Matt Keogh (Burt, Australian Labor Party) Share this | Hansard source

Western Australians are spoilt for choice when it comes to wineries. We have hundreds of wineries throughout the state, across six distinct wine regions, including the world-famous Margaret River region and the Swan Valley to Perth's north-east. I am fortunate that my electorate of Burt is surrounded by wineries, including Jadran Wines, Raeburn Orchards, Rocksgate Estate Winery, Millbrook Winery and Fairbrossen Winery. I look forward to one day when the Armadale Hills and surrounds are known as the 'Swan Valley of the south'.

Western Australian winemakers are a highly decorated bunch—that's an intended pun—who are known in particular for creating some of Australia's greatest cabernets and chardonnays. It took some time for Australian wine writers to acknowledge that cabernet and chardonnay grown out of WA's premier wine region of Margaret River were some of the best in the land, but these wines have now achieved unparalleled ratings from the world's most influential wine sources.

This bill will enable the newly named wine authority, Wine Australia, to administer grant programs, including the Wine Tourism and Cellar Door Grant program. This sounds great, and as a lover of wine I think it's fantastic that we are debating the Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017, which will support Australian winemakers. However, I had a look at the make-up of the Wine Australia board, and I noticed that only South Australia, New South Wales and Victoria seem to be represented. I absolutely support this program but do hold serious concerns that Western Australian winemakers are going to have a hard time getting recognised by a supposedly national body that, like so many others, is essentially run by the eastern states. The cellar door grant program represents $50 million of taxpayer money. I would be doing the Western Australian wine industry a great disservice if I did not to raise my concerns early in the piece in this regard.

The Export and Regional Wine Support Package will allow entities with an annual turnover below $20 million to claim 50 per cent of their promotional activities, up to a cap of $50,000. The object of this grant is to reduce the transaction costs of exporting for wine exporters and, in doing so, to increase opportunities to grow exports from Australia to China, Hong Kong, Macau and the United States. The pool of money this will be drawn from is limited to $1 million but is non-competitive and can be used to claim on all manner of export related costs, including travel to any of those countries or areas; providing free samples; the cost of trade fairs, seminars and in-store promotions; and marketing and advertising. Strangely, however, this funding is going to be provided on a first come, first served basis. So we will wait to see the efficacy of the distribution.

I think it is important that we support our wine industries, particularly that of Western Australia in its export markets and a capacity to grow the market it can sell into. I know there are many Western Australian wines already being served on the tables of restaurants and available through the bottle shops and liquor stores in many parts of the globe. In fact, I make it a key point whenever I travel not only internationally but even when I am here in Canberra or other states—if I can, depending on the wine list—to make sure that I and, of course, those that are with me get the great opportunity to sample some of Western Australia's finest wines.

Both of these initiatives were introduced to assist the wine industry transition to reforms of the wine equalisation tax, including a reduction in the annual rebate from $500,000 to $350,000 from July next year. While I am supportive of the bill, I am conscious of the impact that the wine equalisation tax will have on Western Australian winemakers. Reform to the WET rebate was long overdue. The system was being rorted by big chains and unbranded operators in creative entity structures. When I looked into the history of this, I found, like many other issues I find myself speaking on in this place, the GST was again at its core.

When the GST was first introduced, there was a great deal of angst amongst the winemaking community about the impact of the 10 per cent on their products and the consequences of that. The glimmer of consolation was that pulling a cork out of a wine bottle might hopefully be a lot cheaper, as GST would also see the abolition of a raft of other taxes. As part of the GST, former Prime Minister Howard introduced a 29 per cent wine equalisation tax to account and to offset the overall reduction in the amount of tax paid on wine. The then Labor opposition proposed a cellar-door exemption from the WET in order to boost the cellar door sales of smaller producers. While this specific amendment proposed by Labor was not adopted, the then government eventually did propose and pass something very similar to it. The Howard government's exemption, though, ended up being used and abused by larger bulk operators.

Unfortunately, the Turnbull government attempted to turn reform of the WET into a revenue grab at the expense of our wine producers. The government planned to pocket $300 million from the first reform proposal it put forward. Following significant industry backlash and expressions of concerns from Labor, the government backed down and went back to the drawing board—as with so many other pieces of legislation it has brought forward of late. However, the government still plans to be $160 million better off as a result of the reforms that it is putting forward here, and the implementation of this industry support package.

