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Thursday, 28 March 1985
Page: 965

Senator MESSNER —My question is addressed to the Minister for Finance. Do Australian Bureau of Statistics figures for wine sales, cited by Senator Walsh in answer to a question asked by Senator Cook yesterday, cover only litreage sold by very large wineries with sales over a quarter of a million litres per month? Does this partial survey exclude smaller wineries and are those not the sufferers of the introduction of the 10 per cent sales tax, as predicted by Liberal Senators Jessop, Teague, Hill and Messner? Have not sales been artificially boosted for bulk wine by price cutting and marketing practices of larger wine makers in a bid to rationalise inventories in anticipation of a fall in sales later on, exactly as predicted by Senators Teague, Hill, Jessop and Messner? Is this not confirmed by the collapse in growth of rates of sales, as shown by the partial figures, since the August Budget? Finally, has not the growth in sales of Australian wine been severely restricted by the growth in imported wine-an increase of some 30 per cent-as a distinct result of the double whammy of the sales tax and the decrease in protection?

Senator WALSH —Regarding the last point, there has been a significant increase in imported wine. In spite of that sales are growing at a faster rate than they had been growing in the previous year. I have noted Senator Messner's attempted revision of history. Whereas he and all his colleagues were asserting nine or 10 months ago, whenever it was, that there would be a 14 per cent-not 10 per cent, as he now claims-decline in sales because of a 10 per cent sales tax, they are now trying to stick that on to a couple of tin pot small wineries and say: 'We were only talking about them and not about the industry as a whole'. As to the figures which I cited yesterday and at some earlier time, I do not know whether all wine sales were included, but the overwhelming majority-this is subject to check, but it is at least 95 per cent-were included. The same wineries were measured this year as were measured in the previous year. If one wants to test the effect of the sales tax on sales, one has to look at the year on year comparison measurements of the same thing. What that shows is that for the month of January this year sales were 5 per cent higher than they were for the month of January in the previous year. That rate of growth exceeds the rate of growth in the year 1983-84 on 1982-83, the last full year before the sales tax was imposed. For the three months ended December 1984 the rate of growth exceeded the rate of growth in December 1983 by a higher margin than 1983-84 sales exceeded 1982-83 sales.

Senator Messner asked whether sales had been kept up by price cutting. Price cutting is probably going on. It is not new. It has been going on for as long as I have taken an interest in wine. This is one of the important factors when considering the effect of a quite small impost on total sales. At any time, I venture to suggest, in any reasonable sized city it is possible to go from one grog shop to another and find price variations greater than 10 per cent, even at the retail level, for exactly the same wine. That is another way of demonstrating the relative insignificance of a wholesale tax of 10 per cent.

For the handful of tin pot wineries that may not be included in these figures, I will find out for Senator Messner whether the figures I have cited represent 95 per cent or 99 per cent of total sales. Whatever they are, they are based on the same measurements, one year on another. They show that since the wine tax was introduced sales have increased at a faster rate than they had been increasing previously. I am certainly not suggesting that the fact that the wine tax has been imposed is the reason sales have increased at a faster rate, but there is absolutely no evidence to support an assertion that it has significantly depressed sales-or indeed depressed sales at all-let alone to support the ridiculous assertions made by Senator Messner and his colleagues a year ago that as a result of a 10 per cent wholesale sales tax, sales would fall by 14 per cent.

Senator MESSNER —I ask a supplementary question. Does the Minister confirm that the current price cutting, which he has now acknowledged, is all part and parcel of the fear of wine makers that the worst is about to come?

Senator WALSH —I certainly will not confirm such patent nonsense. If anything, it is even sillier than the sorts of claims Senator Messner made last August.