Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download Current HansardDownload Current Hansard   

Previous Fragment    Next Fragment
Tuesday, 4 September 1984
Page: 397

Senator SIBRAA —My question is directed to the Minister representing the Treasurer. I refer to the sales tax on wine announced in this year's Budget. Has the Minister's attention been drawn to confused statements from some areas about the future of that tax and to questions raised about the administration of the tax as it affects integrated wine makers and retailers? Can the Minister clarify these issues for the Senate?

Senator WALSH —I am aware that questions have been raised, particularly in Western Australia, about the treatment of wineries that make wholesale sales or conceivably do not make wholesale sales and sell the entire production over the cellar door. I can clarify that. There has been confusion about other matters concerning the 10 per cent sales tax on wine; in particular, the confusion within the Opposition and the confusion-indeed, outright contradiction and conflict-between the present Leader of the Opposition and Deputy Leader of the Opposition. Here in the Senate, I think it was two weeks ago or 13 days ago, members of the Opposition sanctimoniously raised a matter of public importance condemning the Government for imposing a sales tax on wine and I think they all voted for it, and then the next week at the National Press Club we had the discredited former Treasurer and present Deputy Leader of the Opposition standing up and saying that the wine tax was a good idea and Liberal government would retain it, after his leader had been running around for weeks saying that a Liberal government would repeal it immediately. That is a bit of confusion which, I am afraid, I cannot sort out, but I can sort out the confusion pertaining to the way in which the tax will be applied.

Senator Button —It is not your job to sort it out.

Senator WALSH —No, it is not my job to sort it out. In fact, it is a job that I would not like, because I think it is well beyond my capacity. The sales tax on wine, as with sales tax in general, will be applied at the wholesale level. There are cases, such as the integrated wineries which Senator Sibraa has mentioned, where there is in fact no wholesale transaction or at least no arm's length wholesale transaction. I am advised that the present intention of the Commissioner of Taxation is to apply the Act in the way I shall outline. I interpolate that matters of administration such as this are matters for decision by the Commissioner of Taxation at his discretion rather than matters for the Government by direct political directive.

I understand that the present proposal is that where a winery sells a portion of its product at arm's length to a wholesaler, all that winery's sales will be valued, for sales tax purposes, at the same prices as the actual wholesale transaction. If a winery does not make any arm's length wholesale sales of that type, the actual retail price will be used as a base for striking the tax, but only 65 per cent of the actual retail price will have the 10 per cent tax applied to it. So the tax converted to a retail level tax will be, in fact, 6 1/ 2 per cent and not 10 per cent. In my view, that is a very generous allowance because implicit in that decision is that the normal wholesale to retail mark-up in the industry is in excess of 50 per cent. I would be surprised if it were in fact that high.

There are a couple of minor matters. The taxation Act provides-I think the phrase used in the Act is 'goods for own use'- that, where the producer of a good consumes that good himself or within his or her household-in the case of a wine maker, somebody who is drinking his or her own product-that product will be subject to sales tax at either the actual wholesale price or the deemed wholesale price. I am advised that that will apply to wine consumed on the premises of a wine maker, whether it be a free tasting or something like that. Sales tax at 6 1/2 per cent of the retail price level, or the actual wholesale price level of 10 per cent, will be applied. However, wine consumed off the premises, for example, where a wine maker submits samples to a wine show conducted in another town, another city or, even conceivably I suppose, another State, will not be deemed as goods for own use--

Senator Chaney —Mr President, I take a point of order. As usual Ministers, this Minister in particular, simply use Question Time to make statements. If this Minister wishes to make a statement on this matter, why should he not make a statement at the end of Question Time in common with his colleague the Attorney- General?

The PRESIDENT —Order! There is no point of order. I call the Minister for Resources and Energy.

Senator WALSH —I do not know whether Senator Chaney objects to the facts being laid out concerning this matter. I can only assume that. He is deliberately trying--

The PRESIDENT —Order! I ask the Minister to answer Senator Sibraa's question.

Senator WALSH —I could answer it much better if I was not being interrupted by the Leader of the Opposition when I am giving important points of fact. Where goods are consumed off the premises in that way, at wine shows or in tastings, the sales tax will not apply at all.