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Thursday, 14 June 1984
Page: 3056


Senator MACKLIN(5.41) —I will speak now rather than in the Committee stage since the item that I wish to raise is connected, at least tangentially, with that raised by Senator Messner. It is a point that I have raised every year for the last three years and hopefully some action might finally start to be taken on it. It does not concern a large industry; in fact, it concerns a very small, struggling industry-that is, the wines which are made from fruit other than grapes. The whole sorry episode goes back a long way. Wine made from grapes is, of course exempt from sales tax. Wine made from fruit other than grapes attracts at the moment sales tax of 20 per cent. It arises from an interpretation of the Commissioner of Taxation, who has taken it upon himself to declare that wines made from anything other than grapes are not wines, and certainly not Australian wines, despite the fact that the technology of wine making and every other reference book that one can find states:

3. the juice, fermented or unfermented, of various other fruits or plants, used as a beverage, etc.: gooseberry wine . . .

Undoubtedly, wines made from fruits other than grapes are wines, are Australian wines, and are made by Australians who are attempting to develop an industry in this country, particularly in my State, from tropical fruits. While they are trying to establish an industry, the Government is trying to tax them out of existence. It will not touch wine made from grapes; but it will try to destroy people who are trying to make wines from any other fruit and trying to do so commercially.

This was first brought to the Government's attention in 1977 and intermittently thereafter. I took it up in 1980 and tried unsuccessfully through the Department of the Treasury to get a reply to my requests. I finally wrote to the then Treasurer. I received a letter from Senator Messner, who was then the Minister Assisting the Treasurer. He stated that the granting of a sales tax exemption had to be taken into account in the overall economic strategy. Since the total amount of money that had been made in the previous year was about $3,500, I assumed that the letter was a joke sent by somebody because it was around about April. I did not believe the entire economics of Australia were about to fall to the ground because we were not going to put sales tax on something that had created a $3,500 profit. So I tried again. This time my query must have gone to some other person in the Department or the Minister's office who also fancied himself as a practical joker, because this time the response was that it would destroy GATT. The General Agreement on Tariffs and Trade would collapse about our ears if we did something to assist this small, struggling Australian industry. I thought that that was a joke and I put it in the waste paper basket too.

I then decided on a different tack and that was to take it up in the debates on the amendments to the sales tax legislation. I will not go on with the story, but the next time I took up the matter was in 1982 and again in 1983. In 1983 Senator Walsh gave a totally different response which was even more confusing than the last one. He suggested that there was a valid case and that movement ought to be made towards a greater degree of tax neutrality than presently existed. I thought that we would get somewhere, but he then said the Government was not going to do anything about it. That brings us again to 1984. I expect that the next chance I will have to raise this will be during the Budget session when, in fact, I do intend to raise it if I cannot get any assurances that this particular problem will be considered with some sympathy and genuine understanding. A small group of people are being driven out of what could be a very useful business. There are only about three of these wineries established around Australia. Only one winery producing commercially from tropical fruits operates in my State. I understand that one winery in New South Wales produces from other fruits and one produces mead from honey. Those wineries are all in the same position.

In every case those commercial wineries are a tourist attraction. The one in Queensland, for example, is in Bundaberg. It is set up as a tourist attraction. It is attempting to operate as part of the tourist sector in Bundaberg. I would have thought that the Government's new-found interest in tourism might also have led it to think that these wineries might be considered useful tourist attractions. The Government's rhetoric in relation to small business might also lead it to look at this, because this is small business. Almost inevitably, only one or two people are involved in these wineries, yet they are paying 20 per cent sales tax when all other wineries are not paying any tax at all. Surely this is a matter of discrimination against a few small people. The world will not stop if nothing happens about this, but I can assure the Senate that those businesses will go out of business. They are just scraping by now. They are hoping that some sanity may appear on the horizon to rescue them and to assist them to make at least some profit in what could be a useful trade and a useful developing industry for Australia, particularly given our wide range of tropical fruits. I hope that the Minister may be more sympathetic than the Ministers to whom I have previously addressed this problem. It might give at least a glimmer of hope to the small business people if they believe they can make a living out of this.