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Monday, 30 August 2004
Page: 26737

Senator SANTORO (9:26 PM) —The incorporated speech read as follows—

In speaking today on the Tax Laws Amendment (Wine Producer Rebate and Other Measures) Bill 2004, I want to make some brief remarks about the Australian wine industry in general and about Queensland's growing part in this enterprise.

Australia's wine industry has moved well beyond being a boutique contributor to the world market to become—as the fifth largest world producer—a formidable competitor.

Its commitment to exporting continues to grow. In 2002-03, there was a 21 per cent increase in the number of licensed exporters over the previous year—and an 18 per cent growth in wines inspected for export.

We are the second largest wine exporter in the World Wine Trade Group—it comprises Argentina, Australia, Canada, Chile, New Zealand, South Africa and the United States—and the fifth largest by volume in the world.

In 2002-03, the total annual volume of wine exports passed the 500 million litre mark (in May 2003) and 2002-03 ended with a record total annual volume of 508 million litres.

Total free-on-board value of wine export approvals for 2002-03 was nearly $2.4 billion.

Queensland has a modest place in this bonanza.

A modest place, but a growing one: and one that has some remarkable success stories to tell.

The state's winemakers can be broadly classified in three segments:

Small, boutique producers—under 50 tonnes annual production—and the largest sector.

Medium producers—50-200 tonnes.

And large, commercial producers, those over 200 tonnes production annually—there are four of these.

Latest available Queensland statistics show that both wholesale and export sales of Queensland wine have grown dramatically over the past three years.

Over this period 12 Queensland producers have exported to 13 countries.

This year Queensland winemakers are expected to produce around 4000 tonnes of grapes.

That's only 2 per cent Australia's forecast production.

Among the larger players in the wine industry in Queensland are:

Clovely in the South Burnett, which exports to the United States, China and Japan and has as its chairman Brisbane corporate lawyer Brett Heading, whose family has been farming in the district for a century. Its wines are available in the member's dining room here.

Sirromet at Mount Cotton on the outskirts of Brisbane, the brainchild of Queensland identity and businessman Terry Morris.

The Jimbour Station project on the Darling Downs, operated by the Russell Pastoral Company.

And the Granite Belt original, Angelo Puglisi, at Ballandean. By the way, my mother's maiden name is Puglisi.

I cannot let pass this opportunity, either, to mention the wine-producing efforts of another leading Queensland identity, Bob Carroll, a former president of the Queensland Liberal Party.

Mr Carroll has brought new business and new employment opportunities to the Boonah district in south-east Queensland—in the electorate of Forde held by my good friend Kay Elson for the Liberal Party—by investing in the development of a fine new winery, vineyard and restaurant.

It also has one of the most magnificent panoramic views of the mountains of the Scenic Rim that one could wish to see.

I know that he and his wife Marlene are very proud of this enterprise.

These are the kind of entrepreneurial people who will benefit from the incentive provided by this bill.

The Howard Government is all about adding value to enterprise and helping business—particularly small business, for which the Labor Party has no policies that spell anything other than disaster.

Adding value—in the quantum leap in export potential that it offers—is the principle behind another great Howard government initiative, the Australia-United States Free Trade Agreement.

Latham Labor really didn't like that agreement for ideological reasons.

That's the problem with the Labor Party. It is so encumbered with the baggage of its past.

The Howard government is about being positive and forward-thinking—and fair to business enterprise.

In the wine industry area, our workplace relations reforms—which the Labor Party foolishly wants to reverse—have freed employers to take on more employees in the cooperative, enterprise-oriented environment these laws establish.

The Australian Wine and Brandy Corporation has a budget of around $7 million a year to fund export promotions.

The Australian Wine Export Council assists in marketing campaigns in existing and emerging export markets.

The Howard government has assisted the industry in many ways, not the least of them by improving the trade environment and improving the domestic economic operating environment.

In particular, the tax reforms of the Howard government have had a positive impact on business and industry at all levels and in all sectors.

At the practical, industry level, the Department of Agriculture, Fisheries and Forestry regulates the operations of the two statutory authorities—the Grape and Wine Research and Development Corporation (GWRDC) and the Australian Wine and Brandy Corporation.

The GWRDC manages the research and development programmes for the Australian wine industry, funded through an industry levy with matching funds from the Commonwealth.

Another body providing major research is the Cooperative Research Centre for Viticulture, and its research programme was extended for seven years from 1999 by the Howard government.

From this positive position, the Howard government has brought forward the Tax Laws Amendment (Wine Producer Rebate and Other Measures) Bill 2004.

It is good legislation. It is a bill that will deliver a benefit to wine producers—by means of a new rebate on wine equalisation tax, or WET—and improve some compliance and administrative arrangements.

We need to use government policy, in this case tax policy, to boost private business opportunity. That's something else the Labor Party isn't good at.

But credit where credit is due. It is pleasing that the Queensland government has broken new ground among state administrations by appointing a minister for wine.

That is a commendable initiative that deserves recognition.

On this side of the chamber, we are fully aware that the most effective interface of government and business is found in good policy.

