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Monday, 30 August 1993
Page: 469

Senator MINCHIN —I refer the Minister representing the Treasurer to the Winemakers Federation's initial estimate that the 55 per cent increase in tax on wine will cost at least 650 jobs in the wine industry immediately and many more over time. Given the budget speech statement that `the primary objective of this budget is jobs', I ask the minister whether the government has sought and been supplied with Public Service advice on the number of jobs that could be lost as a result of the massive increase in wine tax. If so, what is the advice?

Senator McMULLAN —Every time tax is increased on any industry it immediately indicates that this is the end of Western civilisation. I can remember it was stated with great strength by the wine industry when it was first taxed that the industry would certainly go into decline as a consequence. It has subsequently gone from strength to strength. The likelihood that there will be an impact on the propensity to consume wine—

Senator Ian Macdonald —Do you think it will increase their sales, Bob?

Senator Alston —Will it have any effect on jobs?

The PRESIDENT —Order! There are too many interjections.

Senator McMULLAN —This is an attempt to cast pearls before swine, Mr President. There is no evidence to sustain the view that the propensity to consume wine is so volatile that it will be affected in anything like the manner suggested by the industry in respect of the increase from 20 to 31 per cent. Reasonably obviously, if that is the point, we do not accept that the employment consequences will be anything like those which the industry outlines.

  Having spent the last three years dealing with matters of tax for the government, I can say that it is always true that every industry can tell you that if only it was not taxed it could employ a lot more and it would have an advantage over all those industries with which it competes. It is not our intention to give this industry or any other an advantage over the industries with which it competes through the tax system. We have every confidence that, notwithstanding the pessimistic statements of the industry, it will continue to succeed as it has.

Senator MINCHIN —Mr President, I ask a supplementary question. I ask again: is the minister saying that the government did not seek or receive advice on the job losses that will result from the decision to increase the wine tax?

Senator McMULLAN —I have no intention of outlining here the nature of any advice from any department to any minister.