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Federal government 'out of touch' with wine industry



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PRESS RELEASE THE SENATE

S&natoa Tony MettneA Commonwealth Pa/ilicunent 0 ^ 1 cet 1 King dU-ttiam S tre e t ADELAIDE S.A. 5000

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FEDERAL GOVERNMENT 'OUT OF TOUCH1 WITH WINE INDUSTRY

The Hawke Government was clearly out of touch with the realities of the

wine industry, it has been stated.

Senator Tony Messner (Lib SA) made this claim after receiving a letter

from the Minister assisting the Treasurer (Mr Hurford) answering his

representations on behalf or winemakers.

“The Minister acknowledged the fact that the excise had been imposed to

step 'potential' excise avoidance. If we legislated for every conceivable

potentiality, we would be in a sorry mess."

"The simple fact is that the Government is now trying to use an efficiency

audit report by the Auditor General to justify its increase in tax."

Senator Messner said that he was disappointed that a South Australian

Federal Minister was prepared to back the excise move.

"Over many years South Australian MP's of all parties have recognised

the importance of the wine industry to this State. . I am sorry that

this bi-partisan approach has been rejected by Mr Hurford."

Senator Messner said that he was bitterly disappointed that the Minister

refused to consider changes to the way the excise is to be collected.

In his letter, Mr Hurford stated:

"Alternative methods of collection of the excise, canvassed in discussions with the industry, were found to involve considerable administrative problems."

"In other words the Government is prepared to put its administration

above the interests of the wine industry."

"The whole tone of the Minister's letter is unbelievable. It is fairyland

stuff."

"His statement that the The Government did not believe that the price

increases flowing from the excise would be unreasonable burdens on the

industry or consumers, is incredible."

"The industry has made perfec tly clear the problems that the excise

will impose on it."

"Its about time the Government listened to the industry and not the

so-called departmental experts."

ADELAIDE 18 NOVEMBER 1983

T R E A S U R E R

Senator the lion A . J . ί V sar.er Parliament House CvV.'QSRRA ACT 2GC0

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17 NOV 1983 1

Dear Senator Mcssne:

6 September 1983 I refer to your personal ropronontutione to toe "rear,urer *3Î’3*βΕΚ33Ρ”ΈΕ3!ϋ3Ε

ccr.cerr.ing the imposition ct an excise duty on for L ι fy iTiy spirit in the 1933-01 Budget. I also refer to your statements made i the Senate in the adjournment debates on 5 4 and 2 5 August 190 3 cr. the same matter.

The Budget provided tor U.u re-imposition of an excise on grape spirit used £::r fortifying wine (ports, sherries, etc) at a rate c£ £2.51 per litre o£ alcohol. The previous excise on grape spirit was abolished when excise was imposed on Australian wine in 1970; the excise was not rc-imposed when

excise c;i wine was removed in 1972.

i*he purpose of the re-i r.t roduct ion of the excise was to lessen excise avoidance possibilities, simplify administration and yield revenue.

Spokesmen for the pc table spirits industry had recognised the potential for excise avoidance and had recommended that it be reduced by imposition of a £2 per litre of alcohol excise on fortifying spirit. These recommendations had been put to the previous Government and to this Government and, since the Budget, r cpres vn t a t i or. s have been received urging the Government not to change its decision in this matter.

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Members of the industry directly involved in the production of fortified wine, however, made representations to the Government to the effect that the excise rate imposed, and its method of imposition, would cause serious disruption to

the industry. The Government has fully considered those representations and discussions hove been held, with the industry with a view to finding ways of meeting their

concerns as well as the original objectives of the measure.

As a result of those discussions, the Government has decided to reduce the excise to £l.50 per litre without changing the method of imposition originally announced. Alternative methods of collection of the excise, canvassed in discussions

yith the industry, were found to involve considerable administrative problems. At this rate of excise t.ne prime purpose behind the initial decision will still be .adhered to.

The reduced rate of excise will be made retrospective to Budget night. Those producers who, since Budget night, have paid excise at the rate of 42.61 per litre will receive appropriate rebates.

The lower rate of excise should significantly reduce the . ' [concerns expressed by the industry. It will represent an "excise component in a 750ml bottle of fortified wine of approximately 19 cents. There are, however, substantial

profit mark-ups at the wholesale and retail level and, should those mark-ups be fully maintained, the increase in the retail price of a bottle of fortified wine would bo greater than that amount. While noting that domestic table wines

remain free of tax, the Government does not consider that the indicated price increases on fortified wines will impose unreasonable burdens on consumers or the industry.

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Y o u r s s i n c e r e l y

Cm ilS UURIORD. _

CHRIS HURFORD Minister Assisting the Treasure