its 2016 Budget it will be introducing WET rebate reforms which is calls, “well designed and sustainable”.
Last year Wines of WA engaged in an extensive consultative process with the Winemakers Federation of Australia, and made a pre-Budget submission to the Government, which called for “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”.
Following on from that and in light of the Government’s planned WET reforms, Wines of WA has reinforced the core principles of WET reform:
- “The WET rebate has been instrumental in delivering long-term benefits to the wine industry and tourism in regional Australia.
- “Any reforms that tighten eligibility, must continue to deliver on original policy intent: to support small wine producers in rural and regional Australia.
- “The total available rebate in maintained and as a rebate not as a grant.
- “We support and industry/Government collaboration in growing the export demand funded from the WFA integrity measure savings.
- “The Government should continue to monitor the use of the rebate to ensure it meets its original policy intent.”
Following on from the Wines of WA statement, the Margaret River Wine Association said it “fully supports this stance as it truly represents the position of the Western Australian wine industry that is substantially comprised of small to medium sized wine businesses.”
The association added; “Collectively small to medium sized wine businesses would find it extremely difficult to compete on a fair and equitable basis should the Federal Government choose to ignore the overwhelming support provided to the WET rebate reform core principles widely endorsed by the Australian wine industry.
“All small to medium sized wine businesses in Australia will be impacted regardless of their physical location be it Queensland, New South Wales, South Australia, Tasmania or Victoria.”
The Federal Government is due to announce the WET reforms in its Budget on 3 May.
A cellar door is not the appropriate solution.
Due to high labour costs, especially on weekends, not all small wineries have cellar doors. After 14 years of operation, we closed our cellar door in December, as it was becoming a larger and larger cost to keep operational.
Our major focus is on export. However, to support export, we require a healthy domestic market. Without the current rebate, that too would become non-viable.
Again, due to cost of labour, parking, and road tolls, coupled with too many restaurants and cafes, with large wine lists and small table turns, distributors margins are increasing, and many of them are going out of business. That leaves tiny margins for wineries. Without the rebate, we would have to increase prices to regain any element of margin.
This in turn would make domestic wines non-competitive against good quality, cheap imports.
That signals the end of small wineries, and the end of exports of high end, premium wines from Australia.
What part of that logic defies the boffins in Canberra. Perhaps their kids could explain it to them.