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Tuesday, 5 May 1987
Page: 2648

Mr DRUMMOND(10.45) —There are 14 or so honourable members of the Opposition who represent wine growers in their electorates. At the same time, I cannot think of any member of the Australian Labor Party Government with wine producing areas in his electorate. This explains the level of absolute ignorance and lack of concern in the way the Hawke socialist Government has dealt with this industry. The latest statistics I can find are reported in the February 1987 Australian Bureau of Statistics bulletin. It says:

In the month of February 1987

Total wine sales was 19.5 million litres, an 8.8% decrease from sales in January 1987. By contrast, the January to February sales increased by 8.7% in 1986, and 18.4% in 1985.

That, I believe, is the start of a significant decline in sales due mainly to crippling Federal Government imposed taxes. I am sure that Labor members are convinced that wine comes in bottles and that it is probably mined in Central Australia. That is about the level of understanding which their tax policies demonstrate. The taxes which this Government has imposed since 1984, when it promised it would not impose taxes to win that election, have amounted to 20 per cent on wholesale prices throughout the industry.

One extraordinary anomaly is that sales tax must be paid on wine that is given away at wineries. The smaller wineries generally allow 10 per cent of their production for this form of promotion at the winery. So for everyone who walks in the door for a tasting, the winery forks out an average of 90c of which 18c goes to the Government. It is not a sales tax in this case; it is a gift tax. Rumours are also spreading that the Labor Government intends to place a further 10 per cent excise on wine in the May economic statement. Already consumers of good bottled wine are paying more tax on an alcohol basis than consumers are on beer. How could any government justify equivalent taxes for a product which is now about as simple to make as lemonade and for wine, a rural product that can only be picked once a year, is reliant on a good harvest, and is stored upwards of one year in oak casks and bottles? If the rumours are true, I am convinced that the Government will precipitate bankruptcies, further takeovers and a loss of regional tourism throughout these areas. There is nothing left in reserve. The reverberations will be felt throughout the local economies of regional Australia, and the Government will be responsible for taking out yet another industry.

The wine industry needs relief from the existing tax impositions, and not new taxes. In Western Australia, particularly in the south-west and the Great Southern it is a new industry. Interest rates on capital development are killing small producers who are basically farmers who add value to their products. This is the direction we have to take in Australia. We have to add value to our primary products and start exporting the clean, uncontaminated food and fibre which only the Southern Hemisphere will soon be able to provide to the Northern Hemisphere.

Our exports are being hampered by countries which impose various standards and tests on our wine; yet our Government seems unable to agree to similar tests being conducted on our wine imports. Are we a sovereign nation protecting our own industry and our own consumers, or are we not? Trade is life and death, especially with the enormous squandered borrowings that have been rung up by this Government over the last four years. We need import replacement and we need more exports. Most of the small, quality wineries in Western Australia-in fact, in Australia-see the promotion of exports as important to the future. If the product is first class it can stand on the retail shelves around the world and survive the competition.

If we are serious about reversing our wine trade imbalance, we must do two things. Firstly, we must ensure that our wine is of the best quality, and for this purpose we should be encouraging wineries to expand their maturing stocks. That can be done by changing the current stock valuation method. Secondly, the Government must aid in the promotion of wine. One cannot take profits out of an industry that cannot afford even a 5 per cent return to its shareholders and expect that it can afford to do its own promotion, especially overseas. A lowering of taxes and/or assistance in promotion is now required. I would much prefer that taxes were reduced and the rest was left to the industry.

The wine industry has problems. It has not as yet reached the visible level of economic decline that many of our grain farmers throughout Australia have, but it is an industry which is irate and which feels that it has been unfairly dealt with. It does not much matter really what party one belongs to or how responsible one's party has been--

Madam SPEAKER —Order! The honourable member's time has expired.