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Tuesday, 19 March 1985
Page: 380

Senator COOK —My question is directed to the Minister representing the Treasurer and representing the Minister for Primary Industry. Is it true that, since the 10 per cent sales tax on wine was imposed, actual sales of Australian-made wine have increased? If it is true, can the Minister say whether the Government intends to resist the temptation to help our wine producers further by upping the amount of the tax?

Senator WALSH —I will certainly take note of the suggestion at the end of Senator Cook's question and seek the Treasurer's view on it. Senator Cook's main question was: Is it a fact that wine sales have increased since a sales tax-a very much overdue sales tax-was applied in the Budget last year? The answer is yes. The figures available from the Australian Bureau of Statistics go only as far as December and, therefore, it is reasonable to expect that they may be subject to some marginal adjustment at a later time. Those figures show that the total sales of Australian wine for the quarter ended December 1984 were 4.2 per cent higher than those for the same quarter of 1983, notwithstanding the fact that there was a very big sales peak in the month of August 1984. Therefore, one would expect some negative effect on sales in the months immediately succeeding that. That figure of 4.2 per cent is identical to the growth in sales in 1983-84 as a whole over 1982-83. In other words, on the indications so far, the trend of growth in wine sales has not changed as a result of the sales tax imposed in the Budget. Of course, this is completely at variance with the hysterical claims made principally by Senator Messner-but not only by Senator Messner-when on 23 August 1984 he moved to debate the following matter of public importance:

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

He was as wrong about that as he normally is wrong about anything I can think of. Since evidently the members of the Opposition want to hear a little more about what they said only a few months ago concerning a tax on wine, I will quote Senator Hill, who said:

It has been estimated that up to 4,000 jobs in South Australia could be lost by this tax which, as my colleague said, will result in a comparatively small amount of revenue to the Government.

Since there has been no effect on the growth trend of sales, it is difficult to see how any jobs could have been lost, let alone the 4,000 that Senator Hill hysterically suggested in August of last year.

Senator Gietzelt —What did Teague say?

Senator WALSH —I do not know whether Senator Teague was also interjecting but this is what he said in September of last year:

When the Australian people see grapes still on the vine, see thousands of jobs lost and see the penalty, particularly in my State of South Australia, let them then expect the Government to lose votes and suffer a real penalty.

His political judgment is about as good as his economic judgment because what happened was that in the Barossa Valley there was a swing to Labor. So not only is he ignorant of economics but also he is ignorant of politics, it seems.

Finally, I add that the same ridiculous assertions that were being made by the Liberal Party of Australia were also being made by the Australian Democrats who, of course, as always, are eager to pick up ten votes from any single issue group--

The PRESIDENT —Senator Walsh, you are tending to debate the matter now. I suggest that you confine your remarks.

Senator WALSH —They know that they will never be called upon to accept responsibility. The elasticity of demand for wine had been assessed by the Bureau of Agricultural Economics, or particularly by Mr Tsolakis of the BAE, who had predicted that in the short term there would be a decline in sales of 4 per cent pursuant to a 10 per cent wholesale sales tax and in the medium term a decline of 14 per cent. Needless to say, the Opposition immediately misrepresented Mr Tsolakis's findings and said that there would be an immediate decline of 14 per cent, which was a misrepresentation notwithstanding the fact that in my view-I said this at the time-Mr Tsolakis's estimates were always, to say the least, suspect. In the light of the evidence available today, they certainly ought to be treated with a great deal more caution than they have been treated with in the past, leaving aside the gross misrepresentation of Mr Tsolakis's estimates of the type practised by the Opposition last year.