Bills Digest 139 1996-97
Wine Export Charge Bill 1997
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 consulted to determine
the subsequent official status of the 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
Except to the extent of the uses permitted under the Copyright Act
1968, no part of this publication may be reproduced or transmitted
in any form or by any means, including information storage and retrieval
systems, without the prior written consent of the Parliamentary Library,
other than by Members of the Australian Parliament in the course of their
official duties.
Published by the Department of the Parliamentary Library, 1997.
This page was prepared by the Parliamentary Library, Commonwealth of
Australia
Last updated: 5 June 1997
|
