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Thursday, 22 November 1973
Page: 3774


Mr STEWART (Lang) (Minister for Tourism and Recreation and Minister Assisting the Treasurer) - The Treasurer (Mr Crean) is unavoidably absent this evening on official duties and he asked me to make this short statement on his behalf:

I recognise that there has been a great deal of concern in the winemaking industry about the effect on the industry of paying* additional tax over the next 5 years until the valuation of stock in that industry is brought into line with the valuation of stock in other industries. Because of the special under-valuation of stock in the past, tax payments by this industry have been deferred at the expense of the other taxpayers of this nation. Let me make it clear that I have recently received messages from representatives of the industry that they realise that there was a discrimination in their favour in the old section 3U, that they recognise that this discrimination could not continue and that they realise that in no way is .mis removal of the discrimination and the payment of the deferred tax over 5 years to be construed as a substitution for the repealed wine tax.

The winemakers' concern relates to what additional amount from that deferred tax can be absorbed each year by the industry without the individual companies, which to such a large extent give the industry its special character, being left open for takeovers or otherwise to be forced out of existence. I state clearly that I understand that concern and share it. In no way does the Government, in bringing equity to these taxation aff airs, want to be responsible for a change in the form and character of this important Australian industry. In fact some believe that the removal of this discrimination will make wine making companies less attractive for takeover. I have received representatives from the industry introduced by 'the honourable member for Angas (Mr Giles). I have received valuable submissions from my colleagues, the Minister for Labour (Mr Clyde Cameron), the honourable member for Kingston (Dr Gun) and the Premier of South Australia, Mr Don Dunstan. In particular, I have received valuable advice from my colleague, the honourable member for Adelaide, (Mr Hurford), who has spent considerable time with officers of the Taxation Office in discussions on the technicalities of this complicated subject.

It is my belief, now shared by my coinages, that the concern has been promoted by a misunderstanding of the effect of this legislation. The Coombs report on the 'review of the Continuing Expenditure Policies of the Previous Government, June 1973' estimated - and published the information - that the value of the deferred tax enjoyed by this industry at 30 June 1973 was $15m. The fears of the industry have been based on an estimate of well over double this amount. With the help of the honourable member for Adelaide, we have had as much communication as possible - there are limitations due to the secrecy provisions applicable to the Taxation Office - with the wine makers. I have reason to believe that their worries have been removed, or at least reduced immeasurably. My advisers can find no reason to alter their original estimates, and I remind honourable member's that the deferred taxes are to be eliminated over a 5-year period.

There are 2 other particular points I wish to make. Firstly, taxpayers who are placed in a difficult financial position, even though the extra tax burden is being spread over 5 years, will be treated by the taxation administration with the sympathy always afforded in .these circumstances. Secondly, in adopting a stock valuation basis for wine makers, no pitch of perfection in valuation not asked of other industries will be sought. This is a practical matter to be determined by practical and reasonable methods. Whatever consultation and co-operation is needed to settle this matter has been and will be offered by the administration. I say this because of the fear abroad, which I have already mentioned, that some arbitrary and over-theoretical standards will be imposed on the valuations. I repeat: This is simply not right and the industry will be given every consideration while over the next 5 years its taxation situation is brought equitably into line with the taxation position of the rest of the industry. If any unforeseen circumstances arise which result in the position being different from that I have outlined, the wine making industry may be assured that the situation will be reviewed sympathetically.

I repeat that I have made this statement on behalf of the Treasurer who is unavoidably absent.







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