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Thursday, 23 August 1984
Page: 263

Senator MESSNER(3.15) —The matter of public importance today is as follows:

The imposition by the Hawke Labor Government of a tax on wine and the disastrous impact such a tax will have on the Australian wine industry.

The arrogance of the Hawke Labor Government is nothing short of amazing. It has become manifest and clear to the public of Australia in the decision to impose a tax on the wine industry. It is also nothing short of amazing that South Australian Labor senators have not seen fit to take part in this debate, except for Senator Elstob who will speak later. It is highly significant that Senator Elstob will take part in this debate because he is the only senator on the Government side who has a clean record on this matter. He has been put up as the shield for the four Labor South Australian senators who know that they will have to crawl back to their mouseholes in South Australia and disappear into the woodwork as a result of this decision. Senator Elstob made his position quite clear on 20 October 1983. I suppose we can point the finger at him and accuse him of having given the idea to the Government. On page 1874 of the Senate Hansard he is recorded as saying:

I believe that the industry-

he is talking about the wine industry-

would be well advised to accept some form of tax such as a sales tax.

What happens? In the first Budget after he had stated those words there is a sales tax on wine.

Senator Walsh —He is very influential.

Senator MESSNER —This is from a South Australian senator who obviously, as Senator Walsh acknowledges, is extremely knowledgeable and influential in the Labor Caucus. As I understand it, from his position of leadership of the Labor Party Senate team from South Australia, he would have a vast amount of influence with the Prime Minister (Mr Hawke) and the Treasurer (Mr Keating). As I said, Senator Elstob is clean on this matter and has been put up by the Labor Party to justify his own position probably but, more importantly, to shield from public opinion his four Labor Party colleagues who have not got the guts to stand up in this place and defend the Government's decision, which they know will destroy vast sections of the wine industry in South Australia. If Senator Geoff McLaren were still in this place-we all remember his real interests in the problems of South Australia-he would be on his feet crying out loudly about the problems that this tax will create in the Riverland of South Australia, but there is not a peep out of the Government senators. With the exception of Senator Foreman, they are not even willing to come into the Senate chamber to hear this debate. They will not face up to their responsibilities to the electors of South Australia. Clearly, they are going to find themselves in desperate trouble when the Senate election comes around, which we are promised will not be too far away .

Senator Jessop —They are discredited.

Senator MESSNER —As my colleague Senator Jessop reminds me, they are totally discredited already on this issue. Not only is Senator Elstob, who now takes the chair rather cleverly, in a position of being criticised on this matter, we also have Senator Crowley, who, upon the introduction of the Government's former infamous tax on grape spirit brought down in the Budget last year, denied Opposition senators the right to raise this question in this chamber by refusing leave for us to debate that matter. I am sure that Opposition senators-Senator Jessop in particular is nodding his head-agree that Government senators, Labor Party senators, will not face up to their responsibilities. It will be interesting to see what transpires later when the Labor Party senators come to their preselections. Yesterday in Adelaide, in the House of Assembly of the South Australian Parliament, the Labor Premier of South Australia, the Honourable John Bannon-I quote from the Hansard report of the wine industry debate yesterday-said that this wine tax:

. . . will . . . have a disastrous effect on the growth of a key South Australian industry, but will . . . disadvantage regional economies within the State and particularly hinder the redevelopment and reconstruction programme which the South Australian Government has initiated in the Riverland.

Mr Acting Deputy President, I draw your attention to that matter because it may be your preselection which is at stake, since the Premier is obviously ill- disposed towards the actions of Labor Party senators in not standing up for the State of South Australia on this matter. Let us just consider for a moment the words of the Premier. He talked about the Riverland and the regional effects of this wine tax. That, of course, is the most disastrous effect of this new tax. It is true that members of the Labor Party at the Federal level have always regarded the wine industry as some kind of Mickey Mouse industry. They have never really taken it seriously. This emanated from the leadership this afternoon during Question Time, when even the Deputy Leader of the Government in the Senate, Senator Grimes, referred to the wine industry in the most disparaging of terms and claimed that those people who were opposing the wine tax were somehow supporting tax evasion. That, of course, is absolute nonsense. The references by other Labor Ministers on this matter obviously indicate their shortness of sight on this matter.

I return to the question of the Riverland. The Riverland, as honourable senators know, has been developed over 100 years or so through the irrigation techniques developed in the later part of the nineteenth century. The grape industry has become a vital part of that area. We know how important it is to South Australia's economy. The fruit growing industries, the grape growing industries along the River Murray have tied with them, most importantly, the tourism industry, which is also vital to South Australia's economy. The wine tax will impose enormous hardship on the people of the Riverland. The people in the grape growing industries in the Riverland have small plots, small blocks of land on which to grow their vines and produce their grapes, which very largely are sold to co-operative wineries in the area-not to great combines of proprietary interest owned by overseas people but, of course, to representatives of the growers in the districts. These small growers will find under the impact of this tax that they will not be able to sell 65,000 tonnes of grapes in the forthcoming vintage in March of next year. Something like 10 per cent of their total vintage will hang on the vines and rot. Not only will the effect be felt by the grape grower himself, which obviously will cause him financial problems but also it will obviously lead in many cases to growers being forced off their properties and consequently, quite possibly, on to the unemployment benefit. Can somebody in the Government please explain to me how that will benefit the nation and, in particular, South Australia?

