James Stevens (Sturt, Liberal Party) Share this | Hansard source

As the previous speaker indicated, we in the coalition support the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023, with its five measures within the standard, regular TLAB process that we go through in this chamber to continually update a variety of legislative measures, as is necessary.

I would like to focus my comments on the element of this which relates to alcohol excise. It is an opportunity to highlight a broad issue that I have with the alcohol tax regime we have in this country. The history is important and interesting. We tax alcohol in different ways, depending on what type it is and what its attributes are. That really goes back to the protectionist days of having higher taxes on the types of alcohol that were more likely to be imported into the country, rather than produced here. Whilst I'm a very passionate free trade supporter, I understand why, in a different era, that was government policy. Frankly, it was the reality of global markets. Before the World Trade Organization frameworks provided pathways to lowering tariffs and non-tariff barriers to trade, all nations engaged in that sort of protectionism. We have an alcohol excise tax regime in this country that was very much designed in a different era, for fundamentally different purposes to today.

The reason I'm very engaged and passionate about this is that I represent an electorate that is very proudly engaged in the production and manufacture of all the various significant categories of alcohol. I've got the Penfolds Magill Estate winery, the most famous winery in Australia, at least, which very regularly wins significant international competitions. Of course, it is the home of Grange Cottage, where the most famous Australian wine—now Grange Shiraz but formerly known as Grange Hermitage—is produced, originally by the great Max Schubert.

My electorate is also home to Coopers Brewery. Coopers now manufacture just outside of my electorate, but the Coopers Brewery was very much an institution of the eastern suburbs of Adelaide, located in Leabrook, until about 20 years ago. They have relocated to Regency Park, but Coopers as a business and the Cooper family are very much ingrained, still, in my electorate of Sturt.

I now also have a very exciting and growing distillery community. A number of producers are engaged in the distillation of gins and vodkas and even whiskies.

So it is a different era now in the Australian alcohol industry. My electorate has been engaged in all of them and many other members will have at least one producer but probably multiple producers of alcohol in their electorates.

I'll use this opportunity, in talking on this bill, the Treasury Laws Amendment (Refining and Improving Our Tax System) Bill 2023, which does have a measure related to alcohol excise, to call for a complete re-engineering of the way in which we undertake the taxation of alcohol. As I say, as to the way certain types of alcohol—particularly spirits that weren't produced in large proportions in this nation—were taxed, and are still taxed effectively that same way, they pay a much higher amount of alcohol excise than other types of alcohol.

Now, as a free market capitalist, I very much believe in fairness in our tax system. Let tax be as broad as possible and as low as possible.

Of course we want to live in a society where alcohol consumption is responsible. I'm not advocating that we encourage excessive consumption of alcohol. But consumption of alcohol, in a responsible way, is very much part of our society. It's also an enormous economic contributor to this nation. So, in the days of alcohol taxation favouring beer and wine and brandy in particular, I don't want to see those rates go up at all; I'd like to see those rates come down. But I would also very much like to see us recognise that the taxation of spirits is disproportionate and not fair. In this bill, we have a particular reduction in the excise levied on a type of sale of beer. We welcome that. We're supporting the bill, including that reduction.

But I think this is an opportunity to reinforce to the government that we need a broader review looking at the way in which we are taxing this industry and asking: Is it equitable? Is it fair? And do we want to look at it in a holistic way?

I was very pleased that, in the last term, we looked at this and undertook a reduction in excise for small breweries, those in small production, by introducing something that had some elements of the wine equalisation tax principle to it, which is that the first portion of your production is taxed at a lower rate. I really like the fact that we give, for the initial quantity of certain alcohol manufacture, a lower rate than we give at higher quantities, which allows small producers to have that little bit of an extra opportunity in the market.

There's been an explosion of small producers and small breweries. I've got Little Bang Brewing in my electorate, which I'm really proud of. I've had Little Juniper Distilling, who are producing fantastic gins; I visited them a few months ago. Regrettably, they are moving out of my electorate into the member for Mayo's electorate. She has a blossoming array of spirits distillation businesses and also smaller wine producers. Being a South Australian, I'm very passionate about those small producers.

There's the wine equalisation tax framework. We have those measures in place. But I really want to see all elements of the alcohol industry have the same opportunity to continue to grow and thrive.

