Now the GST is a reality again, it’s time for the organisations which claim to represent the different segments of the wine industry to earn their salt by ensuring that any Wine Equalisation Tax (WET) is as low as possible. Unless altered, a WET would represent a 29% tax on top of the 10% GST, despite several wine industry submissions to reduce it to 24.5%. According to the University of Adelaide’s Centre for International Economic Studies (CIES), the 29% WET actually raises the equivalent tax rate under the present scheme from 41% to 46% as a wholesale sales tax (WST). When the GST is applied to corkage charges in restaurants, the 29% WET become equivalent to a WST of 52%, says the CIES, increasing total wine tax revenue by over 20%. The CIES says a revenue-neutral WET would be between 20-22%. The wine industries of Australia and New Zealand are already the two most highly taxed in the world. With a Budget surplus and over $500 million from the wine industry each year to help thank for it, the Commonwealth Government has issued a $13.6 million grant to help establish a new research network. Based in South Australia, the Cooperative Research Centre in Viticulture (CRCV) will conduct seven years of research into the relationship between fruit quality and wine, across the pricing spectrum. CRCV’s director Dr Jim Hardie says his aim is to arrive at a readily applicable index or number based on aspects like colour, flavour, balance and tannins for growers to maximise the quality of particular varieties and wine styles by adapting their management systems.
