Ross Hart (Bass, Australian Labor Party) Share this | Link to this | Hansard source

The intent of the Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017 is to mitigate some of the unfortunate consequences of the Turnbull government's decision to reduce the wine equalisation tax—the WET—rebate in their 2016 budget. In the 2016 budget, the Turnbull government announced two major changes to the WET: the reduction of the rebate cap from $500,000 to $350,000 and a declaration that only wine producers with a financial interest in a winery can claim the rebate.

Reformation of the WET was long overdue. There was evidence that the system was being rorted by bulk and unbranded operators and creative entity structuring in order to access the rebate. The Winemakers' Federation of Australia said that it was compromised on three fronts: firstly, the ability of brokers, intermediaries and uncommercial arrangements to access the entitlement; secondly, the role of the rebate in delaying the correction of the supply and demand imbalance by underpinning the conversion of uncommercial grapes into bulk wine and ultimately low-equity cleanskins and home brands; and thirdly, the ability of New Zealand entities to access the entitlement on unfair preferential terms.

Reducing the perceived rorting of the WET rebate is something that certainly required attention. Unfortunately for the industry, the Turnbull government also saw it as an opportunity for a revenue grab—a tax grab that has hit the bottom line of winemakers very hard. The government initially planned to pocket $300 million from the first reform proposal that was put forward. Following significant industry backlash and expressions of concern from Labor, the government backed down and went back to the drawing board. This legislation is the result. The government still plans to pocket $160 million as a result of the reforms and the implementation of this industry support package.

The bill does a number of things. Firstly, it will formally change the name of the authority previously responsible for industry regulation, the Australian Grape and Wine Authority, to Wine Australia. It will also enable Wine Australia to implement all program activities under the Export and Regional Wine Support Package, including for the purposes of cider and international wine tourism. It will enable Wine Australia to administer grant programs for wine, including the cellar door grant. The grant programs are necessary to enable transition for wine, including from the previous scheme, but those programs may not be enough for transition. The wine support package and the cellar door grant were announced by the government in an attempt to allay fears from the industry to assist them in transitioning to their reforms of the WET. The wine support package will allocate $50 million for an export and regional wine support package. The program will allow entities with below $20 million annual turnover to claim 50 per cent of their promotional activities up to a cap of $50,000.

This fund unfortunately is limited, and the money will be allocated on a first-in best-dressed basis. It is also limited to marketing promotion in China, Hong Kong, Macau and the United States. There will be $10 million allocated for a wine tourism and cellar door program. This is a cash grant program allocated in part on the amount of sales at the cellar door. It is also capped and, if oversubscribed, every successful applicant's grant will be reduced by the proportion necessary to bring all applicants under the cap.

This WET legislation is of particular significance to my home state of Tasmania. I consider myself most fortunate not only to live in my electorate of Bass but also to represent an area of northern Tasmania that has a focus on wine, food and tourism. The Tasmanian wine industry is unique within Australia; 100 per cent of the product is premium product. That attention to detail—that focus on premium product—and the cellar door experience have also infected or transferred to the craft beer industry. I know there is a real and sensible link between the production of craft beer and tourism, but I think most people concede that the cellar door experience, particularly a cellar door experience in Tasmania, provided much of the inspiration for the potential represented by craft beer.

My electorate is blessed with some of the best sparkling wine in Australia, if not some of the best sparkling wine in the world, potentially. This has been recognised by some of the oldest producers of sparkling wine in Europe, who have chosen to establish or acquire vineyards in northern Tasmania. The acclaim for Tasmanian wine is widespread. For example, James Halliday, in the 2014 Australian Wine Companion, said that the best sparkling wines are now predominantly sourced from Tasmania. Anthony Rose, in the Independent, from the United Kingdom, said that Tasmania is rapidly becoming Australia's 'little Champagne'. Nevertheless, most of the producers within Tasmania are small producers. Some of the largest Australian wine producers do operate within Tasmania, but all of their product that is grown within Tasmania is premium product.