What we're seeing in my home state of South Australia right now is also that, in this sector, it's not just about production and sale. It's also about destination, and we've had that for a very long time in the great wine regions of South Australia. My electorate goes into the foothills of the Adelaide Hills region. Of course, the most famous winery, Penfolds, is in my electorate. Most of their activity, I concede, is in the other wineries that they operate—particularly in the Barossa and, frankly, all across South Australia—but their home is in my electorate. There's the broader Adelaide Hills region, which is in the member for Mayo's electorate. There's the Barossa and McLaren Vale and the Clare Valley. There's the Coonawarra region and the Limestone Coast. And we've got newer regions that are coming online on a regular basis. There's wine now being produced over in Port Lincoln on the Eyre Peninsula.

These businesses are not only producing; they're also being established as destinations, and they're contributing to the tourism economy in a very significant way. For decades now that's been the case in the wine industry. But what's now happening is we're also seeing that in the brewing sector; we are seeing small brewers established who are not only producing for packaged liquor sale but also operating as a destination in their own right. The Little Bang brewery I've got in my electorate—not only can you buy their product in all good liquor distribution outlets; you can actually go to the brewery itself. You can have a few of their lovely craft beers and get some food as well, and have that as a hospitality experience in and of itself.

That's now also happening with distillation. We are seeing, interestingly and helpfully, it's very complementary to a lot of the wine regions. Down in McLaren Vale, up in the Adelaide Hills, in all the wine regions, we're seeing distilleries being established. At times they are in partnership with existing wineries. Never Never is a good example in McLaren Vale; they are established with Chalk Hill, a very significant winery in McLaren Vale. Many other distilleries are establishing themselves in these wine regions and supplementing and enhancing the tourism offer, which is in and of itself contributing an enormous amount to those regions. I should have mentioned the Riverland; I regret omitting them. They're another great example as a wine region that has had distillation come on board, again enhancing that tourism offer. That is creating amazing economies of scale for further tourism infrastructure investment. It means you're seeing a lot of really good accommodation offerings being developed and being invested in, in those regions, and you're seeing the general food and beverage offer expanding greatly.

All these destinations are within very close proximity to Adelaide, so Adelaide as a city gets the benefit from the tourism outcome of the satellite wine regions that are all very easy to access from Adelaide, as a day trip or a weekend stay or whatever. As locals in Adelaide we love the opportunity ourselves to enjoy these businesses and what they're offering, but we particularly appreciate the fact it is contributing in such a substantial way to the tourism economy in South Australia.

So that's what's already happening, but I very firmly believe that we need reform in the excise regime for alcohol because there are some ridiculous circumstances that particularly the spirits producers face. It shouldn't be the case that there are certain spirits produced in Australia that are cheaper to purchase at a liquor store in the United States than they are at a liquor store down the road from where the distillery is located. That is absolutely ridiculous. It is the case that some of the ways in which we levy taxation in that area—which, as I've indicated, is from a previous era where a lot of these spirits categories were exclusively imported from somewhere else; it was an economic decision, in a different protectionist time, to advantage locally produced alcohol against imported alcohol. I don't criticise that era and that approach to government policy, but, as I've just outlined, that is simply not the case anymore. If you go into any liquor store in the nation now you'll see a lot of fantastic, locally produced spirits, and those businesses deserve to have an excise regime that is fair and equitable.

We don't want to see this become something that's competitive between the different categories of alcohol and spirits—as I've outlined, the beer manufacturers in my electorate, the wine manufacturers and the spirits manufacturers. The broader amount of domestic manufacturing, the better. I think it's the case that, when it comes to responsible purchasing and consumption of alcohol, you can have any taste met by a locally produced product. I think the export opportunity is only going to be enhanced for those producers as well. They're doing an excellent job and winning awards all over the place. I've got a business in my electorate which started out making Adelaide gin with distillation in my electorate in Stepney. That business has also been distilling gins and vodkas in the other capital cities and, in fact, in Geelong. The owner of that business is a very passionate Geelong Cats fan, and he has a Geelong gin. He is winning awards all around the world for a fantastic product that has established itself, from my electorate.

This is a sector I think and hope we all want to back. I think we've got to review the way in which spirits taxation has worked historically, which was very much from a different era regarding local manufacturing and local production. I don't want to see taxes increase on any alcohol excise, but I would like to see us look at ways in which the whole industry can be supported. I don't think the industry is competing with itself. Like I indicate, a lot of wine producers are also going into spirit distillation, and there are a lot of companies that own business across all the different components of alcohol manufacture and production.

So I use my speech on this bill to outline that desire. I hope there's some consideration of some bipartisanship around it. I think it could benefit from an inquiry being undertaken by a parliamentary committee, with an open-minded approach to reviewing how we can get that right so that we're backing these businesses and these manufacturers to be able to grow and be as big as they possibly can be. With those comments, I commend the bill to the House.

Question agreed to.

Bill read a second time.

Ordered that this bill be reported to the House without amendment.

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