Wine Equalisation Tax (WET) rebate reforms create uncertainty for WA wine producers

In a bid to weed out bulk wine traders who exploit the system by making multiple claims of up to $500,000, sometimes for the same wine, the cap will be reduced to $350,000 from July 1 next year and will be accessible only to branded and packaged wine producers. 

New “integrity” measures also stipulate producers must own 85 per cent of the grapes used to make the wine, maintain ownership throughout the wine making process and produce wine in a container with a registered trademark for retail sale which does not exceed five litres.  

The amendments, meant to come into effect in July 2017, was pushed back a year after extensive negotiations between government and industry granted wine producers more time to refocus their business operations. 

So how will this decision made at a federal level, expected to raise $300 million in revenue over four years, affect wine producers in WA? 

The air of uncertainty is reflected by industry peak body Wines of Western Australia, who this week urged major and minor political parties to commit to a formal consultation process with their local wineries.

The body, which provides support to producers and growers in the region, called for discussion on key issues including strategies to boost cellar door tourism, export market development and economic activity in the wine industry and through to the broader economy.  

The Mail caught up with the four candidates vying for the seat of Vasse in the upcoming state election and asked them how they would work to ease the industry into the reforms. 

Incumbent Liberal candidate for Vasse Libby Mettam said if re-elected, she would drive a steering committee to work out the best way to support the industry going forward. "Our federal counterparts have led the consultation process to get the best outcome and what we need to do at the state level is consult on what we can best do to assist," she said. 

Ms Mettam said the Liberal-led government had achieved positive outcomes for tourism and the wine industry by providing alternative pathways to market. 

These include new regulations which have allowed online businesses to sell wine without a storefront and producers can now also sell wine at a farmers market anywhere in the state with the purchase limit being a case (12 bottles) per customer. 

"Visitor experience and driving regional growth is of key importance to the Liberal-led government and that is demonstrated through the expansion of the Busselton Regional Airport, investment in mobile coverage along Caves Road to Margaret River and major reforms to the liquor industry." 

Nationals candidate for Vasse Peter Gordon said as a Margaret River-Busselton Tourism Association board member, he recognises the significant drawcard cellar doors and associated restaurants have on attracting tourists to the region. 

"The Margaret River wine region is what put our flourishing tourism sector on the world wide stage and is celebrating 50 years in 2017," Mr Gordon said.

"We recognise that tourism will likely be the next boom for WA, and our $610 million Seizing the Opportunity Tourism Policy demonstrates we are serious about tourism." 

Mr Gordon said the reduction in the rebate affected medium to larger wine producers in the region.

“Obviously when anyone loses revenue they have to adjust their expenditure to make up for this and this will mostly likely be employment and investing back into their business,” he said. 

Labor candidate for Vasse Wes Hartley pledged to work closely with the wine industry in WA to ensure its future sustainability. 

“WA Labor notes the rapid expansion of the WA wine industry and the challenges associated with this growth, particularly the WET rebate which is a federal issue created by the Turnbull Liberal government,” he said. 

“We will also work closely with the Commonwealth to ensure that taxation arrangements do not threaten this sustainability.”

Mr Hartley said a McGowan Labor government would allow regional wineries, brewers and distillers to sell their products at regional farmers’ markets and cellar door collectives, especially in the Geographe and Margaret River regions. 

“We need to make it easier for tourists to try our unique local products by freeing up the regulations around regional collectives and farmers markets,” he said.

“Currently, regional collective cellar door facilities can showcase wines and beers from a particular region, but not distilled alcohol products.

“We will also allow accredited tour operators to sell and supply alcohol under prescribed circumstances – such as a glass of wine at the start of the tour.”

Mr Hartley said WA Labor’s plan for jobs will deliver a $425 million investment over five years to establish WA as one of the world’s great tourist destinations. 

“Tourism is a key focus of WA Labor’s plan to create jobs and broaden our economy beyond resources and our spectacular wineries are an important part of this.” 

Greens candidate for Vasse Luke O’ Connell said he would consult widely with any industry affected by policy changes. 

“The Greens call for an additional $20 million to boost regional and rural tourism through grants for local tourism operates, community groups and local governments,” he said.

“Additionally $80 million will be provided for events and destination marketing to attract more visitors and generate sustainable economy activity in WA.

“Barnett’s Liberal Party boasting about how consultative they are rings hollow in the face of Roe 8 and the sale of Western Power. They’re just trying to stick the boot into the Nationals now that One Nation are their preferred partner.”