Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 17 February 1987
Page: 43

(Question No. 1565)

Senator Morris asked the Minister representing the Minister for Primary Industry, upon notice, on 4 December 1986:

(1) Is the Minister for Industry, Technology and Commerce aware of a scheme promoted by Australian Wine Commodity Cellaring Pty Ltd by which young wine is purchased and cellared.

(2) Does the Minister believe that this will have a beneficial effect on the Australian Wine Industry.

Senator Walsh —The Minister for Primary Industry has provided the following answer to the honourable senator's question:

While I am aware of a scheme promoted by Australian Wine Commodity Cellaring Pty Ltd involving the purchasing and cellaring of wine I would not wish to comment on the specific commercial aspects of this scheme.

I would however like to take this opportunity to clarify some misconceptions surrounding the current taxation treatment of wine stocks and comment generally on the concept of the scheme.

From time to time the wine industry has claimed that it is being taxed on its stocks. This is simply not the case. Under Section 28 of the Income Tax Assessment Act the value of trading stock of any business is taken into account in assessing taxable income. However, if a winemaker elects to value stock at `cost' under Section 31 of the Income Tax Assessment Act, the year-by-year effect of that stock on taxable income is neutral and there can be no income tax payable on that stock until it is sold.

The vast majority of Australian wine is currently sold in bulk form in casks and flagons which require little maturation. Any scheme which would provide an incentive to winemakers to increase production of premium quality wine and help redress the uneven growth in wine sales, which has been largely confined to bulk wine, should be beneficial and is to be encouraged. Moreover, with winemakers increasingly looking to export markets for their wine as domestic market growth continues to slow down, premium quality wines provide the best opportunity to capitalise on export potential and promote Australia's image as a quality wine producer.