Lisa Chesters (Bendigo, Australian Labor Party) Share this | Hansard source

It is good to be standing here and talking about the success of the Australian grape and wine industry. I am sure that, after today, many of us will feel like having a glass of wine, but we've got a few hours to go. There is a lot to be proud of in what the Australian wine industry has achieved. It's important, in speaking to the Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017, to say that, whilst Labor supports this bill, it gives us an opportunity to remind the House that it has been a bit of a journey to get here.

The newly named authority, Wine Australia, will be responsible for administering two funds created as part of the wine equalisation rebate reforms. This was first flagged on budget night in 2016, when the government and the Treasurer of the day thought they could pull a swiftie on the wine industry by saying, 'Yes, here is your $50 million as promised, as part of the reform package,' but then put forward a wine equalisation tax measure which had not been fully agreed to and supported by the wine industry and which was not in the spirit in which it had been discussed prior to its announcement on budget night.

The wine industry—including many wineries in my own electorate of Bendigo—and the opposition had serious concerns about the original design of the measure as put forward by the Treasurer on budget night. The original measure was supposed to start on 1 July this year. In May 2016, it was announced that the cap for the wine equalisation tax would be lowered from $500,000 to $290,000 within 12 months. The day after that budget announcement, winemakers said to me: 'Lisa, it's just not fair. That wine is in the barrel. How can you make such a change so rapidly and so quickly? It will put my business, my enterprise, at serious risk.'

Another issue that winemakers raised about the first draft was that it targeted the cap first and not where the real gaming of the wine equalisation tax is going on, and that is in the bulk and unbranded wine. They said that the way the original changes had been proposed in the bill gave a free kick to the bulk and unbranded wine sector—commonly know as the Coles and Safeway branded wine; it could basically continue to game the system. Through the efforts of Wine Australia, our state based organisation and the opposition, we engaged in a constructive way to say, 'Yes, everybody agrees that there needs to be reform with the wine equalisation tax; however, what has been put forward by the government isn't fair.' After consultation and genuine engagement, the measure was changed to be more reflective and more in line with what the industry had previously asked for and which would deliver similar savings to what had been put forward on budget night. It was about restoring integrity to the wine equalisation tax, which has always supposed to have been about supporting small, independent wineries, many of whom are based in many of our electorates in regional Australia, particularly in my electorate of Bendigo.

In the one area of Heathcote alone, there are over 80 wineries and cellar doors. Quite often I use a statistic which makes schoolchildren and teachers laugh, which is that there are more wineries than schools in my electorate! I have 96 schools across the Bendigo electorate and we have over 150 registered cellar doors and wineries, and that's just the beginning of the extent of the wine industry in areas like mine in Central Victoria. They will benefit from this bill that is before us.

This bill has been designed to deliver on the $50 million that has been allocated for the Export and Regional Wine Support Package. This was part of the commitment to the industry because of the wine equalisation tax reforms. Within this $50 million, for those with $20 million of annual turnover up to a $50,000 cap can be claimed for promotional activity. This fund is limited and the money will be allocated on a first-in-best-dressed basis. I have a few concerns about the first-in-best-dressed basis because it does mean that we may not necessarily get the best products with the best kind of promotional material asking for support. The refund will also cover any manner of expenditure, including taxi fares and business cards in dual languages. Again, with $50 million on the table to support our independent and small winemakers, you just wish that the government could have been a little bit more innovative and put a little bit more thought into how they wanted to spend that $50 million. When talking to my local wineries, they have said to me: 'Business cards are something I can cover. Having a business card I can give to someone is something I can cover. But where I really need support is on how to establish those markets.'

When you have an area like Heathcote, which is a big shiraz region with over 80 independent shiraz producers, they are trying to grapple with whether they have their own name for their wines, like Jasper Hill or Mount Camel, or whether they band together as Heathcote shiraz. They acknowledge that they can't produce enough wine independently to justify the expenditure of opening up an export market in China. China is massive. We could never produce enough wine in Australia to feed the Chinese market. So, as we on this side have talked about a lot, we need to stop thinking 'big' and 'bulk' and start thinking 'niche' and 'top price'. That's very much what our small independent winemakers want to get into. They want to get into telling the winemaking story, making their wine the one-off gift or having it go into the top restaurants.

These are small businesses and, like most small businesses, it's almost a 24/7 operation. They spend so much time making the wine, they need support in marketing the wine. So it is a bit disappointing with $50 million on the table that the government hasn't been more innovative on how this can be spent. I know that Wine Australia is very keen for innovation, and Wine Australia will be working to maximise how this funding can support small winemakers. That's why it's just disappointing that the government has gone for a first-in-best-dressed basis, including taxi fares and business cards. Most small businesses say: 'I've got that covered, but what I really need is help establishing the client base, the market base and how I position my product.' Also, if they hit a barrier—and we have a lot of secondary trade barriers with the Chinese market—they need help getting through.

