Senator FERGUSON (3:19 PM) —Senator Schacht certainly leads with his jaw. The question I would like to put is this: who is responsible for every cent of tax that is currently paid on wine in Australia? Who is responsible for every cent of tax that is currently paid by winemakers in Australia? The answer is the Labor Party.

In 1983 there was no tax on wine at all; and yet the Labor Party in 1984 introduced a 10 per cent tax on it. It is all very well for Senator Schacht to leave the chamber, because in fact he was here for much of the time that the Labor Party chose to tax wine. In 1984 there was no tax on wine. The Labor Party introduced a 10 per cent rate. The wine industry said that it would break them and cause them to go out of business and that it would cost jobs.

The response from the Labor Party was to put another 10 per cent tax on wine in 1986 or 1987. Senator Sherry, you came here soon after the time that, not content to have a 10 per cent tax on wine, the Labor Party decided they would have a 20 per cent tax on wine. Of course, the winemakers complained and said that this would put them out of business, cost jobs and stop the fast-growing industry that was currently developing then throughout the 1980s.

But the Labor Party was not content with 20 per cent. In 1993 it tried to tax wine at 32 per cent. And what did we hear from the Labor Party? Not a word. We had the winemakers quite rightly saying this was an imposition on the industry and that it would cost jobs. Just because they were a successful industry, an industry that was growing in size and supplying exports, the Labor Party did not listen one iota until they were forced to back down in 1993, and so we got to the stage where, at two per cent per year, we had the tax on wine increasing until there was a wholesale sales tax of 26 per cent.

Senator Schacht should not come in here on behalf of the Labor Party and criticise anything that this government is doing in relation to the taxation of wine, because every cent that is currently paid is the responsibility of the Labor Party. The Labor Party felt at the time that the industry could bear that tax and those taxes that were imposed in 1984, and in 1986 or 1987—I cannot remember which year—and then again in 1993 onwards when it increased by two per cent per year.

We have taken a responsible attitude. Although there will be a slight increase in the rate of tax, the Labor Party never speaks about the compensation that is being offered through tax cuts to make the increase in wine more affordable to those people in the community who spend more of their disposable income on wine. If you are talking about premium wines, it is those at the high end of the income earning scale, those who will get the largest tax cuts, who will benefit the most, and wine will still be affordable.

The Labor Party's argument has holes in it from start to finish. They were never worried about putting tax on wine. The Labor Party thought that the wine industry was a milch cow which they could tax any time they liked. Whenever they wanted to increase taxes, they said, `Tax the wine industry.' Is it any wonder that we are very sceptical when people like Senator Schacht come in here—and I have heard Senator Sherry speak about it at length during the debate—talking about this terrible imposition that is being put on the wine industry, when in fact the Labor Party itself was responsible for every cent of tax that is currently being paid by the wine industry? I am sure the wine industry is aware of that. It is understandable that, at every stage of the proceedings, they are going to do everything they can to try to minimise the amount of tax they are paying into federal revenue.

We have had hearings and spent more time in consultation over this particular issue than probably any other aspect of the tax package. When it came to having submissions put before us, probably those in the wine industry have been longest and loudest in their representations to this government. It is a healthy industry. I represent the state of South Australia which produces 50 per cent of Australia's wine. The type of taxation that is on wine—the ad valorem taxation and the imposition of a WET tax—was supported by the Winemakers Federation of Australia, which represents all of the major producers and over some 400 small wineries throughout Australia.

The Winemakers Federation supports the framework of proposals that we put before the parliament in the new tax system. It is very cheap of the Labor Party to criticise any changes to the taxation on wine when in fact, as I said earlier, they were responsible for every cent that is being paid at present. (Time expired)