That is, in good policy that is designed to facilitate enterprise.

Not—most definitely not—in bad policy that puts the dead hand of bureaucracy on enterprise and which, under Latham Labor, would put a union organiser in every workplace for the benefit of the ALP's union paymasters.

The measures in this bill, as amended by the House of Representatives, flow from the 2004-05 Budget.

They provide around $338 million in financial assistance to wine producers over the next four years in the form of a producer rebate replacing the existing cellar door rebate scheme.

The measures include the accelerated depreciation of grapevines on and from 1 October 2004, bringing them within the same set of arrangements as apply to other horticultural plants.

The new wine producer rebate arrangements will give wine producers, or groups of associated producers, access to a maximum rebate of $290,000 each financial year.

It will effectively exempt the first $1 million of wholesale value of domestic sales each year.

Under this measure around 90 per cent of wine producers will receive a rebate that totally offsets any WET liability.

About 85 per cent of the benefits will be received by small wine producers—something that is exceptionally important in the Queensland wine industry.

Wine tourism is a primary driver of cellar door sales at wineries.

Many of these are small wineries such as those that enhance the tourist experience in the Granite Belt high country in the southeast inland of Queensland, in other parts of the Darling Downs, and in the burgeoning upland South Burnett region further north.

One indicator of economic expansion following agribusiness—in these case vineyards—can be found in this interesting little fact:

The formerly sleepy little hamlet of Goomeri in the South Burnett, now on the tourist map because of the cellar doors in the region, today has seven antique stores.

Growing grapes and making wine is as difficult a business as any other agricultural and horticultural activity in a place like Australia, where the climate plays nasty games with business plans and profit margins.

It is a tribute to the pioneers of the modern wine industry in Queensland that they persevered when confronted with great difficulty and have consistently added quality to the product.

That they have done so in prolonged drought conditions—the 2002-03 growing season was one of the most difficult on the Granite Belt since the commercial industry commenced in the area in the mid-1970s—is an achievement that merits both notice and reward.

Part of the reward that the Granite Belt and other Queensland winegrowers have earned is to get the sort of support from the government that the Howard government is making available.

A new publication, released this month—`Wine Tourism Uncorked ... A Guide to Making Wine Tourism Work For You'—is a key weapon in optimising returns for Australia's 1440-plus winemakers and the 144 in Queensland.

I understand every winery in Australia is getting a copy of the brochure, which has been produced by the Winemakers' Federation of Australia and the Department of Industry, Tourism and Resources as part of the $450,000 National Wine Tourism Strategy—another very worthwhile wine industry initiative supported by the Howard government.

While some may think Queensland is a newcomer to the Australian wine industry, wine has been produced in my state since the 1860s.

The State's oldest winery, Romavilla, also supplied several overseas markets last century and won awards for its wines.

The Granite Belt, which because of altitude enjoys a Victorian climate, kicked in as a market player in the late 1960s when Ballandean Estate was established.

For decades, descendants of early Italian pioneers had grown grapes and made wine in this area.

Winemakers were convinced that the soil—decomposed granite—combined with high altitude and cool conditions would produce premium wines.

They were not mistaken. The Granite Belt has earned an enviable reputation for its fine, full-bodied reds and very crisp wines.

Queensland wines are very distinctive. They are lighter, crisper, fruitier—specifically created to suit Queensland foods and the relaxed, outdoors lifestyle.

And as the record shows they have great export potential.

Italian settlers have played a significant role in the development of the wine industry throughout Australia.

Before closing I just want to mention one other family of pioneers of that provenance: the Casella family from the Riverina in New South Wales.

It was my pleasure recently to meet some of the fine people who are engaged in the business of Casella Wines and to learn the inspiring story of Filippo and Maria Casella, who came to Australia in the early 1950s.

Filippo and Maria travelled throughout Australia in their early years here. Filippo worked in the North Queensland cane fields and picked fruit in the Riverina—where they eventually settled in 1965, buying a small farm.

They established a winery there in 1969—and today three generations of Casellas work together producing among other vintages the Yellowtail label that bills itself as the essence of a great land.

In the early August sitting of parliament, Filippo and Maria's grandson Philip Casella and their son John Casella—Philip's father, author of the company's premium wine programme—visited Parliament House and spent some time in the public gallery watching the Senate at work.

Three generations of Casellas at work on their great family enterprise—that is the Australian story. That it is the migration story.

The company now exports 97 per cent of its annual production and was named Agribusiness Exporter of the Year in 2002 and 2003.

In 2003 it also won the Travelex Award for Export Entrepreneurship and in October of that year won the NSW Exporter of the Year award.

This month its biggest selling label, Yellowtail, hit a new high by winning the coveted Jimmy Watson Memorial Trophy for the best one-year-old red, with its 2003 cabernet sauvignon.

The Tax Laws Amendment (Wine Producer Rebate and Other Measures) Bill 2004 supports Queensland winemakers and others throughout Australia and will help them further build their businesses, employment opportunities, and value-adding options for their local communities.

I commend the Bill to the Senate.