Let us consider the other impacts upon the wine makers, those whose job it is right across the country to produce, package and sell the wine. All of those people will be significantly affected. In fact, the wine industry itself has said that the impact in the longer term as a result of the introduction of this tax will be a decline of 13 1/2 per cent of its total market. That means a reduction of a proportionate amount in the value added, the amount of money that flows to South Australia. That means that everybody in the State ultimately will be affected by this fall in the sales and production of wine in South Australia. That is the impact it will have. Obviously it will depress the economy. It is as though the Government picked out South Australia for mistreatment in this Budget . Obviously we have not delivered enough Labor Party seats to the Federal Parliament and now the Government has given up hope and wants to go back to the old steps and perhaps restore a few Liberals back in the State. That is now almost guaranteed in the next Senate election. The Liberal Party will secure an extra Senate seat as a result.

Let us have some regard to some of the promises that the Labor Party made on this matter. Can we think back to those halcyon days before the election in March 1983? Do we remember what the Prime Minister whose office is in the corner of this building said in Griffith on 20 February 1983? The newly elected then Leader of the Opposition said:

The wine industry is beset with problems. The industry is faced with the need to make bold decisions at a time of low profitability, if the industry is to be in a position to meet the opportunities of the 1980s.

Then he went on to say:

Labor is pledged-

I emphasise the word 'pledged'-

not to impose a sales tax or an excise tax on wine.

If that is how much we can believe this Prime Minister, we cannot have much faith in any other of his promises. Later, at a meeting in McLarenvale south of Adelaide in the Southern Vales wine growing area, the now Minister for Primary Industry, Mr John Kerin, in the company of Mr Gordon Bilney the now Labor member for Kingston said:

Industry will welcome Labor's pledge not to contemplate a wine tax.

If the result of all of this is contemplation we wonder what will be the reality when the Government finally gets around to doing something about a wine tax. I mentioned that this was said in the company of the now honourable member for Kingston, Mr Gordon Bilney, who had the temerity in public yesterday, as quoted in today's edition of the Sydney Morning Herald, to make the following remark upon the impact of the wine tax on South Australia. The article stated:

The Labor Member for Kingston, Mr Gordon Bilney, said yesterday he was surprised that the tax was imposed this year, but he regarded such a tax as inevitable.

He regarded it as inevitable! How is it that he regarded it as inevitable when his Prime Minister and his now Minister for Primary Industry in the course of the election campaign were pledging that there would be no wine tax? By what twisted logic and tautology of language can he suddenly transfer that pledge into an understanding that there would be a wine tax? Because we have seen so many broken promises in the last 18 months I can understand how members of the Labor Party can change their opinion at a moment's notice. But for this statement to emanate from an honourable member who relies on the interests of the wine growers in his part of South Australia for support, for him to come out and claim that he knew this, means that he must have been lying to his community and lying to the wine growers of the Kingston area and the Southern Vales area of South Australia and misleading them as to the Government's intentions. As a result the honourable member deserves to be thrown out at the next election, and we shall ensure that he is.

It is important to realise that not just South Australia is involved, although certainly 5,000 people are directly involved in the wine and brandy industry in that State. That represents roughly 40 per cent of the total work force in the wine and brandy production industry. For that reason we acknowledge that other parts of the Commonwealth are directly affected. There is the growing fledgling wine industry in Western Australia-Sentor Walsh's and Senator Cook's State. I wonder how those honourable senators will explain this wine tax to their constituents in Western Australia. Honourable members representing Labor-held seats such as in the New South Wales electorates of Calare and Hunter, which is represented by Mr Robert Brown, in the Victorian electorate of Bendigo which is represented by Mr Brumby, and in the Western Australian electorate of Moore, which is represented by Mr Blanchard, will have to explain to the people in their various electorates why they think a wine tax should be imposed. I should like to hear their explanations because, as I have just said, thousands of jobs are tied up in this issue.

Senator Walsh —Utter rubbish.

Senator MESSNER —There are 12,000 jobs throughout Australia directly tied up with the wine industry, as the Minister knows. Many more people rely on the wine industry through tourism, the sale of goods at retail level, restaurants and the hospitality industry. As the Minister knows, many thousands of people rely on wine for their income and their economic development. All of those elements will be placed at risk because of the very arrogant and ill-considered proposal which this wine tax represents. That is why the Liberal Party will oppose the wine tax tooth and nail.

I shall finish my speech by once again explaining to people why a wine tax is so inimical to the interests of the wine industry. The Australian Labor Party certainly does not seem to be able to understand that reason. In the wine industry brandy production and wine production are very closely integrated. The fact is that it is some seven years, between the planting and the first picking of grapes, before a vineyard can be tested. Then, of course, the vineyard proceeds to the production of the wine. Some wine is put down for several years for maturation and, in the case of brandy, for many more years than that. A large cost is incurred all the time that this process is going on. The amount of money invested in the wine is building up. Finally, the wine and brandy is sold. Then and only then is profit realised from the produce.

The grape and wine industry is highly integrated. It is dependent upon variations in the seasons in the same way as any other primary industry. Over the decades the industry has established a way of looking after itself by ensuring that surplus grapes in a good year are set aside and made into brandy or spirit. The wine spirit is then used in the production of fortified wine in not so good production years. In that way, local employment levels have been kept up. People have been kept off the unemployment benefit and local communities have been kept going. Other industries have been able to develop locally around those communities. For that reason we support the wine industry, particularly in South Australia. We have seen what has happened during the past 100 years in the development of our State as a direct result of the wine industry and the way in which that industry develops other industries around it. The wine industry is the catalyst for economic development in South Australia. We believe that this Government is out to destroy that industry.