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Tuesday, 31 August 1993
Page: 677

Senator KEMP (4.42 p.m.) —I will be brief for the reasons that my colleague Senator Reid has indicated. In the past two days in Question Time, Senator McMullan has been asked to indicate to the Senate his view, backed up by research, as to the impact of the 55 per cent increase in sales tax on wine on the industry, investment, employment in the industry and on the export sector. Very proper questions have been raised. Coming from the winegrowing state of South Australia, you will know, Mr Acting Deputy President, that there is great concern in the industry about the impact of this tax.

  The questions by Senator Minchin and Senator Troeth, which were raised in a very responsible manner, have sought the government's views and its research on this issue. Unfortunately, although the government has been questioned twice on the subject, we still do not have the information.

  The government believes a substantial amount of tax will be raised from this levy, although the industry doubts that that amount of tax will be achieved. The industry's view is that the investment loss will be of the order of $445 million and that there will be a loss of $100 million in sales. And the statistics go on. In order to save time, I seek the leave of the Senate to incorporate the one-page wine sales tax impact statement in Hansard. I have cleared it with Senator Schacht.

  Leave granted.

  The document read as follows



Wine Sales Tax

Impact Statement

  Sales tax on wine from 20 per cent to 31 per cent

  Retail price of wine increased by between 9 per cent and 15 per cent

  Domestic wholesale sales diminish from $1 billion to $900 million

  Sales tax collection (full year) from $200 million to $279 million

  State licence fee collection from $132 million to $130 million

  Wine sales volume from 311 ml to 279 ml

  Grapes displaced 50,000 tonnes

  Loss of export income $126 million pa

  Investment lost in new vineyards $250 million

  Investment lost in inventory $160 million

  Investment lost in winery plant and equipment $35 million

Total Investment Lost $445m


  Federal Government gain—$79 million

  State Government loss—$2 million

  Investment lost—$445 million

  Industry loss—$100 million sales and $77 million margin potential

Senator KEMP —I thank the Senate. Some Labor members of parliament who represent winegrowing areas have allegedly expressed their concern about the impact of the sales tax increase on the wine industry. Certainly in my home state of Victoria Mr Peter Cleeland has circulated a letter to winegrowers indicating that he is opposed to the increase in the wine tax. Equally, I understand that Mrs Silvia Smith in the very marginal electorate of Bass has also indicated her opposition to the tax.

  It is therefore a matter of great concern that after the very famous meeting last night of the economics committee of caucus—a committee which grew in size to some 70 people in the course of the evening—

Senator Sherry —You were there, were you?

Senator KEMP —I have read the press reports which, so far as I am aware, have not been denied. There are a couple of questions that I will be putting to the Senate about this issue, so Senator Sherry will be able to rise to respond to them. How fortunate it is for us that he has come into the chamber.

  Apparently a very large number of Labor Party backbenchers attended the caucus committee and added to the community furore about the impact of this budget. Martin Ferguson described the budget as attempting to defend the indefensible. Today's Melbourne Age states that up to 70 caucus members from all factions attended the meeting to denounce the budget and the government's performance. One MP described the budget—I quote from the Age which would not use this word normally—as `shithouse'. That apparently led to widespread applause from the assembled Labor backbenchers. Other people have allegedly blasted the budget as politically stupid and so forth.

  Apparently there was no push to overturn the wine tax. This raises a rather serious issue. Some Labor backbenchers are going around telling their electorates that they are opposed to this wine tax. Amongst the number of changes announced by the government as a result of this very frank and vigorous meeting last night, no change was announced to the wine tax.

  Labor members are allegedly telling their electorates that they are all concerned about this tax and are opposed to it. Therefore, it is a matter of great concern that when it came to a major meeting at which the government was really forced to back down, apparently the issue of the wine tax was not pushed with any vigour, and indeed I do not know whether it was raised. That is the message which has come through to me.

  It is my strong view that the government is in the process of desperately rewriting this budget. It is important that those Labor backbenchers in the winegrowing areas add their voices to the Liberal Party, the National Party and the Australian Democrats and vigorously and publicly oppose this tax. I believe there is no doubt that the mere sign that two or three of them were prepared to cross the floor on this issue would, given the current state of the government, lead to the overturning of this pernicious tax.

  I put it to the Senate and to those Labor backbenchers that it is simply no good pretending they are opposed to this tax and trying to win a few brownie points back in their electorate when they do not even raise it in the key caucus meeting where tax changes are being discussed. Even worse, the Mr Cleelands and Mrs Silvia Smiths of this world are still failing to stand up and indicate to their electorates that if the government proceeds with this tax, they will cross the floor. That is now the challenge that is before them to test their real sincerity on this issue.

  As I have pointed out in this chamber before, these Labor backbenchers have a clear mandate from their electorates not to increase taxes such as the fuel tax or the wine tax. They are now being put to the test to see whether they, like their Prime Minister, hold their promises to their electorates so lightly.

  The ACTING DEPUTY PRESIDENT (Senator Chapman)—Before I put the question for the adjournment, I advise honourable senators that estimates committee arrangements for today are as follows: Estimates Committee A is to meet in the main committee room and will be televised on channel 21 and broadcast on FM band 92.7; Estimates Committee B is to meet in committee room 2S1 and will be televised on channel 22 and broadcast on FM band 90.3; and Estimates Committee C is to meet in committee room 2S3 and will be televised on channel 23 and broadcast on FM band 91.1.

  I also advise honourable senators that the order of consideration of portfolios by Estimates Committee A has been changed. The committee will now consider portfolios in the following order: Foreign Affairs and Trade, programs 1 and 7 followed by programs 2 to

8; Prime Minister and Cabinet; and Primary Industries and Energy.

  Question resolved in the affirmative.

Senate adjourned at 4.50 p.m.