I also have some concerns about the limit for marketing and promotion. There are China, Hong Kong and the United States, and Japan is a really important country to a lot of our winemakers. Korea is an important country, and increasingly the UK and Europe. So it is disappointing that this provision has been limited to these markets, and maybe it calls the China free trade agreement into question—perhaps it isn't quite delivering what the government is claiming it's delivering if our winemakers now need $50 million to help get their product into China. What has gone on here? Apparently it is great on one hand and our winemakers are doing really well, but then on the other hand we have to give them $50 million to help them get their product there. So maybe there is a bit of a disconnect between what the government is claiming and what is actually happening.

The other part of the scheme that is really important, particularly to my area, is the $10 million that will be allocated to wine tourism and cellar door grants. Infrastructure is important. One of the reasons why this particular part is critical to regional Australia, and in particular regional Victoria, is wine tourism. Whilst the core business is the production of wine, what we have seen really flourish across regional Victoria, whether it be the Bellarine-Geelong, whether it be the Yarra Valley, whether it be heading to the Grampians or whether it be around Bendigo and Central Victoria, is wine tourism. People who travel to Bendigo, perhaps to the art gallery, might go via Heathcote and our wineries. Our wine tourism and cellar doors are critical in terms of regional tourism and are a big part of the culture. A lot of wineries talk to me about capital costs, in terms of establishing those doors, making sure they've got decent and up-to-date maps—making sure they have maps and roads signs that can get you there. Believe it or not, in the age of mobile phones and Google Maps, we still need our road signs because a lot of these areas are in black spots. Some of this funding will go towards helping people navigate the good old-fashioned way to get to wineries because we still haven't fixed a lot of the black spot problems in regional Victoria.

Part of the cash grant scheme will allocate money to cellar doors. Again, this is a bit of a top-up. The government tried to move very quickly to reduce the cap, and we knew that would hurt a number of small to medium wineries. I guess, because of the reform going ahead, it was agreed that we would have a grant scheme to help as a bit of a top-up. If some of our small wineries sell more than what the new cap is, it is kind of restricting. It is important that that continue as well as, as I've said, making sure that we have our wine tourism infrastructure established.

Whilst we on this side do support this bill, we are critical of how long it's taken to get here and of the haphazard and messy way we got here. We hear about the government taking a bipartisan issue on the reform of the wine equalisation tax and support for an important industry in so many of our electorates, and then they just mess it up. Everything this government touches, even when we're trying to work together, gets stuffed up. It's one of the unfortunate things with this government that we have to work so hard from opposition, so hard with the industry, to try and get the government to clean up its own messes. I do have to acknowledge, though, that the minister responsible for this did work with us and was open to reform. Unlike what we have seen from some other ministers who dig their feet in and say, 'Labor is wrong and it's all Labor's fault,' at least Senator Anne Ruston did say, 'Let's work with the industry to get this right.' I do want to acknowledge that, unlike some of her colleagues, she did work with us to make sure that we got a package that the industry could work with, that did restore the integrity of the wine equalisation tax and at the same time ensured that we had this fund created to support the growth of our wine industries here in Australia.

The government should stop all this rhetoric about how great their free trade agreements are for the wine industry because, quite frankly, they're not delivering yet, and they're not delivering for some really fundamental reasons. The small independent winemakers are not getting access to the markets that will help deliver benefits. We are supporting clustering—I have used Heathcote as an example—to encourage the export of wine. Whilst they might not be able to send over a plane full of their own wine, if we could gather wineries together we might be able to do some cross-marketing.

There is still a lot of work to do. The wine sector is unhappy with how this government has rolled out this package and this reform. It's been a messy process, and it didn't need to be this hard. Whilst the outcome that we've got to is acceptable, we shouldn't have to work so hard on a proposal that in its original form was bipartisan. As I have said, the Victorian wine industry contributes $7.6 billion to the Victorian state economy and employs over 13,000 people. In the 22 divisions and winery regions that we have, there are over 500 cellar doors and 477 wineries. As I've said, that's a huge chunk of my electorate in Bendigo. We are proud of what our winemakers are achieving, the work they're doing, the innovations they're making and the fact that so many of our wineries are wanting to become ethical, sustainable wine businesses. We should be supporting the work that they do.

It's great to finally have this being debated and going forward. However, it's just so disappointing that the government messed it up, from the very first night that they announced these reforms on budget night to where we are today.

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