Whilst Labor recognises and supports the necessity for amendments within this legislation, particularly the changes made to the WET, it is very important, particularly for the premium producers of wine within my home state of Tasmania, to acknowledge and recognise that a disproportionate burden is imposed on the small premium producers as a consequence of this legislation. Eighty per cent of Tasmanian product derives from approximately 20 producers. The small producers in particular, as I said, will be hit very hard. There is a disproportionate effect of a reduction of the rebate for a small producer. While it might be the case that a very large producer of wine can absorb the reduction in rebate, notwithstanding that there is some financial effect across the whole industry, it is obvious, as a matter of financial necessity, that a small producer will be disproportionately disaffected.

While the government seeks to ameliorate the effect of the reduction of assistance with the introduction of these grants programs, this in turn requires the parliament to take the government on trust that the grants program will be effectively run with the stated aim of supporting regional producers. These programs need to be well designed and money must be allocated on a merits basis. Labor will be watching this process closely.

I can tell you that there has been considerable disquiet in the industry as a result of this process. Quite appropriately, the industry has asked whether the elements of this package align with the strategic focus of Wine Australia. That question has yet to be answered. The peak representative wine bodies within the states of South Australia, New South Wales, Tasmania, Victoria and Western Australia have submitted a joint response to the draft grant guidelines. The organisations have been actively involved in discussions and consultation regarding the changes and are very keen to ensure that the grants programs are successful and that they support the long-term repositioning of their members in the Australian wine sector more broadly. This is essential for the premium wine industry of Tasmania.

The cellar door and wine tourism grants are good in principle. However, the state wine organisations are very concerned about the impact of the proposed grant processes on organisational cash flow and the overall profitability of wine businesses. The potential impact on a wine business is that it would lose up to $150,000 from the bottom line immediately following the rebate reduction in 2018-19; yet it will not be able to access any additional top-up grant of $100,000 until November 2019. That is, of course, assuming the administration of the grant program will be effective and efficient.

In addition to this, there is uncertainty over the potential for over-subscription, which must create additional pressure on financial planning and performance of the small businesses. Put another way, the grant programs which are designed to support regional producers need to recognise the potential effect of the withdrawal or reduction of the rebate and the potential difficulties in replacing at least a portion of that funding through the grant program. Again, the Export and Regional Wine Support Package is good in principle, but, as a response to the financial effect of the reduction of the rebate, the effect is still to be determined. The intention is that this will be restricted, and the competitive grants program is designed to support a collaborative, strategic approach towards attracting and maximising international wine tourism.

The various state wine organisations have specific strategies and priorities which have been developed in partnership with their respective members and, I understand, the regional associations. The state wine associations may be in the best position to determine what will be the appropriate activities to support their members in their regions, particularly where these regions are negatively impacted by these and other changes. It is obvious, therefore, that any grant oversight and/or assessment process, to be effective and responsive, will need to have very good and clear insight into the views of the state wine organisations. The various state wine organisations are not-for-profit and are supported, in the main, by wine producers. As a consequence there may be difficulty with the proposed co-contributions which are proposed within the draft grant guidelines. I urge the government to work with the state wine organisations to ensure that the state wine organisations are able to access the funds which are intended to support their members for trade and tourism outcomes which are for the benefit of the wider industry and, of course, our regional communities. The proposed wine export grants are likely to be very quickly exhausted, according to industry feedback. It will be most appropriate that the government put in place real-time updates with respect to approved and pending applications so that the individual businesses can determine whether it's appropriate or not to submit a particular application.

As I indicated earlier, Tasmania produces high-value wines, and when sold domestically they are taxed on their value at 29 per cent. The change to the WET rebate disproportionately affects Tasmania's wine producers, dominated by small premium producers. The state's wine industry has projected that production could triple over the next five years. I've been speaking with producers in my electorate who have had to question decisions on expansion and hiring plans as a direct consequence of this government's decision. The small to medium wineries, as I indicated earlier, will be most impacted by this. Rebecca and Tim from Holm Oak Vineyards in the Tamar Valley have put their expansion plans on hold. Shane and Fran from Delamere Vineyards, who have six full-time staff, have raised a number of concerns with respect to maintaining their current staffing levels.

Tasmania is proactive in marketing itself as a place to invest in the wine industry, particularly at the premium end. My home state enjoys and celebrates a national and international reputation as a leading producer of premium cool climate wines. The state consistently wins high praise, not to mention an array of medals from wine judges and critics alike. Industry and government need to work together to facilitate the expansion of the industry and further develop our reputation in wine and food tourism. The industry is seen as a priority sector with excellent growth prospects. Successive Tasmanian governments have consistently argued the case for securing value-added investment within the state.

