Is Peter Costello going soft on the wine industry? The architect of the so-called Wine Equalisation Tax and the individual who has overseen the Australian wine industry become the most heavily taxed on this planet, has actually overturned a plan developed by the boffins of the Australian Taxation Office to impose the 10% goods and services tax on grapes, despite the fact that to do so would not have generated an extra cent in revenue. The concept would have cost the wine industry millions of dollars in wasted compliance costs and in cash flow. Grapes will remain exempted from the GST on the basis that they are a food. But we’ll really know Costello is going soft when he revisits the tenous logic of the WET and the present ad valorum approach to wine industry taxation. Leeuwin Estate’s Denis Horgan, president of the Wine Industry Association of Western Australia, said recently that new research has revealed that ‘in some cases a bottle of Australian wine retailed at $20 would only return a net taking of 48 cents to a regional winery’.
