AS wine lovers descend on Bendigo this weekend, the region’s winemakers are crunching the numbers after the federal government announced changes to the Wine Equalisation Tax in this year’s budget.
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For some, the changes could spell financial disaster. For others, it could create a more even playing field.
From July 1 next year, the maximum amount of WET winemakers can claim back will reduce from $500,000 to $350,000. By 2018, the figure will drop to $290,000.
The rebate was introduced in an attempt to stamp out rorting in the system since the introduction of the tax in 1999.
Bendigo winemakers with revenues between $1 million and $2 million have relied on the rebate to keep their businesses viable.
Adam Marks, of Bress Winery in Harcourt, said the reduction in the rebate would reduce their revenue by $150,000 in the first year, and $210,000 in the second year.
“I have serious concerns about viability going forward because of this change,” he said.
“The price for a tonne of fruit has increased, production has increased, so reducing the rebate will catch a lot of people out.
“The best thing to do would be to leave the status quo. I don’t think governments realise how many people wineries with revenue of $1 million to $2 million employ.”
The changes are expected to save $300 million over four years. The Australian Grape and Wine Authority will be given $50 million to promote wine overseas.
Water Wheel Vineyards, in Bridgewater, was another business likely to be negatively impacted.
While concerned for the future, winemaker Peter Cumming said only a small amount of Bendigo’s winemakers would be affected.
“If it wasn’t for the WET rebate to small wineries, many would not have gotten off the ground in the first place. It enabled small wineries to compete,” he said.
“Of course, it’s been rorted by people who aren’t really producers for many years. We’re like the fish on the hook here, it seems.”
Mr Cumming predicted wineries in the Heathcote, Macedon and Pyrenees regions could be impacted more than Bendigo.
The Winemakers’ Federation of Australia was also concerned by some aspects of the arrangement.
President Tony D’Aloisio said they would prefer to have the rebate untouched.
“While we are pleased government has listened and responded to industry’s recovery plan and the need to provide much-needed additional funds for marketing, promotion and regional development, significant questions remain over reducing the rebate cap and the delay in removing eligibility for bulk and unbranded wine,” he said.
The federal government will consult with industry players before tightening the eligibility for the WET rebate. Bulk and unbranded wine will no longer be eligible.
In a statement, Assistant Treasurer Kelly O’Dwyer said the rebate had “moved beyond the original intent” and the changes would benefit smaller players.
“The wine industry has been a strong advocate for changes to the WET rebate. The government has listened, consulted and acted,” she said.