Taxation measures, like these taxation measures, often affect behaviour of consumers and businesses, and these measures are no different. The initial proposal for the reduction of the rebate was, quite correctly, rejected. The two funds created as part of the rebate reforms—the $50 million Export and Regional Wine Support Package and the $10 million Wine Tourism and Cellar Door Grant program—are both necessary and appropriate. Labor supports them. It is, nevertheless, essential that the government does the hard work, in consultation with the industry at the national and state levels, to ensure that the administration of the grant program is effective. This is necessary to ensure that those who are disproportionately affected by the changes to the rebate receive appropriate assistance in transitioning to the new regime.

The premium wine industry in my state of Tasmania is now part of the identity of Tasmania. It has built a well-deserved reputation for excellence and innovation. The small producers need to have their voices heard through the state-based wine organisation—in this case, Wine Tasmania—and their interstate counterparts. It is also most important that the strategic focus of the grant program is aligned with the strategic focus of Wine Australia so that there is no inconsistency between the application of funds and the strategic interests of the industry as a whole.

This is very important legislation, particularly as it affects my home state. As I've said on a number of occasions, we have a predominantly premium based industry made up of small wine producers. Those small wine producers need an effective transition program. The transition program might not be so effective if those grant programs are not administered correctly. The government must continue to talk to the wine industry organisations at both state and national levels. It's essential for the reputation of Wine Australia that these programs are effective in transitioning to the new WET regime. This industry is too important in my home state to fail. It is a focus of industry expansion for the future. These taxation measures can't put any limitation on those expansions.

Gai Brodtmann (Canberra, Australian Labor Party, Shadow Parliamentary Secretary for Defence) Share this | Link to this | Hansard source

I welcome this opportunity to speak on the Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017. The bill will enable the authority to implement all program activities under the wine support package; it will enable the authority to administer grant programs for wine, including the cellar door grant; and it will change the name of the authority from the Australian Grape and Wine Authority to Wine Australia.

I've got a significant interest in wine, not just because I like to imbibe it but also because my sister is an internationally renowned winemaker—she is Australia's first female Master of Wine—and there are fabulous wineries in the capital region around Canberra. Now, it's a relatively young wine industry. While South Australia and Victoria were already established as wine regions by the end of the 1800s, Canberra had a few small, fairly unremarkable vineyards planted near Yass. Our fortunes changed when we had the great honour of our CSIRO scientists and other academics getting involved in the local wine industry. Dr Edgar Riek, a pioneer of the region, planted vineyards in 1971. He had a distinguished academic background, as many of the founders in the capital region wine district had, and he saw the potential in the region as a premium wine-growing area. He started the Canberra District Vignerons Association and instigated the National Wine Show, which is arguably the country's most important wine show.

After Riek's initial plantings at Lake George in the early 1970s, others soon followed. International award-winning scientist John Kirk established Clonakilla in 1971. Ken and Judith Helm started their vineyard and winery in 1973—the famous Helm Wines. Like Kirk and Edgar Riek, Ken Helm has been instrumental in putting Canberra district, capital region, wines on the map with the cool-climate international riesling challenge that he conducts every year. It draws hundreds of people from all around the country and also from all around the world to the Canberra region. It is a very prestigious competition. Ken Helm has been the driving force behind it. We have a cool climate here, and we specialise in cool-climate wines. This is why Ken Helm has been a major driver of the riesling challenge and cool-climate wines more generally.

In 1978, Sue and Dave Carpenter planted vines at Lark Hill winery at Bungendore. A decade later, Mount Majura's first vines were planted. In 1997, inspired by Riek, Jim Lumbers established Lerida Estate at Lake George, adjacent to Riek's original vineyard. There are many other winemakers in Canberra who are now producing wines. Bryan Martin, who was an assistant winemaker at Clonakilla estate, has used his expertise to establish Ravensworth at Mawson. Microwinery Eden Road shot to fame in 2009, winning the Jimmy Watson Trophy for its 2008 Hilltops Shiraz and the Best New Winery at the inaugural Sydney Morning Herald'sGood Wine awards in 2010. Guiding Eden Road wines is winemaker Nick Spencer. As many here in the chamber would know, Nobel Laureate and Vice-Chancellor of the Australian National University—none other than Professor Brian Schmidt—has established his vineyard, Maipenrai, at Sutton. His pinot noir has wowed the fans. Mount Majura was established in 1991 by winemaker Frank van de Loo, who has also been producing award-winning wines, particularly chardonnays, ever since.

