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Thursday, 23 August 1984
Page: 278


Senator TEAGUE(4.51) —All the State parliaments that are meeting in Australia are unanimous that this new tax imposed by the Hawke Labor Government is an unjust tax. In the Budget presented on Tuesday night $62m in a full year was levied on this important Australian industry, half of which is in the State of South Australia. It is no accident that all four Liberal senators from South Australia have participated and protested in this debate in the Senate today. Only one Australian Labor Party senator from South Australia was even in the chamber. He was prepared to speak. He admitted that he suggested that there be this sales tax. As for the Australian Democrats, they have not been present at all for this debate this afternoon. They in fact support this tax on wine. They think it is justified, however much damage it does. Only the Liberal and National Party Opposition protests, along with all the State parliaments of Australia, the entire wine industry and the consuming public of Australia, that this unfair tax totalling $62m has been laid upon wine after a decade of there not being any such federally imposed sales tax on wine.

The wine industry in Australia is very important. Some 662,000 tonnes of grapes are produced annually in Australia; at least, that was the figure in 1983. Over half of this-430,000 tonnes-is put to wine making. It is estimated that 65,000 tonnes of this will be lost as a direct result of this sales tax on wine. Of the 430,000 tonnes, 65,000 tonnes will be left hanging on the vine. This is because the impact of the higher price to the consumer because of the sales tax will lead to a drop in consumption estimated to be 14 per cent. There has been some debate as to how this figure of 14 per cent has been arrived at. On page 4 of the Budget submission of the Australian Wine and Brandy Producers Association an example is given. It gives the example that if there were to be, say, a 10 per cent increase in price, 'sales of wine could be expected to fall initially by 4. 3 per cent and after a longer period to a level 13.5 per cent below the original level'. But beyond this there will be a stocks decline which is a flow on of that new level of expected sales so that the present stocks in retail outlets for wine will satisfy the market more adequately and there will not be buying up to replenish stocks. So there will be a marked impact upon grape growers and producers.

In Australia there are some 5,000 grape growing establishments. Some 8,000 persons are directly employed in the industry. Will 1,000 of those jobs be lost? It will be at the feet of the Hawke Labor Government that those 1,000 Australians working in the industry will have lost their jobs. More than half of them, I am afraid, will be in my State of South Australia. That is why four Liberal South Australian senators are debating this issue and protesting so strongly here today. There is an estimate that about 20 litres per capita of wine is consumed in Australia and that the retail value of this wine is greater than half a billion dollars. Indeed, on the Government's own estimate it must be greater than $600m, as the sales tax is estimated to raise $62m in a full year.

I can see that the Government can easily trot out simplistic arguments to the effect that it wants revenue from any quarter that might be found, but has it taken into account the impact upon the industry and upon jobs, principally in areas of South Australia? It has not, and that is why we protest. It is all very well for the Minister for Resources and Energy, Senator Walsh, to try to give some simplistic economic arguments about one particular industry or to compare wine with beer or soft drink, or with milk for that matter, which he did not raise, but I believe the measure that the Senate and the Government must have in this debate is the measure of what the actual impact will be on the wine industry and on those persons employed in the industry. It is estimated that this fall in consumption of some 40 million litres of wine, or 65,000 tonnes of grapes left on the vine, will cost producers $15m per annum. That is just the cost to producers. What a handy coincidence it is that this is exactly the amount that was expected to be raised by the excise on fortified wine in the last Budget. The fortified wine excise and this sales tax on wine are both directly contrary to this firm Labor promise at the last election:

Labor will not-

the words 'will not' are underlined-

impose a sales tax or an excise tax on wine.

This statement was given by the primary industry spokesman, Mr Kerin. At one stage in South Australia he was accompanied by the honourable member for Kingston, Mr Bilney. I quote what Mr Bilney said in the House of Representatives after the first reneging on that promise in the 1983 Budget. As reported in the Hansard of 25 August, he said:

The honourable member for Wakefield (Mr Andrew) in his remarks referred to the fact that I appeared on a platform with the then shadow Minister for Primary Industry, Mr Kerin, in McLaren Vale during the election campaign. It is quite true that on that occasion I appeared on that platform. The promise was given to the wine industry that there would be no sales or excise taxes on wines. I regard that promise as being completely honoured as a result of this Budget.

