Kelly O'Dwyer (Higgins, Liberal Party, Minister for Revenue and Financial Services) Share this | Hansard source

Firstly, I would like to thank those members who have contributed to this debate. I know that the member for Indi has been very passionate in her support of these reforms. I also acknowledge, as she has done, Colin Campbell, who is a doyenne of the industry and who has been an absolute force in making sure that we could come to a very sensible resolution on these issues that will benefit the industry overall. And I would like to acknowledge all of those who have worked so productively in this process. It has, as the member for Indi pointed out, been a very collaborative process. Senator Anne Ruston, the Assistant Minister for Agriculture and Water Resources, together with my office and together with those in the industry and interested members like the member for Indi, have all worked incredibly hard to get something that will actually set up the wine industry for future years to make sure not just that they can be profitable but also that our wine can be celebrated right across the world, as it should be, and that we can encourage and support particularly small wine producers. So, I want to congratulate all of those people who have been involved in this process. It has been quite a significant period in which we have undertaken the consultation, and I think we have got a very good outcome as a result of that.

Schedule 1 of this bill introduces changes to support the integrity of the wine equalisation tax rebate and better target the rebate to its original intent of supporting small wine producers. Eligibility for the rebate will change to ensure that the rebate is targeted to producers that have a genuine investment in the industry. To be eligible, a wine producer will need to own at least 85 per cent of the grapes used to make the wine throughout the winemaking process. This will prevent the rebate from being claimed multiple times on the same parcel of wine. Packaging and branding requirements will be introduced to target the rebate to legitimate producers rather than traders who buy and sell wine in bulk.

A transition period for rebate eligibility will apply to allow producers sufficient time to adjust to the changes. In addition, from 1 July 2018 the rebate cap will be reduced from $500,000 to $350,000 and remain at that level. Through these changes, the government is addressing industry concerns about the misuse and exploitation of the rebate and the distortionary effect these practices have on the Australian wine market.

The tax relief for intrafund MySuper transfers in schedule 2 of the bill will make sure that superannuation fund members are not disadvantaged by tax liabilities as they move to MySuper accounts. As part of the transition to the MySuper rules, superannuation funds are required to transfer the existing balances of their members' in-default products to new MySuper compliant products. This ensures that these members get the benefit of lower costs and more transparent superannuation arrangements. The amendments in this bill provide tax relief to superannuation funds that transfer their members' balances to MySuper products, within the same fund, by providing an asset rollover. This asset rollover will defer any tax payable on the transfer of assets until the time the asset is ultimately disposed of by the receiving entity. Current rules provide this relief where the transfer is to a different fund, but not where the member stays within the same superannuation provider. This measure extends the relief to these intrafund transfers. Extending this tax relief will ensure that neither members choosing to move to a new provider nor those choosing to move to a MySuper product with the same provider will have tax liabilities crystallised on the transfers of their balances and the assets supporting the balances. I commend the bill to the House.

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