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Thursday, 8 September 1983
Page: 634

Mr HICKS(10.10) —Ever since the morning after the Budget announcement that there was to be an excise of $2.50 a litre on grape spirit the phone of my electoral office has been running hot as has the phone here in Canberra. Why should they be running hot? I just remind the House of some of the effects this excise on fortified wines will have. Firstly, there will be an increase in the retail price of some lower cost wines in excess of 40 per cent while the cost of more expensive ports, muscats and dry sherries will rise by 37 per cent. Secondly, lower sales will result in substantially decreased intakes of grapes in the Riverland, Riverina and Sunraysia areas which supply the bulk of the multi-purpose material. Thirdly, the price increases in Australian fortified wines will result in at least partial, if not total, substitution of lower priced imported fortified bulk wines for bottling in Australia. Fourthly, the financial effect of the requirement that duty be paid within seven days of usage cannot be sustained by Australian winemakers. Even if payment is deferred until just prior to the sale, the effect of the impost will be disastrous.

As I explain the reasons why the phones are running hot, we tend to forget what the human problems are. We have heard a lot of facts and figures quoted about possible reductions in the intake of grapes by the wineries. I have a number of letters here; I have piles of them back in my electoral office. I will read one which I think sums up the situation:

Dear Sir,

We received a letter from the winery to say that they will not be able to buy the wine grapes next season as the tax will be so hard on them they explained. To finance the excise on a product such as Cream Sherry would effectively increase the cost of the tax to $3.56 per litre of added alcohol in the wines. Winemakers in general and the one we supply in particular simply cannot produce finance and sell fortified wines under those conditions. Wine grapes are half our living, what we will be able to do as a result I don't know as water charges , rates, fuel, fertiliser, have all got to be met. I'm sure we cannot appeal to Government to pay the accounts. It's strange how Mr Whitlam's Government forced lots of small businesses to close down. Now the Hawke Government looks like putting wine grape growers on the dole. Our whole lot of growers are in the same plight as us. I know you will help if you can and we will thank you very much.

That gives one an idea of what a number of people, particularly in my area of the Riverina, are thinking. Another gentleman wrote to me but I think he might have been writing to the wrong person. He said:

I'm writing this letter to complain about the promise that you said in Griffith at the Yogali Club, about an excise tax of wine. Do you remember that promise and why wasn't it kept?

That promise that was announced at the Yogali Club it meant a real lot to all grapegrowers, because it's now about three years that the wine industry was going bad and now with the excise tax on fortified wine it means the wine industry will go bad for ever. I think you know about San Bernadino wines and Letona co-op we owned a lot of money from them. Or do you want that to happen and cause more unemployment. Why don't you try and come here and live our way of life and then you will see how it feels. Now that the excise tax on wine has come in force it means that the season of 1984, there will be a surplus of grapes about 25 thousand tons.

I am a small grape farmer and you are going to make all of us farmers go broke and suffer badly.


P.S. Please read this letter carefully and think about it. And write back please.

Yours faithfully

I have a letter from the Dried Fruits Association-

Mr Keogh —Dear Dorothy Dix.

Mr HICKS —I have hundreds of letters like that at home if people here would like to see them. I will not read the names of the people who wrote these letters because they are worried enough. They are really worried about their futures. One writer is worried about going on the dole. Of course, if one owns a property it is very difficult to go on the dole because one must stay on the property and still do the pruning and pay for the fertilisers, et cetera. So, it is very difficult for those people to collect the dole, not that they would want to.

I quote a letter from the Australian Dried Fruits Association:

As you are aware there are serious problems within the dried fruit industry as your recent decision to call an IAC inquiry indicates, and this decision to impose an excise tax on fortifying wine can only deepen the recession within the industry.

So everywhere we look we see problems with this excise. I think the only way to eliminate this difficulty is to rescind the decision and not to talk of just simply changing the method of taxation. I have a statement here by the Minister for Primary Industry (Mr Kerin) in these terms:

Mr Kerin said that the excise would remain.

But the Treasurer (Mr Keating) has indicated to him that if the industry as a whole wished to put a point of view on the method of collection of the excise as distinct from the imposition of that excise that view would be considered. If that excise stays on there will be some wineries, particularly in the Riverina and Murrumbidgee areas which will not take any wine grapes for spirit this year.

Mr SPEAKER —Order! The honourable member's time has expired.