As I said, Canberra is well-known now around the world for producing internationally-renowned, award-winning wines—award-winning cool-climate wines. We are very proud of the winemakers here in the capital region. It is yet another reason to come to Canberra. As we heard this week, there are many reasons to come to Canberra. I've always known that Canberra is the best place in the world. I've always known that it is the best place in Australia to visit. We had that confirmed this week with Lonely Planet's Best in Travel 2018 nominating Canberra as one of the top three cities to visit in the world in 2018. I am not saying that it should be limited to 2018. I am saying: come on down to Canberra any year, because it is the best place in the world. Unfortunately, we came behind Seville and Detroit. In my view, we should have been ranked No. 1. That said, this ranking is the highest that has ever been achieved by an Australian city.

Lonely Planet's travel experts compile the top cities list based on strict criteria including topicality, excitement, X factor and unique experiences. For Canberra, next year is such a unique and exciting year, and the events our city will host include the 100th anniversary of the World War I Armistice, at the Australian War Memorial, which will be an extraordinary commemoration; and the first cricket test match at Manuka Oval. Both of these venues are in my wonderful electorate of Canberra.

We're claiming to be one of the coolest little capitals, and we are the coolest little capital because we offer a rich history; amazing world-leading design elements that are based on the principles of democracy, transparency and openness; culture and entertainment; world-class national institutions; and something for every type of traveller. The Lonely Planet website rightfully states that Canberra is 'criminally overlooked' and 'packs a punch' for the small city that we are.

Canberra boasts expansive open spaces, as we know, with those huge, gorgeous skies that are blue and beautiful even when it is about minus 10 degrees. Unlike other cities where it's grey in summer and grey in winter, it is blue sky for a lot of the time here in Canberra, even in winter. So we have these beautiful open spaces overlooking the Brindabellas, the ranges that you can see from every corner of our wonderful city. We have popular attractions, including this very building—this beautiful, iconic, Giurgola-designed building. We've got Questacon, Floriade and the Old Bus Depot Markets. The list goes on and on.

Countless new and modern places to eat and drink have followed the revitalisation of areas like Braddon and New Acton, and these suburbs add to the establishment of our hip and contemporary style. As we are talking about imbibing, I just want to mention we also are home to craft beers BentSpoke, Pact, Capital and Tortured Gum; craft beer taverns and breweries, as in the Wig & Pen; and craft gins and spirits, with Underground Spirits and the Canberra Distillery. Most of these breweries and distilleries are in my electorate. I want to give a shout-out to BentSpoke, who recently made it into the top 10 of GABS Hottest 100 Aussie Craft Beers. There is also Zierholz, in Fyshwick.

This announcement by Lonely Planet adds further hopes of connecting Canberra internationally and encouraging tourists to visit Canberra, our nation's capital, which has so much to offer. Like all Canberrans, I cannot wait to welcome the world to our fabulous nation's capital.

Finally, as I mentioned earlier in my speech, my sister Meg is Australia's first female Master of Wine, an extraordinary achievement and one of which I am very proud. She's a winemaker who has travelled all around the world for the last 25 years, since she graduated with her degree from Roseworthy. She brought to my attention, when she was here just recently, the significant challenges that women in the wine industry still face. We know that women are increasingly moving into the wine industry. Women make up 50 per cent of winemaking and viticulture graduates, but women comprise only 10 per cent of the Australian wine industry workforce. So, even though 50 per cent of the graduates in this area are women, women are only 10 per cent of the workforce. With Australian wine exports now topping $2.3 billion, at June 2017, and the wine industry providing a major source of employment, particularly in regional and rural Australia, this is simply unacceptable.

