WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
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Bill.
CONTENTS
Wine Export Charge Bill 1997
Date Introduced: 19 March 1997
House: House of Representatives
Portfolio: Primary Industries and Energy
Commencement: Royal Assent
To impose a charge on exports of Australian wine.
Rationale for Bill
The imposition of a charge on exports of Australian wine
proposed by the Bill was announced by the Government on 13 February
1997. In announcing the decision the Minister for Primary Industry
and Energy stated:
The purpose of the charge is to raise funds from the industry to
continue the export promotion program managed by the Australian
Wine and Brandy Corporation.(1)
The export promotion program is currently funded by by
Commonwealth and State grants.
The Government states in the Second Reading Speech to the Bill
that the proposed export charge is being imposed at the request of
the wine industry (the industry) and that the rationale given by
the wine industry for requesting the imposition of the charge
was:
[B]ecause it was concerned that the corporation (the Australian
Wine and Brandy Corporation (AWBC)) would have to wind down its
generic export promotion program for Australian wine as the grant
funding came to an end. The industry strongly supports the
corporation's export promotion program, and regards it as an
essential component of its export growth strategy. It does not
believe that a voluntary scheme would be effective.
The industry voted for a charge on wine exports to fund AWBC
generic marketing programmes at the AWBC General Meeting held in
Adelaide on 7 December 1995.(2)
The author of this Digest has been unable to find any current
adverse industry reaction to the proposed imposition of the
charge.
Industry Performance
Australian production of grapes for all purposes from the 1996
harvest totalled 1 062 167 million tonnes.(3) This production was
achieved from a grapevine bearing area of 63 132 hectares.(4) A
total of 883 318 tonnes of fresh grapes was crushed for the 1996
vintage and the volume of beverage wine produced totalled 620.1
million litres.(5)
The Australian wine industry is currently experiencing rapid
growth in exports. Total export approvals for March 1996 to
February 1997 were 151.2 million litres, 27% up on the previous
year.(6) Total exports for the period were valued at $565.8
million, up 32.9% on the previous year.(7)
The United Kingdom is Australia's principal export market. For
the period March 1996 to February 1997, exports totalled 73.6
million litres, 32% up on the previous years.(8) By value, exports
increased 30% to $254.6 million.(9)
Exports to the United States increased substantially for the
period March 1996 to February 1997. Exports totalled 20.3 million
litres, up 36.7% on the previous year.(10) By value, exports
totalled $104.3 million, up 51% on the previous year and surpassing
$100 million for the first time.(11)
Major Issue Facing the Industry
While the current state of the Australian wine industry can be
said to be nothing short of brilliant, their are however a number
of negative issues which face the industry in the future. For
example, it is reported in The Weekend Australian of 9
November 1996 that wine-making identity Mr Wolf Blass said:
[T]he wine industry's goal of $900 million in export sales by
2001 was "a little to ambitious" and that a more realistic target
was $1 billion by 2005. It would not be possible for the industry
to keep growing at 25 per cent a year, especially with increasing
competition from South Africa and Chile, he said.
This together with increased planting's in recent years, meant
Australia was facing the prospect of a substantial over supply of
white grape varieties by the end of the decade, amounting to 25 000
tonnes or the equivalent of 15 million litres of wine. "Any thought
that we can simply push this excess on to the export market is
wrong," Mr Blass said.
This was because the local surplus would coincide with a
world-wide oversupply of chardonnay, the image of which was set to
deteriorate rapidly.
It is reported in The Australian
of 11 March 1997 that the closure of three CES offices in South
Australia were attacked by the federal Opposition, which argued
that their closure would hurt the State's $250 million wine
industry. The Opposition spokesperson on employment, Mr Martin
Ferguson, is reported as saying that the closure of the Berri,
Gawler and Noarlunga offices would have a sever impact on
recruiting for the region's wine grape industry. Mr Ferguson said
the three offices played a key role in the industry, helping
pickers for the few weeks of the year they were needed. In
response, a spokesperson for the Minister for Employment, Senator
Vanstone, is reported as saying that the transfer of public
services to a private model of service delivery would not affect
recruiting in the industry and that there are no plans to shut the
offices during the phase-in of the new arrangements.
It is reported in The Australian of 18 June 1996 that
the president of the Winemakers' Federation of Australia, Mr Len
Evans, branded the Federal Government's role over the past 30 years
a disaster for the Australian wine industry. Mr Evans called for a
range of government sponsored programs including a revived export
incentive scheme and a vineyard improvement program. The Australian
wine industry is also reported as supporting a goods and services
tax.
Environmental concerns are being raised about the clearing of
land and the felling of trees to expand the area planted to grape
vines. For example, it is reported in The Canberra Timesof
34 October 1996 that a stop-work order had been imposed by the
director of planning for Yass Shire on a project to clear a paddock
of old native trees to expand an area planted to vines.
While Australian wine exports are forecast to rise to a record
213 million litres in 1997-98, Australian wines can expect to face
increased competition in overseas markets particularly when
planting's of premium varieties come into production in the United
States, Chile and Argentina.(12)
Clause 3 provides that the principal object of
the Bill is to ensure adequate funds are raised for the export
promotional activities of the AWBC.
Clause 6 imposes a charge on exports of
Australian produced wine.
Clause 7 deals with the rate of charge. The
rate of charge on exports of Australian produced wine will be an
amount prescribed by regulation. The rate must not exceed 0.5% of
the free on board sales value of the wine.
The charge will be payable by the producer of the wine
(clause 8). It is stated in the Explanatory
Memorandum to the Bill that regulations to be made under the
Primary Industries Levies and Charges Collection Act
1991will provide that for the purposes of the charge the
'producer' is the exporter. The use of the term 'producer' in this
Bill is said to be for purposes of consistency with the Primary
Industries Levies and Charges Collection Act 1991.
Clause 9 provides that the regulations may
exempt from the charge wine exported by a specified class of
persons, or specified classes of wine.
- Press Release, Minister for Primary Industries and Energy, 13
February 1997.
- Australian Wine and Brandy Corporation, Annual Report 1995-96,
p. 22.
- Australian Bureau of Statistics, News Release No. 19/97, 27
February 1997.
- Ibid.
- Ibid.
- Australian Wine Export Council, February 1997 Wine Export
Approval Statistics, 5 March 1997.
- Ibid.
- Ibid.
- Ibid.
- Ibid.
- Ibid.
- Australian Commodities, Vol. 4, No. 1 March 1997.
Ian Ireland
2 June 1997
Bills Digest Service
Information and Research Services
This Digest does not have any official legal status. Other
sources should be consulted to determine whether the Bill has been
enacted and, if so, whether the subsequent Act reflects further
amendments.
IRS staff are available to discuss the paper's contents
with Senators and Members and their staff but not with members of
the public.
ISSN 1328-8091
Commonwealth of Australia 1997
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Published by the Department of the Parliamentary Library,
1997.
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Last updated: 5 June 1997
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