By Andy Young

The Federal Government has published its Discussion Paper as part of its review of the Wine Equalisation Tax (WET) rebate.

The Discussion Paper forms part of the government's Tax White Paper process. The government has stated that its objective is to achieve "a better tax system that delivers taxes that are lower, simpler and fairer". 

With the release of the Discussion Paper the Winemakers’ Federation of Australia and Wine Grape Growers Australia, said they "welcomed Federal Government recognition of the unique commercial challenges facing the wine industry which have been highlighted in the government’s Wine Equalisation Tax (WET) rebate Discussion Paper."

WFA chief executive Paul Evans said: "Government has outlined a process to consider integrity measures to the rebate and we welcome the opportunity to put industry’s views forward.

"Our priority now is to work with government to highlight the support provided to regional Australia via the rebate and progress the reforms needed to ensure the rebate continues to benefit industry and is placed on a more financially sustainable foundation,” Evans said.

“Following over two years of analysis and consultation with industry, the two national peak wine industry bodies will continue to advocate for the phasing out of rebate eligibility on bulk and unbranded wine sales which pulls down wine and grape pricing, delays the balancing of supply with demand and is commoditizing the sector by underwriting the growth of the low equity home brands of the major wine retailers.

“We believe the WFA recovery plan put to government and supported by the majority of industry is in the best interests of the long-term future of the industry.”

The Discussion Paper was also welcomed by Australian winemakers Treasury Wine Estates and Pernod Ricard Winemakers. Both companies have previously stated that they think the WET rebate requires significant reform and that it is "failing the Australian wine industry".

Angus McPherson, managing director for ANZ, Treasury Wine Estates said: "Reform of the WET Rebate is long overdue and we encourage the wine industry to see today's Discussion Paper as a crucial process to improve our industry’s future and ensure Australian wine can compete and win both domestically and in key international markets. Keeping the status quo on the Rebate is simply not an option."

Following the publishing of this discussion paper the government will release a Green Paper in the second half of 2015. Further consultation on possible reforms to improve the tax system will follow and the White Paper is expected in 2016.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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