Notwithstanding persistent leaks that there would be a volumetric tax based on the alcohol content of all alcoholic products, the Government has decided to stay with the existing system for wine. It won’t please everyone in the industry (especially not Margaret River and Tasmanian movers and shakers) but most are pleased with the outcome. Stephen Strachan, Chief Executive of the Winemakers’ Federation of Australia, says:
“Unnecessary change would have devastated the wine industry at a time when it is dealing with its toughest period in more than two decades. Our modelling shows that taxing wine in the same way as packaged beer, and removing the WET Rebate, would see 95% of wine increase in price, sales volumes fall by 34%, 29,000 hectares of vineyard become redundant and about 12,000 jobs lost.
Most of those jobs would be in regional areas where wineries are crucial contributors to tourism and thus to economic development.”
The cynical will say that this (along with many other responses by the Government to the report) is driven by the upcoming election. There will doubtless be continuing concern that this is a not-now, and a probably-later decision.