Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

My question is to the Leader of the Government in the Senate, Senator Abetz, representing the Minister for Agriculture. Recently I met with a group of some 40 wine grape growers from the Riverland in South Australia, many of whom were concerned about their ongoing viability given the 25 to 35 per cent drop in wine grape prices compared with last year's prices—prices that are generally well below the cost of production. Does the government acknowledge that a number of wine grape growers in the Riverland, as well as in the Sunraysia and Riverina regions, cannot survive in the longer term with these unsustainable prices? Further, does the government concede that their viability is made even more difficult by New Zealand wineries receiving some $25 million a year in wine equalisation tax rebates from Australian taxpayers—moneys that could instead be used in part to promote Australian wines overseas?

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

I thank Senator Xenophon for his question and note that I think he is one of the few people in this place who can honestly say he does not have a conflict of interest in raising the issue of the cost of wine grapes!

Kim Carr (Victoria, Australian Labor Party, Shadow Minister Assisting the Leader for Science) Share this | Link to this | Hansard source

Because he doesn't drink wine!

Honourable senators interjecting—

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

I understand that was a bit too subtle for some of those opposite. The government is aware that inland grape growers are concerned about the continuing decline in white wine-grape prices. Over recent years the wine industry has faced difficult times with a decline in sales not matched by a commensurate adjustment in supply. This has of course led to a decline in the price of wine grapes. In recent days Minister Joyce has met with growers in the Riverland and Murray Valley regions. The government is developing an agricultural competitiveness white paper, which is in a consultation phase. This is an ideal mechanism for wine grape growers to identify concerns, including about the structure of the industry.

Turning to the issue of the wine equalisation tax rebate: the government is aware of these criticisms within the wine industry about New Zealand wine makers being eligible to claim the rebate. I understand that that is a result of the Closer Economic Relations deal between our two countries, and I understand that Treasury is aware of this issue. Questions directly related to the wine equalisation tax and its application should be directed to the Treasurer, and I am happy to do that should Senator Xenophon wish me to.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. And yes: I do wish the Leader of the Government in the Senate to refer that issue to the Treasurer, as a matter of urgency. Given that most of these wine grape growers are still burdened by debt due to drought conditions of a number of years ago, borrowing heavily to buy water to keep their vines alive, can the government advise on whether they will be eligible, and in what circumstances, for the emergency assistance package for farmers announced last week by the Prime Minister and the Minister for Agriculture?

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

I can inform the senator that grape growers who have had their incomes impacted by drought conditions may be eligible for a concessional loan under the new Drought Concessional Loans Scheme. Separately, the government, through the Farm Finance Concessional Loans Scheme, is assisting farm businesses that are experiencing difficulties in servicing their current levels of debt by providing access to concessional loans. Under the scheme, grape growers in New South Wales, Victoria and South Australia have accessed concessional loans of up to $650,000 for debt restructuring purposes. These loans restructure existing debt and can help growers recover from periods of downturn in their income. The interim farm household allowance is also now available. Wine grape growers in financial hardship can apply for income support to ensure that they can put food on the table and pay the bills.

Nick Xenophon (SA, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Does the government consider that wine grape growers can benefit from a strengthened code of practice in their dealings with wineries and that wineries in turn can benefit from a strengthened code in their dealings with supermarkets, given the dominance of Coles and Woolworths in wine retailing?

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

The government recognises the good work of the wine industry in developing the Australian Wine Industry Code of Conduct. As with all codes, weaknesses are often revealed over time. The government supports the industry in its review of the existing code and proposals to strengthen its effectiveness. The government understands that the wine industry is seeking to negotiate a voluntary code of practice with Coles and Woolworths and considers this to be an appropriate course of action.