Wine Equalisation Tax (WET) and rebate were designed to support small Australian regional vineyards, ABC Rural reports.The WET is a 29 per cent tax on wholesale wine, but wineries can claim back a rebate of up to $500,000.
But the Winemakers Federation estimates at least $25 million worth of WET rebates are being claimed by New Zealand wineries, due to free trade provisions across the Tasman.
The Wolf Blass Foundation is funding a study on the legality of axing the rebate for New Zealand wineries.
Blass said that money would be better spent on marketing the huge stockpile of Australian wine.
“It has to be successful; we are in big, big trouble. We need money to promote Australia geographically. We haven't got the money to do so because of the surplus.”
Blass says small winemakers dependent on the WET rebate for survival have nothing to fear.
“We are tackling New Zealand. We are only interested in this point of time, that the money doesn't go to New Zealand.”
Winemakers Federation of Australian chief executive Paul Evans said trade agreements with New Zealand make this change difficult to achieve.
“There's widespread support in the industry for the rebate to be removed from NZ producers, but every time we raise this with decision makers in Canberra we run up against the argument of whether removing that entitlement will have broader ramifications on our trading agreements, not just with New Zealand but with other countries as well,” Evans said.
“Quite a detailed piece of work is now requited to identify to government a pathway on how this rebate can be removed without those broader implications.”
