A lack of industry consultation over the abolishment of the cellar door tax subsidy has left a powerhouse winemaker seeing red at the state government.
The removal of the subsidy in this year's state budget, effective from July 1, means wine producers can no longer claim funding from the state government once they exhaust the federal government’s Wine Equalisation Tax (WET) rebate.
Wineries are charged WET based on the quality and quantity of their wine.
Wine producers are able to claim back WET through the state government, predominantly from products sold through the cellar door.
By cutting the tax the state government says it will save $11 million each year but it has left Leeuwin Estate disenchanted and disappointed with the policies promoted by the state government.
Joint chief executive of Leeuwin Estate Winery Simone Furlong said the wine industry was taxed heavily in Australia and the cellar door rebate has been important for West Australian wineries that rely on in-house sales and wine tourism for income.
Ms Furlong said wineries in the region spent considerable amounts on their cellar door facilities, restaurants and experiences to encourage visitors to the area, stimulating regional tourism and employment opportunities.
“To remove the cellar door rebate, without industry consultation, is a departure of policy which we believe needs urgent review,” Ms Furlong said.
Gaming and Liquor Minister Colin Holt said the cellar door subsidy was removed at it only benefited a small number of larger wineries who exceeded WET rebate which is equal to wine sales of over $1.7 million.
Mr Holt said only 20 out of approximately 540 wine producers qualified for the state government subsidy.
“Given the subsidy applies to a small percentage of cellar door sales for larger wineries, the overall impact on wine drinkers is expected to be minimal,” he said.
