Jacinta Collins (Victoria, Australian Labor Party, Shadow Cabinet Secretary) Share this | Hansard source

Labor will be supporting this Treasury Laws Amendment (2017 Measures No. 4) Bill 2017. Schedule 1 amends the A New Tax System (Wine Equalisation Tax) Act 1999 to improve the integrity of the wine equalisation tax producer rebate. Labor supports the WET integrity measures. Labor wants to give producers certainty about the wine equalisation tax regime. The WET producer rebate, as it currently stands, has distorted production in the wine industry, contributing to the increased supply of wine and wine grapes and preventing necessary adjustments that would improve the long-term strength of the industry.

The rebate was introduced in 2004 and currently provides up to $500,000 in tax relief to producers of wine. The intent of the policy was to benefit small wine producers in rural and regional Australia. As my colleagues, the shadow Treasurer, Chris Bowen, and the shadow minister for agriculture, fisheries and forestry, Joel Fitzgibbon, noted in 2015, the intent of the policy is not being met, and there is consensus from the government, the opposition and the industry itself on the need for change. It took some time for the legislation to make its way to parliament, despite clear signals from the opposition that we would engage with the government on the issue and support sensible proposals.

Reform of the WET producer rebate would better target the rebate and improve its integrity. It would also ensure consistency with the original policy intent of benefiting small wine producers who are making a genuine investment in the wine industry, many of whom are in rural and regional Australia. If left in its current form, the WET producer rebate will continue to create a perverse incentive for businesses to structure themselves so as to maximise rebate claims. The result would be excess wine production, exacerbating challenging market conditions for growers.

The measures in this package are welcome and supported by many stakeholders, including most industry participants. As the Winemakers' Federation of Australia noted:

Schedule 2 of the bill amends the Income Tax Assessment Act 1997 to provide income tax relief to superannuation funds who are transferring the account balances of their members as they transition to the MySuper rules. Labor was proud to introduce the MySuper reforms, which brought in new low-cost superannuation products with a simple set of features to allow members to more easily compare between products and to ensure that members do not pay for any features that they do not need or use. Superannuation funds have been able to provide MySuper products since 1 July 2013.

As part of the transition to the new rules, funds were required to transfer the existing balances of their default members to MySuper-compliant products by 1 July 2017. When superannuation funds are transferring these balances and the assets which support these balances, tax liabilities could arise on the transfer. This tax payable would reduce the balance of the member. Tax relief is currently available for those superannuation funds that transfer their default members to a different fund. However, this tax relief has not been available where the member transfers to a MySuper product with their existing superannuation provider. This legislation will extend the tax relief, providing an asset rollover for mandatory transfer of balances and assets to MySuper products within the same superannuation fund. Labor supports this change as it will make sure that members' balances are not negatively impacted by tax liabilities when their balances are removed. It will also ensure equity between those members who moved to a new fund provider and those who take up new products with their existing provider.

Labor supports the bill.