In Western Australia, last year, close to 400 wine producers participated in a survey seeking to measure the economic and social consequences of the proposed wine equalisation tax reforms. Wines of Western Australia chairman Redmond Sweeney said that, while there were some positives to come from the reforms, Western Australian producers would be disproportionately impacted by the lowering of the cap. Western Australia has the highest proportion of small to medium sized wineries in Australia. Those are the ones that will suffer the most should the cap be lowered.

What's worse is that the grant schemes that are meant to be helping out all of these smaller operators are being administered by an east coast run body that has seemingly no Western Australian representation, despite Western Australia being an absolutely critical part of the Australian wine industry and, in many respects, leading the charge in the varieties in which we excel. In reality, these grants will do very little to offset the impact of the government's larger agenda. Of course, we support the grant schemes. I think we should be doing what we can to support these businesses. They are critical not just to employing many people across regional Western Australia directly but also to making sure we have a vibrant tourism industry throughout the south-west of Western Australia which provides even more jobs to the young people in that area.

But we know that this is really a savings measure for the government, and it's at the expense of the small businesses that it says it likes to champion. More should be done. Margaret River winemaker Vanya Cullen has said that, while parts of the reform were needed to clean up certain parts of the industry, the blanket approach of lowering rebates presents a danger in outweighing the benefits of the reform in toto. Many winemakers in WA are dependent on rebates to compete with larger producers.

To say that this is about savings would be disingenuous on the part of the government. It has just handed big business a huge corporate tax cut and it intends to provide that to even bigger businesses and, of course, the banks. I support reform in this area, I support the overall package and I support the grants in particular that will support the small- to medium-sized enterprise in the wine industry in Western Australia. But I think the critical point that needs to be made here is that the reforms in themselves are just not enough.

Now that I've addressed the detail of the reform package that we're dealing with here, I'd like to say a few more things about the wine industry. The wine industry is not just about those who like to have a tipple on a Friday night over dinner. It is bigger than I think most people realise and it is one of our leading brand ambassadors for the Australian export industry. There are not many products that come branded in a way that so clearly and precisely demonstrates not only that they are an Australian product but the region within Australia from which they come. They, therefore, provide not just the opportunity to market Australia and Australia's produce but also the opportunity to market tourism. It's not just about tourism to the wineries and the cellar doors, which these grant programs will hopefully continue to support. Of course, every time someone in a classy restaurant in London, New York or anywhere else in the world picks up a bottle of, say, Vasse Felix and sees that it is from the Margaret River region, they are immediately transported to seeing the opportunity to visit Margaret River, to find out more about Margaret River and to find out more about Western Australia. I am sure the same can be said for the Clare Valley, for McLaren Vale and for many different wine regions around Australia. I think this is a crucially important aspect of our wine industry, because it is a brand leader for Australia across the world. It is one of those sectors that value-add.

I come from a state which exports a lot of dirt—often referred to as iron ore—and has precious minerals as well. But, at the end of the day, the wine industry is a truly value-added industry. It is a shining light for what Australia can do. That is evidenced by the way in which Australian wines are referred to through international wine sources that acknowledge the impeccable standards of the wines we produce. We have some unique factors that come into play, because we have been able to take grape varietals out of many different parts of Europe and transport them to Australia, where we have soil types that match but different weather climates. Then we have the same weather climates that go with different soil types. From the varietals we have inherited from our European heritage we have been able to create unique Australian flavours—the full-bodied flavours that have put our wines so prominently on the world stage. That has allowed us to talk not only about our wines but also about the foods that match with them, which we can export as well. It's important that we remember that.

I mentioned this before and I'll come back to it in closing. It's not just about the people employed in making the wine in the wine industry, who are very skilled at what they do. Of course, there are also the hundreds and thousands of people that come into our country to help with picking the grapes in small vineyards, where it's not in any way economical to do that mechanically. It's the money they bring in, the tourism dollar—they earn money and then redistribute it throughout our economy by consuming our goods and services. It's the way in which many Western Australians, from Perth, from my electorate and around, will travel down south, as we call it—some have referred it as 'Douth'—to visit the Margaret River region, to visit the wineries, to have lunch and share meals and have fun, to experience the great wine and even some of the beers on offer in the south-west region of Western Australia—as I'm sure they do in other parts of Australia—and to spend that tourism dollar, which is so vital for keeping our regional communities alive. These are the things that should not be overlooked. It's why we need to continually support our wine industry, because it is a huge brand ambassador for our nation around the world. It's why I support this grants program. I do have reservations about the make-up of the board. I say to the minister: make sure you get some Western Australians on it pronto. We'll all feel more comfortable if you do.

Debate interrupted.

Federation Chamber adjourned at 19:30

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