That was nonsense. It was not completely honoured. Where is there a bush or a shed big enough to hide Mr Bilney now? Is he claiming that that promise is completely honoured in the 1984 Budget? Is he saying that this direct sales tax on wine completely honours the promise that was given by the ALP in that 1983 election campaign? Of course he is not, but he is going very close to it when he says that it is inevitable that there would be such a tax. He is reported as saying this week in response to the Budget: 'I am not surprised. I regard such a sales tax on wine as inevitable'. He is saying that he regards the word of the Labor Government Prime Minister (Mr Hawke) and the Minister for Primary Industry (Mr Kerin) as not worth one cent. He is even regarding his own word as not worth one cent. The Labor Government has completely debased the firm promise that it gave to the wine industry and all South Australians who are affected by this measure.

Where is the Government's credibility with regard to these matters? It has added insult to injury by announcing that there will be a full comprehensive inquiry into the wine industry, beginning this week, after-not before-this wine tax has been imposed on the industry. As another insult, the Government has let off imported wines, giving them an easier passage. There is less of a barrier for imported wines coming into Australia. During the past five years, imports of brandy have risen to capture 25 per cent of the Australian market. Will that happen during the year of this Budget? Will that happen with the easy ride that the Government has given to imported wines?

During the debate today, the Minister for Resources and Energy said that he did not have any answer to the statement that the Labor Party had broken its promise so flatly. The honourable senator did not make any beginnings of an excuse for the Labor Party having broken its promise. At one stage, during an exchange with Senator Withers, the Minister said that the Labor Government's record was not much worse than the previous Government's record. He said that the Burke, Bannon and Cain governments were economically illiterate. The Minister said: 'Not just you Liberals but those other Labor governments in the States which are protesting about this wine tax are economically illiterate.' Let that statement be known to those governments and let us see what they have to say about the honourable senator from Western Australia.

The Minister was so fully prepared to defend this decision that he claimed in his speech today that no more equitable tax than this wine tax exists. Senator Elstob, unashamedly, said that he was involved in this matter not so much as a senator for South Australia but as a senator for all Australia. That is his judgment. I believe that in a matter such as this, which is so vital to South Australia, he could have stood up with the four Liberal Party senators to protest as Mr Bannon and the entire Labor membership in the House of Assembly in my State have done; but I shall give credit to Senator Elstob for coming here to admit honestly that he had suggested that a sales tax on wine should be imposed and had said so to the industry. The honourable senator has been honest and straightforward in this matter. He was not accompanied in the debate by any other Labor senator from South Australia nor an Australian Democrat.

Senator Cook said: 'After all, this is a small matter' as if that were an excuse to defend this total reneging on the Labor Party's firm promise prior to the election. Somehow the honourable senator deduced, as another defence, that our protest today showed only that Liberals hate beer drinkers. That is nonsense , as anyone who knows the Opposition could demonstrate. We are in favour of those who drink milk, soft drinks, beer or wine. We cannot be called haters of beer drinkers.

Protests about this matter have not been made by any of the Labor members in my State of South Australia or, to my knowledge, by any Government member from any of the States. Where were Senators Bolkus, Crowley, Maguire and Foreman today? What will they say when the people of South Australia put it to them in the coming Senate election that they did not stand up for South Australia but gave in to a Hawke Labor Government Caucus decision and merely bleated: 'The tax is inevitable and, therefore, we will not protest'? Their Labor colleagues in the State governments are protesting to the hilt in the State parliaments, but there is not a protest from any of those government members.

The Special Minister of State (Mr Young), the honourable member for Port Adelaide, was stood down from the Cabinet over the past month or so. He was the only South Australian supposed member of the Government who was in the Cabinet. During the period he was absent from office when there was no voice for South Australia, this decision was made. It has led indiscriminately to suffering in South Australia. That is why the Bannon Government, prodded by Mr Olsen, the Liberal Party leader, and the entire House of Assembly are protesting about this matter. They cannot thank Mr Young; he was not there.

We conclude that this new wine tax is a deliberately broken promise of the Hawke Labor Government and is directly contrary to its election undertaking in March 1983. That will not be forgotten by the Opposition or the wine industry. This new $52m tax will wound the wine industry and cause 65,000 tonnes of grapes to be left on the vine and perhaps 1,000 jobs to be lost. More than half of this damage will take place where 60 per cent of the wine is produced in this country -in my State of South Australia. I join with all members of the Opposition in protesting at this tax most vociferously.