A survey of women in the wine industry by wine identity Jane Thomson last year revealed that 42 per cent of women knew or believed they were being paid less than their male counterparts. Two-thirds of women replied that they'd experienced sexist behaviour in the workplace, and one in four women had endured unfair treatment in regards to pregnancy, sick children or maternity leave. A quarter of the respondents believed that they did not have equal career opportunities in their workplaces. I know that my sister Meg and a number of women are getting together now to bring these shocking statistics to people's attention—because they are quite shocking, given the fact that women make up 50 per cent of graduates in this area but only 10 per cent of the actual wine industry workforce.

The wine industry has to change. That starts with shining a light on the lack of diversity. That is why this survey Jane Thomson has conducted is especially useful. We need to be asking the questions: why is female representation so much better overseas than in Australia? Why the lack of national and international recognition and exposure of Australian female winemakers? Why is there no critical mass of women on wine-judging panels? Why the dramatic attrition rate? We are talking about this extraordinary attrition rate just from graduation. Why the limited career paths? Why the perception that winemaking is a male industry?

We need to institute change, and that's why I welcome the Australian Women in Wine Awards that were held last month at Australia House in London. I commend the women who took out those awards. I'll just quickly run through a few of them. Winemaker of the Year was Virginia Willcock from Vasse Felix. Viticulturist of the Year was Jennifer Doyle from Jansz. Owner/Operator of the Year was Sarah Collingwood from Four Winds Vineyard. Workplace Champion of Change was Professor Eileen Scott from the University of Adelaide. Cellar Door Person of the Year was Jasmine Morgan from Caudo Vineyards. Researcher of the Year was Dr Christine Bottcher from CSIRO. Marketer of the Year was Ebony Tinkler from Usher Tinkler Wines.

These awards are a great way of shining a light on the achievements of female winemakers from Australia and on the fact that so many women are going overseas. We have got a huge brain drain in female talent here, because the opportunities and exposure just aren't here. The acknowledgement is just not here. That is why it is important that the Australian Women in Wine Awards are highlighting these achievements and focusing attention on the issue of the lack of diversity in this industry and the fact that we have so many women leaving Australia to go and work overseas. My sister was a classic example. As I said, she spent most of her early career working in France, Germany, South America, the UK and Eastern Europe. That was because the opportunities, particularly as a young graduate, just weren't there. She became what is known as a 'flying winemaker'. These awards are fantastic. They are acknowledging the achievements of Australian winemakers. It is unfortunate they actually have to take place overseas.

But what is happening at the domestic level also needs to be acknowledged. My sister has joined with a number of women from the Yarra Valley wine area to set up Yarra Valley Wine Women. Again, it is designed to highlight the achievements of women in this area. We've got more than 150 wine brands, 85 cellar doors and 65 wine production facilities. Within this pool is a group of women winemakers challenging the statistics of the industry average. Fortunately, there seems to be a critical mass there. This group manage 12 per cent of those 150 wine brands and have a collective 200 years experience in the industry. I say to those in the wine industry: I am watching, I will be calling this out and I will be shining a light on this issue. This is not the last conversation I will be having about the lack of diversity in the Australian wine industry.

Luke Hartsuyker (Cowper, National Party, Assistant Minister to the Deputy Prime Minister) Share this | Link to this | Hansard source

The Australian Grape and Wine Authority Amendment (Wine Australia) Bill 2017 amends the Australian Grape and Wine Authority Act 2013 to facilitate wine and cider tourism and cellar door development activities. These amendments are part of the reforms to the wine equalisation tax, WET, to bring greater integrity to the WET debate. As part of these reforms, the government is investing in a $50 million Export and Regional Wine Support Package and a $10 million investment in the Wine Tourism and Cellar Door Grant scheme. These were changes originally driven by industry. The government has consulted extensively with the wine and cider industries through the national and state wine associations on the development of the WET rebate reforms, the wine support package and the cellar door grant scheme.

The bill enables the authority to administer and fund all aspects of the wine support package and the cellar door grant scheme. The bill will also enable industry to refocus greater attention on the export and tourism markets, both internationally and domestically, through cellar door sales, which offer it the greatest opportunity for growth and sustainability. The bill also changes the name of the authority from the Australian Grape and Wine Authority to Wine Australia. The bill is important to industry and it is important that the parliament supports the industry in its endeavours to increase wine exports and international wine tourism.

Question agreed to.

Bill read a second time.

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