Of the many issues raised during the session, changes to the Wine Equalisation Tax (WET) Rebate were the most hotly debated.
The WFA ER revealed that the wider industry is experiencing significant financial pressure as a result of declining exports, retailers extracting higher margins from winemakers, increasing competition in international markets and oversupply of grapes and winemaking capacity. It is clear that this 'perfect storm' of declining profits is stretching small to medium (SME) winemakers and making them more heavily reliant on the WET Rebate.
This data is supported by the inaugural 2013 WV industry survey which identified a startling 65 per-cent of wineries that are currently making a profit would close their doors if the WET Rebate was removed.
Additionally, it is clear that governments at all levels are reviewing their budgets to find savings and industry must act to work with governments to remove instances of abuse or rorting. It is on this basis that WV has underpinned its response on this issue by the following key summary points:
- WV supports efforts to reform the WET Rebate to return eligibility back to the original policy intent and to prevent instances of abuse and rorting.
- WV remains in strong opposition to any processes of review that does not first seek to fully understand the impact of the WET Rebate on the profitability of the Victorian wine industry, this includes any definitional changes.
- WV requests that it is treated as a key stakeholder in the review process and is consulted on any impending actions for change.
To view WV's full and detailed response to the WFA-ER and profitability paper where the issues of: wine and health; international trade; domestic market development; and regional development are discussed, please click here.