Peter Barnes, President of the Winemakers’ Federation of Australia, the wine industry’s peak body, delivered a speech before the Australian Prime Minster, Mr Howard, last week. Its contents provide a concise snapshot of where the wine industry sees its present and future, and identifies the key issues confronting its progress. I have chosen to reproduce some key points: Industry Importance: ‘We are Australia’s 5th largest rural export industry and are poised to be the largest rural exporter by 2010. Our industry now directly employs 30,000 people in 61 regions across Australia, a doubling of employment between 1996 and 2001.’ Irrigation Issues: ‘In South Australia’s Riverland for example, where flood and furrow irrigation were the 1980’s norm, around 50% of irrigators now use drip or undervine sprinkler irrigation. ‘This means that instead of using 12-15 megalitres per hectare per year, these irrigators are now using 5 megalitres per hectare. These changes, combined with the value-added nature of our product, makes it one of the most efficient users of water on a $ output per megalitre input basis.’ Taxation: ‘A volumetric tax discriminates against 70% of domestic volume, not only cask wine, and its introduction would have significant consequences in a number of important regional communities. ‘Likewise, an ad-valorem tax discriminates against higher priced wine, and consequently against smaller wine producers who do not have the scale to produce lower cost wine. ‘Our tax policy is: Wine Equalisation Tax (WET) exemption on the first 600,000 litres of domestic sales, 29% WET after that. ‘If implemented, this policy would eliminate the burden of the current WET on small and medium wineries, whilst leaving 85% of the Wine Equalisation Tax revenue base intact.’
