Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

I move:

That the Senate—

  (a)   notes that:

     (i)   microbreweries are important niche businesses in Australia, providing valuable job opportunities and economic growth, particularly in rural and regional areas,

     (ii)   microbreweries need recognition within the tax system through the Microbrewery Refund, given that they are competing in a domestic market heavily dominated by large multinational companies,

     (iii)   the Microbrewery Refund was introduced in 2000 and that the definition of a microbrewery has not been reviewed and is now markedly out of step with industry reality; and

     (iv)   the maximum excise refund has remained capped at $10 000, while the beer excise has been raised twice a year for the past 11 years with the consumer price index; and

  (b)   calls on the Government to amend:

     (i)   the definition of a microbrewery under regulation 2AB of the Excise Regulations 1925, so that a microbrewery is defined as a brewery that produces up to 300 000 litres of beer annually, replacing the current maximum volume of 30 000 litres, and

     (ii)   paragraph 50(1)(zzd) of the Excise Regulations 1925 to remove the maximum of $10 000 excise refund that can be claimed in a financial year.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I seek leave to make a two-minute statement on this notice of motion.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Leave is granted for two minutes.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I thank the Senate. The opposition will oppose this notice of motion but not because it does not have sympathy for the current pressures on microbreweries in Australia and particularly in our home state of Tasmania, Mr Deputy President. In May 2007 the then coalition Assistant Treasurer, Peter Dutton, announced that from 1 January 2008 the coalition government would allow small business with deferred settlement provisions to settle their excise obligations on a monthly cycle. This would benefit the cash flows of microbreweries and would have had no impact on Commonwealth revenue, a genuine win-win.

I have made representations to the Treasurer and the shadow Treasurer about modifying the existing rebate structure and the extension of the commission periods for settling excise obligations. Unfortunately, over four years after this proposal was first announced, I was told last month that the current government is releasing its exposure draft soon. The coalition will be examining the situation with regard to microbreweries in the context of its policy development in the lead-up to the next election. In March this year I visited the Two Metre Tall microbrewery in the Derwent Valley to see first-hand the challenges being faced by small craft breweries. A particular concern is that the excise obligations of microbreweries rise with the CPI while the microbrewery excise refund is not keeping up with this increase. There have been 21 CPI increases since the $10,000 cap was set in 2000. One suggestion would be to allow microbreweries to produce up to 150,000 litres annually and to increase the excise refund to a level equivalent to the wine industry. In this connection I note that Senator Milne's motion suggests microbreweries should be allowed to produce up to 300,000 litres annually and remove the maximum excise refund altogether.

It is worth considering that levelling the playing field for microbreweries will add to the turnover and generate more excise.

Stephen Parry (Tasmania, Liberal Party) Share this | Link to this | Hansard source

Order! Your time has expired, Senator Abetz.

Eric Abetz (Tasmania, Liberal Party, Shadow Minister for Employment and Workplace Relations) Share this | Link to this | Hansard source

I seek leave to continue my remarks.

Leave granted.

I am indebted to the Senate. It is worth considering that levelling the playing field for microbreweries will add to their turnover and generate more excise for the government, whereas the existing regime is suppressing their profitability and their excise contribution.

Christine Milne (Tasmania, Australian Greens) Share this | Link to this | Hansard source

by leave—I note what Senator Abetz has just said, but he does not actually explain why the coalition is going to oppose this. Rather, he has made the case for why the coalition should in fact be supporting it, since he is agreeing that the current situation curtails the development of microbreweries.

The consultation that I have had with the microbreweries, in particular the Two Metre Tall brewery, was with regard to what level one should set for a microbrewery. I can inform the Senate that the Two Metre Tall brewery did consult widely with other microbreweries to establish what would be a reasonable level—30,000 litres is way too small to get a critical mass to run a business. We are trying to increase the downstreaming on-farm to rural and regional areas of Australia. In the Tasmanian context we have approximately seven microbreweries. They have added to the jobs in rural and regional Tasmania, they have added to the food culture, they bring tourists to the area and they sustain locals.

This a change that needs to happen because of the gross inequity between microbreweries and small wineries. It is why microbreweries are having to go into some cider production, because they then come under the wine regulations and not under microbreweries. So I urge the coalition to think again. This is a balance-of-power parliament. We do have the opportunity to bring real pressure to bear on this issue and I urge the coalition to support the motion.

Question put:

That the motion (Senator Milne's) be agreed to.

The Senate divided. [15:51]

(The Deputy President—Senator Parry)

Question negatived.